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BrokerCheck Report

AXA ADVISORS, LLC

Section Title

Report Summary

Firm History

CRD# 6627

1

12

Firm Profile 2 - 11

Page(s)

Firm Operations 13 - 24

Disclosure Events 25

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AXA ADVISORS, LLC

CRD# 6627

SEC# 8-17883

Main Office Location

1290 AVENUE OF THE AMERICASNEW YORK, NY 10104Regulated by FINRA Woodbridge Office

Mailing Address

1290 AVENUE OF THE AMERICAS16TH FLOORNEW YORK, NY 10104

This firm is a brokerage firm and an investmentadviser firm. For more information aboutinvestment adviser firms, visit the SEC'sInvestment Adviser Public Disclosure website at:

Business Telephone Number

212-314-4600

https://www.adviserinfo.sec.gov

Report Summary for this Firm

This report summary provides an overview of the brokerage firm. Additional information for this firm can be foundin the detailed report.

Disclosure Events

Brokerage firms are required to disclose certaincriminal matters, regulatory actions, civil judicialproceedings and financial matters in which the firm orone of its control affiliates has been involved.

Are there events disclosed about this firm? Yes

The following types of disclosures have beenreported:

Type Count

Regulatory Event 25

Arbitration 11

Firm Profile

This firm is classified as a limited liability company.

This firm was formed in Delaware on 07/19/1999.

Its fiscal year ends in December.

Firm History

Information relating to the brokerage firm's historysuch as other business names and successions(e.g., mergers, acquisitions) can be found in thedetailed report.

Firm Operations

Is this brokerage firm currently suspended with anyregulator? No

This firm conducts 6 types of businesses.

This firm is affiliated with financial or investmentinstitutions.

This firm has referral or financial arrangements withother brokers or dealers.

This firm is registered with:

• the SEC• 1 Self-Regulatory Organization• 53 U.S. states and territories

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1©2020 FINRA. All rights reserved. Report about AXA ADVISORS, LLC

https://adviserinfo.sec.gov/firm/summary/6627


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This firm is classified as a limited liability company.

This firm was formed in Delaware on 07/19/1999.

CRD#

This section provides the brokerage firm's full legal name, "Doing Business As" name, business and mailingaddresses, telephone number, and any alternate name by which the firm conducts business and where such name isused.

Firm Profile

Firm Names and Locations

Its fiscal year ends in December.

AXA ADVISORS, LLC

SEC#

6627

8-17883

Main Office Location

Mailing Address

Business Telephone Number

Doing business as AXA ADVISORS, LLC

212-314-4600

Regulated by FINRA Woodbridge Office

1290 AVENUE OF THE AMERICASNEW YORK, NY 10104


Other Names of this Firm

Name Where is it used

PARAMOUNT PLANNING GROUP, A DIVISION OF AXA ADVISORS,LLC

AK, AR, AZ, CA, CO,CT, DC, DE, FL, GA,HI, IA, ID, IL, IN, KS,KY, LA, MA, MD, ME,MI, MN, MO, MS, MT,NC, ND, NE, NH, NJ,NM, NV, NY, OH, OK,OR, PA, PR, RI, SC,SD, TN, TX, UT, VA,VT, WA, WI, WV, WY






This section provides information relating to all direct owners and executive officers of the brokerage firm.

Direct Owners and Executive Officers

Firm Profile

Position

Percentage of Ownership

Is this a public reportingcompany?

Position Start Date

Does this owner direct themanagement or policies ofthe firm?

AXA DISTRIBUTION HOLDING CORPORATION

MEMBER

75% or more

No

Domestic Entity

09/1999

Yes

Is this a domestic or foreignentity or an individual?

Legal Name & CRD# (if any):

Position



Position Start Date


BONADONNA, MARYJEAN ELIZABETH

CHIEF RISK OFFICER

Less than 5%

No

Individual

11/2018

Yes

3199562



Position


Position Start Date

BOYLAN, PATRICIA AGNES

BROKER DEALER CHIEF COMPLIANCE OFFICER

Less than 5%

Individual

02/2019

3231492








Direct Owners and Executive Officers (continued)

Firm Profile




Less than 5%

No

Yes

Position



Position Start Date


BROWNING, RALPH EDWARD II

CHIEF PRIVACY OFFICER

Less than 5%

No

Individual

05/2018

Yes

6914526



Position



Position Start Date


CANNON, CHRISTIAN JAMES

VICE PRESIDENT AND GENERAL COUNSEL

Less than 5%

No

Individual

02/2019

Yes



COE, ADAM JAMES

IndividualIs this a domestic or foreignentity or an individual?








Firm Profile

Position



Position Start Date


DIRECTOR

Less than 5%

No

Individual

02/2020

Yes


Position



Position Start Date


HERRMANN, RONALD PAUL

DIRECTOR

Less than 5%

No

Individual

10/2015

Yes

1762134



Position



Position Start Date


JONES, GINA MARIE

VICE PRESIDENT AND FINANCIAL CRIME OFFICER

Less than 5%

No

Individual

02/2014

Yes









Firm Profile


No

Position



Position Start Date


KARR, DAVID WHITCOMB

CHAIRMAN OF THE BOARD AND CHIEF EXECUTIVE OFFICER

Less than 5%

No

Individual

09/2014

Yes

1852445



Position



Position Start Date


LANE, NICHOLAS BURRITT

DIRECTOR

Less than 5%

No

Individual

05/2019

Yes

4994948



Position

LANK, STEPHEN

CHIEF OPERATIONS OFFICER

Individual

2997028









Firm Profile



Position Start Date


Less than 5%

No

10/2018

Yes

Position



Position Start Date


LARUSSA, CHRISTOPHER JOHN

INVESTMENT ADVISOR CHIEF COMPLIANCE OFFICER

Less than 5%

No

Individual

02/2019

Yes

4728315



Position



Position Start Date


MASSA, FRANK ANGELO JR

PRESIDENT/DIRECTOR

Less than 5%

No

Individual

10/2018

Yes

2241858









Firm Profile

Position



Position Start Date


MCGRATH, MELISSA MICHELLE

PRINCIPAL OPERATIONS OFFICER

Less than 5%

No

Individual

05/2020

Yes

4049414



Position



Position Start Date


MELLIN, JAMES PATRICK

CHIEF SALES OFFICER

Less than 5%

No

Individual

09/2014

Yes

1859557



Position


Position Start Date

PENNELL, PAGE HOWARD

VICE PRESIDENT

Less than 5%

Individual

05/2012

2031037









Firm Profile




Less than 5%

No

Yes

Position



Position Start Date


SARFATTI, AARON JOSEPH

DIRECTOR

Less than 5%

No

Individual

07/2018

Yes

6991391



Position



Position Start Date


SCAPPATOR, CANDACE LYNN

CONTROLLER/FINOP/PRINCIPAL FINANCIAL OFFICER

Less than 5%

No

Individual

05/2020

Yes

4697607



SMITH, JANE LYNN

2158938








Firm Profile

Position



Position Start Date


ASSISTANT VICE PRESIDENT

Less than 5%

No

Individual

07/1999

Yes







This section provides information relating to any indirect owners of the brokerage firm.

Indirect Owners

Firm Profile

AXA EQUITABLE FINANCIAL SERVICES, LLC

SHAREHOLDER

AXA DISTRIBUTION HOLDING CORPORATION

75% or more

Yes

Domestic Entity

06/2002

Yes



Company through whichindirect ownership isestablished

Relationship to Direct Owner

Relationship Established




EQUITABLE HOLDINGS, INC.

MEMBER

AXA EQUITABLE FINANCIAL SERVICES, LLC

75% or more

Yes

Domestic Entity

10/2018

Yes



Company through whichindirect ownership isestablished

Relationship to Direct Owner

Relationship Established









Firm History

This section provides information relating to any successions (e.g., mergers, acquisitions) involving the firm.

No information reported.






Firm Operations

RegistrationsThis section provides information about the regulators (Securities and Exchange Commission (SEC), self-regulatoryorganizations (SROs), and U.S. states and territories) with which the brokerage firm is currently registered andlicensed, the date the license became effective, and certain information about the firm's SEC registration.

This firm is currently registered with the SEC, 1 SRO and 53 U.S. states and territories.

SEC Registration Questions

This firm is registered with the SEC as:

A broker-dealer:

A broker-dealer and government securities broker or dealer:

A government securities broker or dealer only:

This firm has ceased activity as a government securities broker or dealer:

Yes

Yes

No

No

Federal Regulator Status Date Effective

SEC Approved 12/30/1973

Self-Regulatory Organization Status Date Effective

FINRA Approved 01/23/1974






Firm Operations

Registrations (continued)

U.S. States &Territories

Status Date Effective

Alabama Approved 10/22/1981

Alaska Approved 10/30/1980

Arizona Approved 11/14/1980

Arkansas Approved 01/01/1987

California Approved 10/15/1999

Colorado Approved 02/01/1983

Connecticut Approved 10/30/1980

Delaware Approved 10/06/1981

District of Columbia Approved 04/21/1983

Florida Approved 04/27/1983

Georgia Approved 09/21/1981

Hawaii Approved 09/20/1999

Idaho Approved 10/20/1980

Illinois Approved 10/27/1980

Indiana Approved 10/20/1981

Iowa Approved 07/14/1983

Kansas Approved 08/24/1981

Kentucky Approved 07/16/1982

Louisiana Approved 04/20/1983

Maine Approved 02/08/1984

Maryland Approved 10/03/1981

Massachusetts Approved 07/31/1981

Michigan Approved 02/02/1983

Minnesota Approved 07/15/1982

Mississippi Approved 10/14/1981

Missouri Approved 07/15/1983

Montana Approved 04/20/1983

Nebraska Approved 10/08/1981

Nevada Approved 07/14/1983

New Hampshire Approved 02/02/1983

New Jersey Approved 07/12/1983

New Mexico Approved 10/07/1981

New York Approved 03/30/1984

U.S. States &Territories

Status Date Effective

North Carolina Approved 07/15/1982

North Dakota Approved 10/21/1981

Ohio Approved 07/16/1982

Oklahoma Approved 07/17/1982

Oregon Approved 10/24/1981

Pennsylvania Approved 10/03/1980

Puerto Rico Approved 12/28/1987

Rhode Island Approved 02/01/1983

South Carolina Approved 10/28/1981

South Dakota Approved 07/15/1982

Tennessee Approved 08/17/1981

Texas Approved 07/22/1983

Utah Approved 04/21/1983

Vermont Approved 02/13/1984

Virgin Islands Approved 02/17/2011

Virginia Approved 09/22/1981

Washington Approved 04/20/1983

West Virginia Approved 09/30/1981

Wisconsin Approved 11/25/1981

Wyoming Approved 09/23/1980






Firm Operations

Types of BusinessThis section provides the types of business, including non-securities business, the brokerage firm is engaged in orexpects to be engaged in.

Other Types of Business

This firm does not effect transactions in commodities, commodity futures, or commodity options.This firm does not engage in other non-securities business.

Non-Securities Business Description:

This firm currently conducts 6 types of businesses.

Types of Business

Mutual fund retailer

Municipal securities broker

Broker or dealer selling variable life insurance or annuities

Investment advisory services

Broker or dealer involved in a networking, kiosk or similar arrangment with a: insurance company or agency

Other - REGISTRANT ACTS AS DISTRIBUTOR OF VARIABLE LIFE AND ANNUITY CONTRACTS ISSUED BY AXAEQUITABLE LIFE INS. CO. AND SERVES AS PRINCIPAL UNDERWRITER OF THE SEPARATE ACCOUNTSUNDERLYING THESE VARIABLE CONTRACTS. REGISTRANT ALSO OFFERS TRADITIONAL BROKERAGESERVICES. ALL BROKERAGE ACCOUNTS ARE MAINTAINED ON A FULLY DISCLOSED BASIS BY LPLFINANCIAL. AXA DISTRIBUTORS, LLC (ADL) SERVES AS CO-DISTRIBUTOR OF EQ ADVISORS TRUST AND AXAPREMIER VIP TRUST.






Firm Operations

Clearing Arrangements

This firm does not hold or maintain funds or securities or provide clearing services for other broker-dealer(s).

Introducing Arrangements

This firm does refer or introduce customers to other brokers and dealers.

Name: LPL FINANCIAL LLC

Business Address: 75 STATE STREET22ND FLOORBOSTON, MA 02109

CRD #: 6413

Effective Date: 03/31/2014

Description: AXA ADVISORS, LLC ACTS AS INTRODUCING BD FOR LPL FINANCIALLLC (LPL), WHICH ACTS AS ITS AGENT CARRYING CUSTOMERACCOUNTS ON A FULLY DISCLOSED BASIS. AS AGENT, LPL ACCEPTSAND EXECUTES TRANSACTIONS, RELEASES OR DEPOSITS MONEYAND SECURITIES, PREPARES AND MAILS CONFIRMATIONS ANDPERIODIC STATEMENTS, PERFORMS CASHIERING FUNCTIONS, MAKESAND RECEIVES PAYMENTS, PROVIDES CUSTODY AND SAFEKEEPINGOF SECURITIES AND CASH, AND HANDLES MARGIN ACCOUNTS,DIVIDENDS, EXCHANGES, RIGHTS AND TENDER OFFERS.






Firm Operations

Industry Arrangements

This firm does have books or records maintained by a third party.

This firm does have accounts, funds, or securities maintained by a third party.

This firm does have customer accounts, funds, or securities maintained by a third party.



CRD #: 6413


Description: REGISTRANT HAS OUTSOURCED TO LPL FINANCIAL LLC (LPL) CERTAINBROKERAGE BACK AND MIDDLE OFFICE FUNCTIONS.

Name: AXA EQUITABLE LIFE INSURANCE COMPANY

Business Address: 1290 AVENUE OF THE AMERICASNEW YORK, NY 10104


Description: AXA EQUITABLE LIFE INSURANCE COMPANY CREATES AND MAINTAINSVARIOUS ACCOUNTS, BOOKS AND OTHER DOCUMENTS ON BEHALF OFTHE REGISTRANT. IN ACCORDANCE WITH APPLICABLEREQUIREMENTS, REGULATORILY REQUIRED DOCUMENTS ARE THEPROPERTY OF THE REGISTRANT. HOWEVER, BOOKS OR RECORDSMAINTAINED BY AXA EQUITABLE LIFE RELATING TO SALESCOMPENSATION ARE JOINT PROPERTY. BOOKS AND RECORDS AREMAINTAINED BY AXA EQUITABLE LIFE IN ACCORDANCE WITHAPPLICABLE RULES AND REGULATIONS AND ARE SUBJECT TO SECINSPECTION.



CRD #: 6413


Description: LPL FINANCIAL, LLC (LPL) ACTS ALSO AS CUSTODIAN FOR SOME OFTHE FIRM'S SECURITIES POSITIONS HELD AT ANY GIVEN TIME.






Firm Operations

Industry Arrangements (continued)

This firm does not have individuals who control its management or policies through agreement.

This firm does not have individuals who wholly or partly finance the firm's business.

Control Persons/Financing



CRD #: 6413


Description: LPL FINANCIAL LLC (LPL) ACTS AS REGISTRANT'S AGENT CARRYINGREGISTRANT'S CUSTOMER ACCOUNTS ON A FULLY DISCLOSED BASIS.AS AGENT, LPL ACCEPTS AND EXECUTES TRANSACTIONS, RELEASESOR DEPOSITS MONEY AND SECURITIES, PREPARES AND MAILSCONFIRMATIONS AND PERIODIC STATEMENTS, PERFORMSCASHIERING FUNCTIONS, MAKES AND RECEIVES PAYMENTS,PROVIDES CUSTODY AND SAFEKEEPING OF SECURITIES AND CASH,AND HANDLES MARGIN ACCOUNTS, DIVIDENDS, EXCHANGES, RIGHTSAND TENDER OFFERS WITH RESPECT TO SUCH SECURITIES.

Name: AXA EQUITABLE LIFE INSURANCE COMPANY

Business Address: 1290 AVENUE OF THE AMERICASNEW YORK, NY 10104


Description: AXA EQUITABLE LIFE INSURANCE COMPANY CREATES AND MAINTAINSVARIOUS ACCOUNTS, BOOKS AND OTHER DOCUMENTS ON BEHALF OFTHE REGISTRANT FOR ITS CUSTOMERS. IN ACCORDANCE WITHAPPLICABLE REQUIREMENTS, REGULATORILY REQUIRED DOCUMENTSARE THE PROPERTY OF THE REGISTRANT. BOOKS AND RECORDS AREMAINTAINED BY AXA EQUITABLE LIFE IN ACCORDANCE WITHAPPLICABLE RULES AND REGULATIONS AND ARE SUBJECT TO SECINSPECTION.






Firm Operations

Organization AffiliatesThis section provides information on control relationships the firm has with other firms in the securities, investmentadvisory, or banking business.

This firm is, directly or indirectly:

· in control of· controlled by· or under common control withthe following partnerships, corporations, or other organizations engaged in the securities or investmentadvisory business.

Yes

No

No

10/29/2014


173027

AB PRIVATE CREDIT INVESTORS LLC is under common control with the firm.

THIS COMPANY IS AN INDIRECT, WHOLLY-OWNED SUBSIDIARY OFALLIANCEBERNSTEIN L.P.

Description:

Investment AdvisoryActivities:

Securities Activities:

Country:

Foreign Entity:

Effective Date:

Business Address:

CRD #:

Yes

No

No

05/11/2001

1345 AVENUE OF THE AMERICASNEW YORK, NJ 10105

110879

AB CUSTOM ALTERNATIVE SOLUTIONS LLC is under common control with the firm.


Description:



Country:

Foreign Entity:

Effective Date:

Business Address:

CRD #:






Firm Operations

Organization Affiliates (continued)

Yes

No

No

03/31/2014


122046

W.P. STEWART ASSET MANAGEMENT LTD. is under common control with the firm.

THIS COMPANY IS AN INDIRECT, WHOLLY OWNED SUBSIDIARY OFALLIANCEBERNSTEIN L.P.

Description:



Country:

Foreign Entity:

Effective Date:

Business Address:

CRD #:

Yes

Yes

No

02/15/2013

6187 CARPINTERIA AVENUECARPINTERIA, CA 93013

11869

PLANMEMBER SECURITIES CORPORATION is under common control with the firm.

THIS COMPANY IS APPROXIMATELY 50% OWNED BY AXA DISTRIBUTIONHOLDING CORPORATION, A DIRECT PARENT OF AXA ADVISORS, LLC.

Description:



Country:

Foreign Entity:

Effective Date:

Business Address:

CRD #:

No

05/01/2011


156933

AXA EQUITABLE FUNDS MANAGEMENT GROUP, LLC is under common control with the firm.

Foreign Entity:

Effective Date:

Business Address:

CRD #:






Firm Operations


Yes

No

No

THIS COMPANY IS A DIRECT, WHOLLY-OWNED SUBSIDIARY OF AXAEQUITABLE LIFE INSURANCE COMPANY, WHICH IS AN INDIRECT, WHOLLY-OWNED SUBSIDIARY OF EQUITABLE HOLDINGS,INC. AXA EQUITABLEFUNDS MANAGEMENT GROUP, LLC SERVES AS INVESTMENT MANAGERAND ADMINISTRATOR TO EQ ADVISORS TRUST ,AXA PREMIER VIP TRUST,AND 1290 FUNDS, THREE REGISTERED INVESTMENT COMPANIES.

Description:



Country:

Foreign Entity:

No

Yes

No

12/13/2019


EQUITABLE FINANCIAL LIFE INSURANCE COMPANY OF AMERICA is under common control with the firm.

EQUITABLE FINANCIAL LIFE INSURANCE COMPANY OF AMERICA IS ANINDIRECT, WHOLLY-OWNED SUBSIDIARY OF EQUITABLE HOLDINGS, INC.

Description:



Country:

Foreign Entity:

Effective Date:

Business Address:

Yes

No

No

02/24/2006


106998

ALLIANCEBERNSTEIN HOLDING L.P. is under common control with the firm.

ALLIANCEBERNSTEIN HOLDING L.P. IS A LIMITED PARTNER OFALLIANCEBERNSTEIN L.P.

Description:



Country:

Foreign Entity:

Effective Date:

Business Address:

CRD #:






Firm Operations


ALLIANCEBERNSTEIN HOLDING L.P. IS A LIMITED PARTNER OFALLIANCEBERNSTEIN L.P.

Description:

Yes

Yes

No

10/02/2000


104474

SANFORD C. BERNSTEIN & CO., LLC is under common control with the firm.

SANFORD C. BERNSTEIN & CO., LLC IS AN INDIRECT WHOLLY-OWNEDSUBSIDIARY OF ALLIANCEBERNSTEIN L.P.

Description:



Country:

Foreign Entity:

Effective Date:

Business Address:

CRD #:

Yes

No

No

02/24/2006


107445

ALLIANCEBERNSTEIN CORPORATION is under common control with the firm.

THIS COMPANY IS AN INDIRECT, WHOLLY-OWNED SUBSIDIARY OFEQUITABLE HOLDINGS, INC.

Description:



Country:

Foreign Entity:

Effective Date:

Business Address:

CRD #:

10/14/1988


25900

AXA DISTRIBUTORS, LLC is under common control with the firm.

Effective Date:

Business Address:

CRD #:






Firm Operations


No

Yes

No

10/14/1988

THIS COMPANY IS AN INDIRECT WHOLLY-OWNED SUBSIDIARY OFEQUITABLE HOLDINGS, INC.

Description:



Country:

Foreign Entity:

Effective Date:

No

Yes

No

02/24/2006


14549

ALLIANCEBERNSTEIN INVESTMENTS, INC. is under common control with the firm.


Description:



Country:

Foreign Entity:

Effective Date:

Business Address:

CRD #:

Yes

No

No

02/24/2006


108477

ALLIANCEBERNSTEIN L.P. is under common control with the firm.

EQUITABLE HOLDINGS, INC., WHICH DIRECTLY OR INDIRECTLY OWNS ANINTEREST IN AXA ADVISORS, LLC, ALSO DIRECTLY OR INDIRECTLY OWNSAN INTEREST IN ALLIANCEBERNSTEIN L.P.

Description:



Country:

Foreign Entity:

Effective Date:

Business Address:

CRD #:






Firm Operations


EQUITABLE HOLDINGS, INC., WHICH DIRECTLY OR INDIRECTLY OWNS ANINTEREST IN AXA ADVISORS, LLC, ALSO DIRECTLY OR INDIRECTLY OWNSAN INTEREST IN ALLIANCEBERNSTEIN L.P.

Description:

This firm is not directly or indirectly, controlled by the following:

· bank holding company· national bank· state member bank of the Federal Reserve System· state non-member bank· savings bank or association· credit union· or foreign bank






Disclosure Events

All firms registered to sell securities or provide investment advice are required to disclose regulatory actions, criminal orcivil judicial proceedings, and certain financial matters in which the firm or one of its control affiliates has been involved.For your convenience, below is a matrix of the number and status of disclosure events involving this brokerage firm orone of its control affiliates. Further information regarding these events can be found in the subsequent pages of thisreport.

Final On AppealPending

Regulatory Event 0 25 0

Arbitration N/A 11 N/A






Disclosure Event Details

What you should know about reported disclosure events:

1. BrokerCheck provides details for any disclosure event that was reported in CRD. It also includessummary information regarding FINRA arbitration awards in cases where the brokerage firm wasnamed as a respondent.

2. Certain thresholds must be met before an event is reported to CRD, for example: o A law enforcement agency must file formal charges before a brokerage firm is required to disclose a

particular criminal event.3. Disclosure events in BrokerCheck reports come from different sources:

o Disclosure events for this brokerage firm were reported by the firm and/or regulators. When the firmand a regulator report information for the same event, both versions of the event will appear in theBrokerCheck report. The different versions will be separated by a solid line with the reporting sourcelabeled.

4. There are different statuses and dispositions for disclosure events: o A disclosure event may have a status of pending, on appeal, or final.

§ A "pending" event involves allegations that have not been proven or formally adjudicated.§ An event that is "on appeal" involves allegations that have been adjudicated but are currently

being appealed.§ A "final" event has been concluded and its resolution is not subject to change.

o A final event generally has a disposition of adjudicated, settled or otherwise resolved.§ An "adjudicated" matter includes a disposition by (1) a court of law in a criminal or civil matter,

or (2) an administrative panel in an action brought by a regulator that is contested by the partycharged with some alleged wrongdoing.

§ A "settled" matter generally involves an agreement by the parties to resolve the matter.Please note that firms may choose to settle customer disputes or regulatory matters forbusiness or other reasons.

§ A "resolved" matter usually involves no payment to the customer and no finding ofwrongdoing on the part of the individual broker. Such matters generally involve customerdisputes.

5. You may wish to contact the brokerage firm to obtain further information regarding any of thedisclosure events contained in this BrokerCheck report.

Regulatory - Final

This type of disclosure event involves (1) a final, formal proceeding initiated by a regulatory authority (e.g., a statesecurities agency, self-regulatory organization, federal regulator such as the U.S. Securities and Exchange Commission,foreign financial regulatory body) for a violation of investment-related rules or regulations; or (2) a revocation orsuspension of the authority of a brokerage firm or its control affiliate to act as an attorney, accountant or federalcontractor.

Disclosure 1 of 25

Reporting Source: Regulator

Allegations: WITHOUT ADMITTING OR DENYING THE FINDINGS, THE FIRM CONSENTEDTO THE SANCTIONS AND TO THE ENTRY OF FINDINGS THAT ITDISTRIBUTED DOCUMENTS THAT NEGLIGENTLY MISREPRESENTED THECREDIT QUALITY OF CERTAIN BOND FUNDS OFFERED WITHIN GROUPANNUITY CONTRACTS FOR 401(K) RETIREMENT PLANS. THE FINDINGSSTATED THAT CERTAIN ENROLLMENT FORMS, INVESTMENT OPTIONSATTACHMENTS, AND OTHER DOCUMENTS, CREATED BY THE FIRM'SAFFILIATED LIFE INSURANCE COMPANY, WHICH IT DISTRIBUTED TORETIREMENT PLAN SPONSORS, CONTAINED MISLEADING INFORMATIONBY NEGLIGENTLY MISREPRESENTING THAT CERTAIN BOND FUNDS WEREINVESTMENT-GRADE WHEN, IN FACT, THEY WERE NOT. THE FINDINGSALSO STATED THAT THE FIRM FAILED TO ESTABLISH, MAINTAIN, ANDENFORCE A SUPERVISORY SYSTEM AND WSPS REASONABLY DESIGNEDTO ACHIEVE COMPLIANCE WITH FINRA RULES IN THAT THE FIRM DID NOTHAVE SUPERVISORY SYSTEMS OR WSPS REASONABLY DESIGNED TODETERMINE WHETHER THE DOCUMENTS CREATED BY ITS AFFILIATEDLIFE INSURANCE COMPANY THAT WERE DISTRIBUTED TO PLANSPONSORS AND PARTICIPANTS CONTAINED ACCURATE DESCRIPTIONS OFTHE CREDIT QUALITY OF THE BOND FUNDS IT SOLD. IN ADDITION, THEFIRM DID NOT CONDUCT ANY PERIODIC REVIEWS OR SPOT CHECKS OFTHE FUND CLASSIFICATIONS TO ENSURE THAT THE CREDIT QUALITY OFTHE BOND FUNDS WAS DESCRIBED ACCURATELY.

Current Status: Final






Initiated By: FINRA

Principal Sanction(s)/ReliefSought:

Other

Other Sanction(s)/ReliefSought:

N/A

Date Initiated: 05/02/2019

Docket/Case Number: 2015047560501

Principal Product Type: Other

Other Product Type(s): BOND FUNDS

Allegations: WITHOUT ADMITTING OR DENYING THE FINDINGS, THE FIRM CONSENTEDTO THE SANCTIONS AND TO THE ENTRY OF FINDINGS THAT ITDISTRIBUTED DOCUMENTS THAT NEGLIGENTLY MISREPRESENTED THECREDIT QUALITY OF CERTAIN BOND FUNDS OFFERED WITHIN GROUPANNUITY CONTRACTS FOR 401(K) RETIREMENT PLANS. THE FINDINGSSTATED THAT CERTAIN ENROLLMENT FORMS, INVESTMENT OPTIONSATTACHMENTS, AND OTHER DOCUMENTS, CREATED BY THE FIRM'SAFFILIATED LIFE INSURANCE COMPANY, WHICH IT DISTRIBUTED TORETIREMENT PLAN SPONSORS, CONTAINED MISLEADING INFORMATIONBY NEGLIGENTLY MISREPRESENTING THAT CERTAIN BOND FUNDS WEREINVESTMENT-GRADE WHEN, IN FACT, THEY WERE NOT. THE FINDINGSALSO STATED THAT THE FIRM FAILED TO ESTABLISH, MAINTAIN, ANDENFORCE A SUPERVISORY SYSTEM AND WSPS REASONABLY DESIGNEDTO ACHIEVE COMPLIANCE WITH FINRA RULES IN THAT THE FIRM DID NOTHAVE SUPERVISORY SYSTEMS OR WSPS REASONABLY DESIGNED TODETERMINE WHETHER THE DOCUMENTS CREATED BY ITS AFFILIATEDLIFE INSURANCE COMPANY THAT WERE DISTRIBUTED TO PLANSPONSORS AND PARTICIPANTS CONTAINED ACCURATE DESCRIPTIONS OFTHE CREDIT QUALITY OF THE BOND FUNDS IT SOLD. IN ADDITION, THEFIRM DID NOT CONDUCT ANY PERIODIC REVIEWS OR SPOT CHECKS OFTHE FUND CLASSIFICATIONS TO ENSURE THAT THE CREDIT QUALITY OFTHE BOND FUNDS WAS DESCRIBED ACCURATELY.

Resolution Date: 05/02/2019

Resolution:

Does the order constitute afinal order based onviolations of any laws orregulations that prohibitfraudulent, manipulative, ordeceptive conduct?

No

Sanctions Ordered: CensureMonetary/Fine $600,000.00Disgorgement/Restitution

Acceptance, Waiver & Consent(AWC)





https://www.finra.org/rules-guidance/oversight-enforcement/finra-disciplinary-actions?search=2015047560501


Other Sanctions Ordered: UNDERTAKING

Sanction Details: THE FIRM WAS CENSURED, FINED $600,000.00, CONSENTED TO PAYRESTITUTION TO PLAN PARTICIPANTS IN THE TOTAL AMOUNT OF$172,461.33, AND AGREED TO AN UNDERTAKING TO SEND CORRECTIVEDISCLOSURES TO ALL AFFECTED PLAN PARTICIPANTS. FINES PAID IN FULLON MAY 23, 2019.


iReporting Source: Firm

Initiated By: FINANCIAL INDUSTRY REGULATORY AUTHORITY


Civil and Administrative Penalt(ies) /Fine(s)




Other Product Type(s): BOND FUNDS

Allegations: WITHOUT ADMITTING OR DENYING THE FINDINGS, THE FIRM CONSENTEDTO THE SANCTIONS AND TO THE ENTRY OF FINDINGS THAT ITDISTRIBUTED DOCUMENTS THAT NEGLIGENTLY MISREPRESENTED THECREDIT QUALITY OF CERTAIN BOND FUNDS OFFERED WITHIN GROUPANNUITY CONTRACTS FOR 401(K) RETIREMENT PLANS. THE FINDINGSSTATED THAT CERTAIN ENROLLMENT FORMS, INVESTMENT OPTIONSATTACHMENTS, AND OTHER DOCUMENTS, CREATED BY THE FIRM'SAFFILIATED LIFE INSURANCE COMPANY, WHICH IT DISTRIBUTED TORETIREMENT PLAN SPONSORS, INACCURATELY REPRESENTED THATCERTAIN BOND FUNDS WERE INVESTMENT-GRADE WHEN, IN FACT, THEYWERE NOT. THE FINDINGS ALSO STATED THAT THE FIRM'S SUPERVISORYSYSTEM AND WRITTEN SUPERVISORY PROCEDURES (WSPS) WERE NOTREASONABLY DESIGNED TO ACHIEVE COMPLIANCE WITH RELEVANTFINRA RULES IN THAT THE FIRM DID NOT HAVE SUPERVISORY SYSTEMSOR WSP'S RELATED TO THE ACCURACY OF THE DESCRIPTION OF THECREDIT QUALITY OF BOND FUNDS IN DOCUMENTS CREATED BY ITSAFFILIATED LIFE INSURANCE COMPANY THAT IT DISTRIBUTED TO PLANSPONSORS, AND BECAUSE IT DID NOT CONDUCT PERIODIC REVIEWS OR "SPOT CHECKS" OF THE FUND CLASSIFICATIONS TO ENSURE THAT THECREDIT QUALITY OF THE BOND FUNDS WAS DESCRIBED ACCURATELY.












Resolution:


Sanction Details: THE FIRM WAS CENSURED, FINED $600,000.00, CONSENTED TO PAYRESTITUTION TO PLAN PARTICIPANTS IN THE TOTAL AMOUNT OF$172,461.33, AND AGREED TO AN UNDERTAKING TO SEND CORRECTIVEDISCLOSURES TO ALL AFFECTED PLAN PARTICIPANTS



Disclosure 2 of 25

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Initiated By: UNITED STATES SECURITIES AND EXCHANGE COMMISSION

Allegations: IA RELEASE 40-5175 / MARCH 11, 2019: THE SECURITIES AND EXCHANGECOMMISSION DEEMS IT APPROPRIATE AND IN THE PUBLIC INTEREST THATPUBLIC ADMINISTRATIVE AND CEASE-AND-DESIST PROCEEDINGS BEINSTITUTED AGAINST AXA ADVISORS, LLC ("RESPONDENT"). ON THE BASISOF THIS ORDER AND RESPONDENT'S OFFER, THE COMMISSION FINDSTHAT THESE PROCEEDINGS ARISE OUT OF BREACHES OF FIDUCIARYDUTY AND INADEQUATE DISCLOSURES BY THE RESPONDENT INCONNECTION WITH ITS MUTUAL FUND SHARE CLASS SELECTIONPRACTICES AND THE FEES IT RECEIVED. AT TIMES DURING THE RELEVANTPERIOD, RESPONDENT PURCHASED, RECOMMENDED, OR HELD FORADVISORY CLIENTS MUTUAL FUND SHARE CLASSES THAT CHARGED 12B-1FEES INSTEAD OF LOWER-COST SHARE CLASSES OF THE SAME FUNDSFOR WHICH THE CLIENTS WERE ELIGIBLE. RESPONDENT RECEIVED 12B-1FEES IN CONNECTION WITH THESE INVESTMENTS. RESPONDENT FAILEDTO DISCLOSE IN ITS FORM ADV OR OTHERWISE THE CONFLICTS OFINTEREST RELATED TO (A) ITS RECEIPT OF 12B-1 FEES, AND/OR (B) ITSSELECTION OF MUTUAL FUND SHARE CLASSES THAT PAY SUCH FEES.DURING THE RELEVANT PERIOD, RESPONDENT RECEIVED 12B-1 FEESFOR ADVISING CLIENTS TO INVEST IN OR HOLD SUCH MUTUAL FUNDSHARE CLASSES. AS A RESULT OF THE CONDUCT, RESPONDENTWILLFULLY VIOLATED SECTIONS 206(2) AND 207 OF THE ADVISERS ACT.











Docket/Case Number: 3-19078

Principal Product Type: Mutual Fund(s)

Other Product Type(s):


Resolution:

Other Sanctions Ordered: UNDERTAKINGS AND PREJUDGMENT INTEREST

Sanction Details: THE RESPONDENT SHALL CEASE AND DESIST FROM COMMITTING ORCAUSING ANY VIOLATIONS AND ANY FUTURE VIOLATIONS OF SECTIONS206(2) AND 207 OF THE ADVISERS ACT. RESPONDENT IS CENSURED,SHALL PAY DISGORGEMENT OF $972,007.36 AND PREJUDGMENT INTERESTOF $162,144.64, AND SHALL COMPLY WITH THE UNDERTAKINGSENUMERATED IN THE OFFER OF SETTLEMENT.

Regulator Statement RESPONDENT HAS SUBMITTED AN OFFER OF SETTLEMENT WHICH THECOMMISSION HAS DETERMINED TO ACCEPT. IN VIEW OF THE FOREGOING,THE COMMISSION DEEMS IT APPROPRIATE IN THE PUBLIC INTEREST TOIMPOSE THE SANCTIONS AGREED TO IN THE RESPONDENT'S OFFER.ACCORDINGLY, IT IS ORDERED THAT RESPONDENT SHALL CEASE ANDDESIST FROM COMMITTING OR CAUSING ANY VIOLATIONS AND ANYFUTURE VIOLATIONS OF SECTIONS 206(2) AND 207 OF THE ADVISERS ACT.RESPONDENT IS CENSURED, SHALL PAY DISGORGEMENT OF $972,007.36AND PREJUDGMENT INTEREST OF $162,144.64, AND SHALL COMPLY WITHTHE UNDERTAKINGS ENUMERATED IN THE OFFER OF SETTLEMENT.

RESPONDENT SELF-REPORTED TO THE COMMISSION THE VIOLATIONSDISCUSSED IN THIS ORDER PURSUANT TO THE DIVISION OFENFORCEMENT'S SHARE CLASS SELECTION DISCLOSURE INITIATIVE("SCSD INITIATIVE"). ACCORDINGLY, THIS ORDER AND RESPONDENT'SOFFER ARE BASED ON THE INFORMATION SELF-REPORTED BYRESPONDENT.


Yes

Sanctions Ordered: CensureDisgorgement/RestitutionCease and Desist/Injunction

Order






RESPONDENT HAS SUBMITTED AN OFFER OF SETTLEMENT WHICH THECOMMISSION HAS DETERMINED TO ACCEPT. IN VIEW OF THE FOREGOING,THE COMMISSION DEEMS IT APPROPRIATE IN THE PUBLIC INTEREST TOIMPOSE THE SANCTIONS AGREED TO IN THE RESPONDENT'S OFFER.ACCORDINGLY, IT IS ORDERED THAT RESPONDENT SHALL CEASE ANDDESIST FROM COMMITTING OR CAUSING ANY VIOLATIONS AND ANYFUTURE VIOLATIONS OF SECTIONS 206(2) AND 207 OF THE ADVISERS ACT.RESPONDENT IS CENSURED, SHALL PAY DISGORGEMENT OF $972,007.36AND PREJUDGMENT INTEREST OF $162,144.64, AND SHALL COMPLY WITHTHE UNDERTAKINGS ENUMERATED IN THE OFFER OF SETTLEMENT.

RESPONDENT SELF-REPORTED TO THE COMMISSION THE VIOLATIONSDISCUSSED IN THIS ORDER PURSUANT TO THE DIVISION OFENFORCEMENT'S SHARE CLASS SELECTION DISCLOSURE INITIATIVE("SCSD INITIATIVE"). ACCORDINGLY, THIS ORDER AND RESPONDENT'SOFFER ARE BASED ON THE INFORMATION SELF-REPORTED BYRESPONDENT.


Initiated By: SECURITIES AND EXCHANGE COMMISSION


Restitution






Allegations: AT TIMES DURING THE PERIOD JANUARY 1, 2014 TO AUGUST 8,2014,RESPONDENT PURCHASED, RECOMMENDED, OR HELD FORADVISORY CLIENTS MUTUAL FUND SHARE CLASSES THAT CHARGED 12B-1FEES INSTEAD OF LOWER-COST SHARE CLASSES OF THE SAME FUNDSFOR WHICH THE CLIENTS WERE ELIGIBLE. RESPONDENT RECEIVED 12B-1FEES IN CONNECTION WITH THESE INVESTMENTS. RESPONDENT FAILEDTO DISCLOSE IN ITS FORM ADV OR OTHERWISE THE CONFLICTS OFINTEREST RELATED TO (A) ITS RECEIPT OF 12B-1 FEES, AND/OR (B) ITSSELECTION OF MUTUAL FUND SHARE CLASSES THAT PAY SUCH FEES.



Resolution:

Other Sanctions Ordered: UNDERTAKINGS AND PREJUDGMENT INTEREST

Sanction Details: THE FIRM AGREED TO (A) CEASE AND DESIST FROM COMMITTING ORCAUSING ANY VIOLATIONS AND ANY FUTURE VIOLATIONS OF SECTIONS206(2) AND 207 OF THE ADVISERS ACT, (B) BE CENSURED, (C) PAYDISGORGEMENT OF $972,007.36 AND PREJUDGMENT INTEREST OF$162,144.64, AND (D)COMPLY WITH CERTAIN ENUMERATED THEUNDERTAKINGS

Sanctions Ordered: CensureDisgorgement/RestitutionCease and Desist/Injunction

Order






THE FIRM AGREED TO (A) CEASE AND DESIST FROM COMMITTING ORCAUSING ANY VIOLATIONS AND ANY FUTURE VIOLATIONS OF SECTIONS206(2) AND 207 OF THE ADVISERS ACT, (B) BE CENSURED, (C) PAYDISGORGEMENT OF $972,007.36 AND PREJUDGMENT INTEREST OF$162,144.64, AND (D)COMPLY WITH CERTAIN ENUMERATED THEUNDERTAKINGS

Firm Statement IN AN ORDER DATED MARCH 11, 2019, THE SEC CHARGED THE FIRM WITHWILLFUL VIOLATIONS OF SECTIONS 206(2) AND 207 OF THE INVESTMENTADVISERS ACT OF 1940 ("ADVISERS ACT"), ALLEGING THAT FROMJANUARY 1, 2014 THROUGH AUGUST 8, 2014, THE FIRM AT TIMESPURCHASED, RECOMMENDED OR HELD FOR ADVISORY CLIENTS MUTUALFUND SHARE CLASSES THAT CHARGED 12B-1 FEES INSTEAD OF LOWER-COST SHARE CLASSES OF THE SAME FUNDS FOR WHICH THE CLIENTSWERE ELIGIBLE, AND FAILED TO ADEQUATELY DISCLOSE THE CONFLICTSOF INTEREST INHERENT IN SUCH RECOMMENDATIONS.WITHOUT ADMITTING OR DENYING THE FINDINGS, THE FIRM CONSENTEDTO THE IMPOSITION OF A CEASE AND DESIST ORDER, CENSURE,UNDERTAKINGS AND PAYMENT OF DISGORGEMENT AND PREJUDGMENTINTEREST TO AFFECTED CLIENTS IN THE AMOUNT OF APPROXIMATELY$1,134,152. THE SEC NOTED THE FIRM'S SELF-REPORTING OF THISMATTER IN CONNECTION WITH THE SHARE CLASS SELECTIONDISCLOSURE INITIATIVE AND THE FIRM'S CERTIFICATION OF COMPLETIONOF SUBSTANTIALLY ALL OF THE UNDERTAKINGS. THE SEC DID NOTIMPOSE A CIVIL MONETARY PENALTY

Disclosure 3 of 25

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Initiated By: FLORIDA OFFICE OF FINANCIAL REGULATION




CEASE AND DESIST


Docket/Case Number: 67597-S

URL for Regulatory Action:

Principal Product Type: Annuity(ies) - Variable


Allegations: N/A



Resolution: Order







Other Sanctions Ordered:

Sanction Details: $50,000.00 ADMINISTRATIVE FINE PAID IN FULL 8/8/2018

Regulator Statement ON AUGUST 8, 2018, THE OFFICE OF FINANCIAL REGULATION ENTERED AFINAL ORDER ADOPTING THE STIPULATION AND CONSENT AGREEMENT INTHE MATTER OF AXA ADVISORS, LLC. AXA ADVISORS, LLC NEITHERADMITTED NOR DENIED THE FINDINGS BUT CONSENTED TO THE ENTRYOF FINDINGS BY THE OFFICE. THE OFFICE FOUND THAT AXA ADVISORS,LLC FAILED TO ESTABLISH AND MAINTAIN A SYSTEM TO SUPERVISEREGISTERED REPRESENTATIVE, PRINCIPALS AND ASSOCIATED PERSONS;AND FAILED TO ENFORCE WRITTEN SUPERVISORY PROCEDURES. INADDITION, AXA ADVISORS, LLC RECOMMENDED AN ANNUITY WITHOUT AREASONABLE BASIS TO BELIEVE IT WAS SUITABLE, AND APPROVEDANNUITY APPLICATIONS THAT WERE NOT CORRECT. PURSUANT TO THEFINAL ORDER, AXA ADVISORS, LLC AGREED TO CEASE AND DESIST FROMALL PRESENT AND FUTURE VIOLATIONS OF CHAPTER 517, F. S. AND THEADMINISTRATIVE RULES THEREUNDER; AND TO PAY AN ADMINISTRATIVEFINE IN THE AMOUNT OF $50,000.00.


No

Sanctions Ordered: Monetary/Fine $50,000.00Cease and Desist/Injunction


Initiated By: STATE OF FLORIDA OFFICE OF FINANCIAL REGULATION


Docket/Case Number: NO.: 67597-S


Allegations: AFTER THE FIRM TERMINATED A REGISTERED REPRESENTATIVE FORMAKING MISREPRESENTATIONS ON MULTIPLE CUSTOMER VARIABLEANNUITY APPLICATIONS, A ROUTINE EXAM OF THE FIRM'S BOCA RATONOFFICE WAS CONDUCTED. THE STATE ALLEGED THAT THE FIRM VIOLATEDNASD RULE 3010(A),3010(B), AND CERTAIN PROVISIONS OF CHAPTER 517,FLORIDA STATUTES.













Resolution:


Sanction Details: THE FIRM AGREED TO PAY A FINE OF $50,000.

Firm Statement THE FIRM AGREED TO PAY AN ADMINISTRATIVE FINE OF $50,000.00. IN ADDITION, THE FIRM AGREED TO CEASE AND DESIST FROMVIOLATIONS OF CHAPTER 517, FLORIDA STATUTES, AND COMPLY WITH ALLPROVISIONS CONTAINED WITHIN IT.

Sanctions Ordered: Monetary/Fine $50,000.00

Stipulation and Consent

Disclosure 4 of 25

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Allegations: WITHOUT ADMITTING OR DENYING THE FINDINGS, THE FIRM CONSENTEDTO THE SANCTIONS AND TO THE ENTRY OF FINDINGS THAT SINCE ATLEAST JULY 1, 2009, IT HAS DISADVANTAGED CERTAIN RETIREMENT PLANAND CHARITABLE ORGANIZATION CUSTOMERS WHO WERE ELIGIBLE TOPURCHASE CLASS A SHARES IN CERTAIN MUTUAL FUNDS WITHOUT AFRONT-END SALES CHARGE. THE FINDINGS STATED THATNOTWITHSTANDING THE AVAILABILITY OF THE WAIVERS, THE FIRM FAILEDTO APPLY THE WAIVERS TO MUTUAL FUND PURCHASES MADE BYELIGIBLE CUSTOMERS AND INSTEAD SOLD TO THEM CLASS A SHARESWITH A FRONT-END SALES CHARGE OR CLASS B OR C SHARES WITHBACK-END SALES CHARGES AND HIGHER ONGOING FEES AND EXPENSES.THESE SALES DISADVANTAGED ELIGIBLE CUSTOMERS BY CAUSING SUCHCUSTOMERS TO PAY HIGHER FEES THAN THEY WERE ACTUALLYREQUIRED TO PAY. THE FINDINGS ALSO STATED THAT THE FIRM HASFAILED TO REASONABLY SUPERVISE THE APPLICATION OF SALESCHARGE WAIVERS TO ELIGIBLE MUTUAL FUND SALES. THE FIRM RELIEDON ITS REGISTERED REPRESENTATIVES, AND ON THE SUPERVISORYSYSTEMS AND PERSONNEL OF ANOTHER FINRA MEMBER FIRM TOEXECUTE, MONITOR, AND ADMINISTER ITS REGISTEREDREPRESENTATIVES' TRADES IN MUTUAL FUNDS FOR ITS CUSTOMERS, TODETERMINE THE APPLICABILITY OF SALES CHARGE WAIVERS, BUT FAILEDTO MAINTAIN ADEQUATE WRITTEN POLICIES AND PROCEDURES ANDCONTROLS TO ASSIST ITS REGISTERED REPRESENTATIVES IN MAKINGTHIS DETERMINATION. FOR INSTANCE, THE FIRM FAILED TO ESTABLISHAND MAINTAIN WRITTEN PROCEDURES TO IDENTIFY APPLICABLE SALESCHARGE WAIVERS IN FUND PROSPECTUSES FOR ELIGIBLE CUSTOMERS,AND TO ADEQUATELY NOTIFY AND TRAIN ITS REGISTEREDREPRESENTATIVES REGARDING THE AVAILABILITY OF MUTUAL FUNDSALES CHARGE WAIVERS FOR ELIGIBLE CUSTOMERS.







Initiated By: FINRA


Other


N/A





WITHOUT ADMITTING OR DENYING THE FINDINGS, THE FIRM CONSENTEDTO THE SANCTIONS AND TO THE ENTRY OF FINDINGS THAT SINCE ATLEAST JULY 1, 2009, IT HAS DISADVANTAGED CERTAIN RETIREMENT PLANAND CHARITABLE ORGANIZATION CUSTOMERS WHO WERE ELIGIBLE TOPURCHASE CLASS A SHARES IN CERTAIN MUTUAL FUNDS WITHOUT AFRONT-END SALES CHARGE. THE FINDINGS STATED THATNOTWITHSTANDING THE AVAILABILITY OF THE WAIVERS, THE FIRM FAILEDTO APPLY THE WAIVERS TO MUTUAL FUND PURCHASES MADE BYELIGIBLE CUSTOMERS AND INSTEAD SOLD TO THEM CLASS A SHARESWITH A FRONT-END SALES CHARGE OR CLASS B OR C SHARES WITHBACK-END SALES CHARGES AND HIGHER ONGOING FEES AND EXPENSES.THESE SALES DISADVANTAGED ELIGIBLE CUSTOMERS BY CAUSING SUCHCUSTOMERS TO PAY HIGHER FEES THAN THEY WERE ACTUALLYREQUIRED TO PAY. THE FINDINGS ALSO STATED THAT THE FIRM HASFAILED TO REASONABLY SUPERVISE THE APPLICATION OF SALESCHARGE WAIVERS TO ELIGIBLE MUTUAL FUND SALES. THE FIRM RELIEDON ITS REGISTERED REPRESENTATIVES, AND ON THE SUPERVISORYSYSTEMS AND PERSONNEL OF ANOTHER FINRA MEMBER FIRM TOEXECUTE, MONITOR, AND ADMINISTER ITS REGISTEREDREPRESENTATIVES' TRADES IN MUTUAL FUNDS FOR ITS CUSTOMERS, TODETERMINE THE APPLICABILITY OF SALES CHARGE WAIVERS, BUT FAILEDTO MAINTAIN ADEQUATE WRITTEN POLICIES AND PROCEDURES ANDCONTROLS TO ASSIST ITS REGISTERED REPRESENTATIVES IN MAKINGTHIS DETERMINATION. FOR INSTANCE, THE FIRM FAILED TO ESTABLISHAND MAINTAIN WRITTEN PROCEDURES TO IDENTIFY APPLICABLE SALESCHARGE WAIVERS IN FUND PROSPECTUSES FOR ELIGIBLE CUSTOMERS,AND TO ADEQUATELY NOTIFY AND TRAIN ITS REGISTEREDREPRESENTATIVES REGARDING THE AVAILABILITY OF MUTUAL FUNDSALES CHARGE WAIVERS FOR ELIGIBLE CUSTOMERS.


Resolution:

Other Sanctions Ordered: INTEREST

Sanction Details: THE FIRM WAS CENSURED AND REQUIRED TO PAY $602,322, INCLUDINGINTEREST, IN RESTITUTION TO ELIGIBLE CUSTOMERS.

Regulator Statement IN JUNE 2014, THE FINRA MEMBER FIRM THAT THE FIRM HIRED FORTRADE EXECUTION AND ADMINISTRATION BEGAN A REVIEW TODETERMINE WHETHER IT, AND THE FIRM, HAD PROVIDED AVAILABLESALES CHARGE WAIVERS TO ELIGIBLE CUSTOMERS. BASED ON THATMEMBER FIRM'S REVIEW, THE FIRM SELF-REPORTED TO FINRA THATELIGIBLE CUSTOMERS MAY NOT HAVE RECEIVED AVAILABLE SALESCHARGE WAIVERS. THE FIRM ESTIMATES THAT ITS CUSTOMERS MADEAPPROXIMATELY 3,328 TRANSACTIONS IN 435 ACCOUNTS BETWEEN JULY1, 2009 AND DECEMBER 31, 2014 IN WHICH AN AVAILABLE SALES CHARGEWAIVER WAS NOT APPLIED. AS A RESULT OF THE FIRM'S FAILURE TOAPPLY AVAILABLE SALES CHARGE WAIVERS, THE FIRM ESTIMATES THATELIGIBLE CUSTOMERS HAVE BEEN OVERCHARGED BY APPROXIMATELY$544,050 FOR MUTUAL FUND PURCHASES DURING THIS PERIOD. AS PARTOF THIS SETTLEMENT, THE FIRM HAS INITIATED PAYMENT OFRESTITUTION OF APPROXIMATELY $602,322 TO ELIGIBLE CUSTOMERS (I.E.,THE AMOUNT THEY WERE OVERCHARGED PLUS INTEREST). IN ADDITION,THE FIRM AGREES TO PAY RESTITUTION TO ELIGIBLE CUSTOMERS WHOPURCHASED OR PURCHASE MUTUAL FUNDS WITHOUT AN APPROPRIATESALES CHARGE WAIVER DURING THE PERIOD JANUARY 1, 2015 THROUGHTHE DATE THAT THE FIRM ESTABLISHES AND FULLY IMPLEMENTSTRAINING, SYSTEMS, AND PROCEDURES REASONABLY DESIGNED TOACHIEVE COMPLIANCE WITH THE SUPERVISION OF MUTUAL FUND SALESWAIVERS. THE FIRM WILL ALSO ENSURE THAT RETIREMENT ANDCHARITABLE WAIVERS ARE APPROPRIATELY APPLIED TO ALL FUTURETRANSACTIONS.IN RESOLVING THIS MATTER, FINRA HAS RECOGNIZED THEEXTRAORDINARY COOPERATION OF THE FIRM FOR HAVING: CONDUCTED,PRIOR TO DETECTION OR INTERVENTION BY A REGULATOR, ANINVESTIGATION TO IDENTIFY WHETHER ELIGIBLE CUSTOMERS RECEIVEDSALES CHARGE WAIVERS SINCE JULY 1, 2009; PROMPTLY ESTABLISHED APLAN OF REMEDIATION FOR ELIGIBLE CUSTOMERS WHO DID NOTRECEIVE APPROPRIATE SALES CHARGE WAIVERS; PROMPTLY SELF-REPORTED TO FINRA; PROMPTLY TAKEN ACTION AND REMEDIAL STEPSTO CORRECT THE VIOLATIVE CONDUCT; AND EMPLOYED SUBSEQUENTCORRECTIVE MEASURES, PRIOR TO DETECTION OR INTERVENTION BY AREGULATOR, TO REVISE ITS PROCEDURES TO AVOID RECURRENCE OFTHE MISCONDUCT.


No

Sanctions Ordered: CensureDisgorgement/Restitution








IN JUNE 2014, THE FINRA MEMBER FIRM THAT THE FIRM HIRED FORTRADE EXECUTION AND ADMINISTRATION BEGAN A REVIEW TODETERMINE WHETHER IT, AND THE FIRM, HAD PROVIDED AVAILABLESALES CHARGE WAIVERS TO ELIGIBLE CUSTOMERS. BASED ON THATMEMBER FIRM'S REVIEW, THE FIRM SELF-REPORTED TO FINRA THATELIGIBLE CUSTOMERS MAY NOT HAVE RECEIVED AVAILABLE SALESCHARGE WAIVERS. THE FIRM ESTIMATES THAT ITS CUSTOMERS MADEAPPROXIMATELY 3,328 TRANSACTIONS IN 435 ACCOUNTS BETWEEN JULY1, 2009 AND DECEMBER 31, 2014 IN WHICH AN AVAILABLE SALES CHARGEWAIVER WAS NOT APPLIED. AS A RESULT OF THE FIRM'S FAILURE TOAPPLY AVAILABLE SALES CHARGE WAIVERS, THE FIRM ESTIMATES THATELIGIBLE CUSTOMERS HAVE BEEN OVERCHARGED BY APPROXIMATELY$544,050 FOR MUTUAL FUND PURCHASES DURING THIS PERIOD. AS PARTOF THIS SETTLEMENT, THE FIRM HAS INITIATED PAYMENT OFRESTITUTION OF APPROXIMATELY $602,322 TO ELIGIBLE CUSTOMERS (I.E.,THE AMOUNT THEY WERE OVERCHARGED PLUS INTEREST). IN ADDITION,THE FIRM AGREES TO PAY RESTITUTION TO ELIGIBLE CUSTOMERS WHOPURCHASED OR PURCHASE MUTUAL FUNDS WITHOUT AN APPROPRIATESALES CHARGE WAIVER DURING THE PERIOD JANUARY 1, 2015 THROUGHTHE DATE THAT THE FIRM ESTABLISHES AND FULLY IMPLEMENTSTRAINING, SYSTEMS, AND PROCEDURES REASONABLY DESIGNED TOACHIEVE COMPLIANCE WITH THE SUPERVISION OF MUTUAL FUND SALESWAIVERS. THE FIRM WILL ALSO ENSURE THAT RETIREMENT ANDCHARITABLE WAIVERS ARE APPROPRIATELY APPLIED TO ALL FUTURETRANSACTIONS.IN RESOLVING THIS MATTER, FINRA HAS RECOGNIZED THEEXTRAORDINARY COOPERATION OF THE FIRM FOR HAVING: CONDUCTED,PRIOR TO DETECTION OR INTERVENTION BY A REGULATOR, ANINVESTIGATION TO IDENTIFY WHETHER ELIGIBLE CUSTOMERS RECEIVEDSALES CHARGE WAIVERS SINCE JULY 1, 2009; PROMPTLY ESTABLISHED APLAN OF REMEDIATION FOR ELIGIBLE CUSTOMERS WHO DID NOTRECEIVE APPROPRIATE SALES CHARGE WAIVERS; PROMPTLY SELF-REPORTED TO FINRA; PROMPTLY TAKEN ACTION AND REMEDIAL STEPSTO CORRECT THE VIOLATIVE CONDUCT; AND EMPLOYED SUBSEQUENTCORRECTIVE MEASURES, PRIOR TO DETECTION OR INTERVENTION BY AREGULATOR, TO REVISE ITS PROCEDURES TO AVOID RECURRENCE OFTHE MISCONDUCT.


Allegations: FINRA ALLEGES THAT SINCE AT LEAST JULY 1,2009, AXA ADVISORS SOLDCERTAIN RETIREMENT PLAN AND CHARITABLE ORGANIZATIONCUSTOMERS CERTAIN MUTUAL FUNDS WITH A FRONT-END SALESCHARGE OR CLASS B OR CLASS C SHARES WITH BACK-END SALESCHARGES AND HIGHER ONGOING FEES AND EXPENSES WHEN THEYWERE ELIGIBLE TO PURCHASE CLASS A SHARES WITHOUT A FRONT-ENDSALES CHARGE. DURING THIS PERIOD, AXA ADVISORS RELIED ONANOTHER MEMBER FIRM TO EXECUTE ITS CUSTOMERS' TRADES INMUTUAL FUNDS AND TO MONITOR AND ADMINISTER THE TRADE ORDERSPLACED BY ITS REGISTERED REPRESENTATIVES. CONSEQUENTLY, AXADID NOT ESTABLISH ITS OWN SUPERVISORY PROCEDURES REASONABLYDESIGNED TO ENSURE THAT ELIGIBLE CUSTOMERS WHO PURCHASEDTHOSE MUTUAL FUND SHARES RECEIVED THE BENEFIT OF APPLICABLESALES CHARGE WAIVERS.







Initiated By: FINRA


Censure


RESTITUTION TO ALL AFFECTED CLIENTS





FINRA ALLEGES THAT SINCE AT LEAST JULY 1,2009, AXA ADVISORS SOLDCERTAIN RETIREMENT PLAN AND CHARITABLE ORGANIZATIONCUSTOMERS CERTAIN MUTUAL FUNDS WITH A FRONT-END SALESCHARGE OR CLASS B OR CLASS C SHARES WITH BACK-END SALESCHARGES AND HIGHER ONGOING FEES AND EXPENSES WHEN THEYWERE ELIGIBLE TO PURCHASE CLASS A SHARES WITHOUT A FRONT-ENDSALES CHARGE. DURING THIS PERIOD, AXA ADVISORS RELIED ONANOTHER MEMBER FIRM TO EXECUTE ITS CUSTOMERS' TRADES INMUTUAL FUNDS AND TO MONITOR AND ADMINISTER THE TRADE ORDERSPLACED BY ITS REGISTERED REPRESENTATIVES. CONSEQUENTLY, AXADID NOT ESTABLISH ITS OWN SUPERVISORY PROCEDURES REASONABLYDESIGNED TO ENSURE THAT ELIGIBLE CUSTOMERS WHO PURCHASEDTHOSE MUTUAL FUND SHARES RECEIVED THE BENEFIT OF APPLICABLESALES CHARGE WAIVERS.


Resolution:

Other Sanctions Ordered: RESTITUTION INCLUDING INTEREST

Sanction Details: THE FIRM AGREED TO PAY RESTITUTION TO ALL AFFECTED CLIENTSTOTALING $602321.71.

Firm Statement THE FIRM ACCEPTED AND CONSENTED TO, WITHOUT ADMITTING ORDENYING THE FINDINGS, AND SOLELY FOR THE PURPOSES OF THISPROCEEDING BROUGHT BY OR ON BEHALF OF FINRA, TO RESOLVE THISMATTER BY PAYING RESTITUTION TO ALL AFFECTED CLIENTS.

Sanctions Ordered: CensureDisgorgement/Restitution

Consent

Disclosure 5 of 25

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Allegations: WITHOUT ADMITTING OR DENYING THE FINDINGS, THE FIRM CONSENTEDTO THE SANCTIONS AND TO THE ENTRY OF FINDINGS THAT IT FAILED TOARBITRATE 102 DISPUTES,UNDER FINRA'S CODE OF ARBITRATIONPROCEDURE, BETWEEN THE FIRM AND ASSOCIATED PERSONS THATAROSE FROM THE BUSINESS ACTIVITIES OF THE FIRM AND THEASSOCIATED PERSONS. THE FINDINGS STATED THAT FINRA'S RULEREQUIRES THAT DISPUTES BETWEEN MEMBER FIRMS AND ASSOCIATEDPERSONS BE ARBITRATED IF THEY ARISE OUT OF THE BUSINESSACTIVITIES OF THE MEMBER OR ASSOCIATED PERSON. THE 102 ACTIONSWERE FILED IN STATE COURTS TO RECOVER PRE-PAID SECURITIESCOMMISSIONS FROM FORMER FIRM REGISTERED REPRESENTATIVESWHO HAD RECEIVED THOSE COMMISSIONS FROM THE FIRM'S AFFILIATEDSUBSIDIARY ACTING AS PAYMASTER. BECAUSE THESE PROCEEDINGSSOUGHT RECOVERY OF SECURITIES COMMISSIONS, THEY WEREDISPUTES BETWEEN THE FIRM AND THE REGISTERED REPRESENTATIVESRELATING TO THE BUSINESS ACTIVITIES OF BOTH. THE FINDINGSINCLUDED THAT ALTHOUGH THE FIRM'S AFFILIATED SUBSIDIARY SERVESAS PAYMASTER, THE FIRM ALONE DETERMINES THE AMOUNT OFSECURITIES COMMISSIONS TO BE PAID TO ITS REGISTEREDREPRESENTATIVES. ALL COMMISSION PAYMENTS FOR SECURITIESBUSINESS, INCLUDING VARIABLE INSURANCE BUSINESS, MADE BY THEAFFILIATE TO REGISTERED REPRESENTATIVES OF THE FIRM AREDIRECTED BY, AND PAID ON BEHALF OF, THE FIRM AS THE REGISTEREDBROKER-DEALER. THE FIRM ALSO SUPERVISES THE SECURITIESBUSINESS AND RECORDS THE SECURITIES TRANSACTIONS ON ITSBOOKS AND RECORDS. FINRA FOUND THAT WHEN THE AFFILIATE WASUNSUCCESSFUL IN COLLECTING THE COMMISSION-RELATED DEBTDIRECTLY FROM FORMER REGISTERED REPRESENTATIVES IT OFTENSENT THE MATTERS TO THIRD-PARTY COLLECTION AGENCIES. IN MOSTINSTANCES, THE COLLECTION AGENCIES SUCCESSFULLY RECOVEREDTHE AMOUNTS OWED THROUGH NON-JUDICIAL MEANS. HOWEVER, WHENUNABLE TO COLLECT THROUGH NON-JUDICIAL MEANS, THE COLLECTIONAGENCIES FILED LAWSUITS IN STATE COURTS TO RECOVER THE DEBT.








Initiated By: FINRA


Other


N/A




Other Product Type(s): FIXED AND VARIABLE INSURANCE PRODUCTS AND SECURITIESPRODUCTS

WITHOUT ADMITTING OR DENYING THE FINDINGS, THE FIRM CONSENTEDTO THE SANCTIONS AND TO THE ENTRY OF FINDINGS THAT IT FAILED TOARBITRATE 102 DISPUTES,UNDER FINRA'S CODE OF ARBITRATIONPROCEDURE, BETWEEN THE FIRM AND ASSOCIATED PERSONS THATAROSE FROM THE BUSINESS ACTIVITIES OF THE FIRM AND THEASSOCIATED PERSONS. THE FINDINGS STATED THAT FINRA'S RULEREQUIRES THAT DISPUTES BETWEEN MEMBER FIRMS AND ASSOCIATEDPERSONS BE ARBITRATED IF THEY ARISE OUT OF THE BUSINESSACTIVITIES OF THE MEMBER OR ASSOCIATED PERSON. THE 102 ACTIONSWERE FILED IN STATE COURTS TO RECOVER PRE-PAID SECURITIESCOMMISSIONS FROM FORMER FIRM REGISTERED REPRESENTATIVESWHO HAD RECEIVED THOSE COMMISSIONS FROM THE FIRM'S AFFILIATEDSUBSIDIARY ACTING AS PAYMASTER. BECAUSE THESE PROCEEDINGSSOUGHT RECOVERY OF SECURITIES COMMISSIONS, THEY WEREDISPUTES BETWEEN THE FIRM AND THE REGISTERED REPRESENTATIVESRELATING TO THE BUSINESS ACTIVITIES OF BOTH. THE FINDINGSINCLUDED THAT ALTHOUGH THE FIRM'S AFFILIATED SUBSIDIARY SERVESAS PAYMASTER, THE FIRM ALONE DETERMINES THE AMOUNT OFSECURITIES COMMISSIONS TO BE PAID TO ITS REGISTEREDREPRESENTATIVES. ALL COMMISSION PAYMENTS FOR SECURITIESBUSINESS, INCLUDING VARIABLE INSURANCE BUSINESS, MADE BY THEAFFILIATE TO REGISTERED REPRESENTATIVES OF THE FIRM AREDIRECTED BY, AND PAID ON BEHALF OF, THE FIRM AS THE REGISTEREDBROKER-DEALER. THE FIRM ALSO SUPERVISES THE SECURITIESBUSINESS AND RECORDS THE SECURITIES TRANSACTIONS ON ITSBOOKS AND RECORDS. FINRA FOUND THAT WHEN THE AFFILIATE WASUNSUCCESSFUL IN COLLECTING THE COMMISSION-RELATED DEBTDIRECTLY FROM FORMER REGISTERED REPRESENTATIVES IT OFTENSENT THE MATTERS TO THIRD-PARTY COLLECTION AGENCIES. IN MOSTINSTANCES, THE COLLECTION AGENCIES SUCCESSFULLY RECOVEREDTHE AMOUNTS OWED THROUGH NON-JUDICIAL MEANS. HOWEVER, WHENUNABLE TO COLLECT THROUGH NON-JUDICIAL MEANS, THE COLLECTIONAGENCIES FILED LAWSUITS IN STATE COURTS TO RECOVER THE DEBT.


Resolution:


No









Sanction Details: THE FIRM WAS CENSURED AND FINED $150,000. FINE PAID IN FULL ONMARCH 17, 2015.


No

Sanctions Ordered: CensureMonetary/Fine $150,000.00


Initiated By: FINRA


Censure


FINE OF $150,000


Docket/Case Number: NO. 2012034518801

Principal Product Type: Insurance


Allegations: FINRA ALLEGED THAT AXA ADVISORS, LLC FAILED TO ARBITRATE UNDERFINRA'S CODE OF ARBITRATION PROCEDURE, 102 DISPUTES BETWEENTHE FIRM AND ASSOCIATED PERSONS THAT AROSE FROM THE BUSINESSACTIVITIES OF THE FIRM AND THE ASSOCIATED PERSONS.



Resolution:


Sanction Details: RESPONDENT ACCEPTED AND CONSENTED, WITHOUT ADMITTING ORDENYING ANY FINDINGS, AND SOLELY FOR THE PURPOSES OF THISPROCEEDING BROUGHT BY OR ON BEHALF OF FINRA, PRIOR TO AHEARING AND WITHOUT ADJUDICATION. RESPONDENT AGREED TO PAYTHE MONETARY FINE OF $150,000 UPON ACCEPTANCE OF THE AWC.







www.finra.org/brokercheck User GuidanceRESPONDENT ACCEPTED AND CONSENTED, WITHOUT ADMITTING ORDENYING ANY FINDINGS, AND SOLELY FOR THE PURPOSES OF THISPROCEEDING BROUGHT BY OR ON BEHALF OF FINRA, PRIOR TO AHEARING AND WITHOUT ADJUDICATION. RESPONDENT AGREED TO PAYTHE MONETARY FINE OF $150,000 UPON ACCEPTANCE OF THE AWC.

Disclosure 6 of 25

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Initiated By: FLORIDA OFFICE FINANCIAL REGULATION ("OFR")


Docket/Case Number: 0662-S-8/12


Allegations: DESPITE HAVING ESTABLISHED A SUPERVISORY PROGRAM REASONABLYDESIGNED TO PREVENT AND DETECT FRAUDULENT ACTIVITY BYASSOCIATED PERSONS, INCLUDING ANNUAL ON-SITE INSPECTIONSAND OFF-SITE MONITORING, RESPONDENT DID NOT DETECT HALL'SACTIVITY. THE OFFICE'S FINDING IS BASED ON THE FOLLOWING: (1.)ALTHOUGH HALL WAS SUBJECT TO FOUR INSPECTIONS DURING HISTHREE-YEAR ASSOCIATION WITH THE FIRM, IN ONE OF THOSEINSPECTIONS THE BRANCH CONTROLS MANAGER DID NOT FOLLOW THEFIRM'S PROTOCOL. IN THIS INSTANCE, HALL WAS TOLD WHICH CLIENTFILES WOULD BE REVIEWED.(2.) IN EACH OF RESPONDENT'S FOUR INSPECTIONS OF HALL, THEINSPECTION WAS CONDUCTED ON AN ANNOUNCED BASIS. RESPONDENTDID NOT EFFECTIVELY USE UNANNOUNCED INSPECTIONS AS A TOOL FORDETECTING OR DETERRING MISCONDUCT IN ITS JACKSONVILLE AREAOFFICES. LESS THAN 1% OF RESPONDENT'S INSPECTIONS CONDUCTEDOF ITS JACKSONVILLE AREA OFFICES DURING HALL'S ASSOCIATION WERECONDUCTED UNANNOUNCED. (3.) THE FOLLOWING RISK FACTORSCUMULATIVELY MAY HAVE WARRANTED RESPONDENT'S CLOSERSCRUTINY OF HALL'S BUSINESS ACTIVITIES DURING THE COURSE OF HISASSOCIATION: (A) RESPONDENT CITED HALL IN THREE OF HIS FOURANNUAL INSPECTIONS FOR FAILURE TO FOLLOW FIRM RECORDKEEPINGREQUIREMENTS, INCLUDING MISSING CUSTOMER DOCUMENTS (FACTFINDERS AND RISK TOLERANCE QUESTIONNAIRES) IN CERTAIN FILES,FAILURE TO TIMELY SUBMIT LOGS OF CORRESPONDENCE AND CHECKSRECEIVED, AND FAILURE TO READ ELECTRONIC COMPLIANCE BULLETINS.(B) HALL'S PRODUCTION FOR RESPONDENT EVENTUALLY DECLINED TO ALEVEL WHERE MAINTAINING HIS OFFICE AND EMPLOYING AN ASSISTANTWOULD NOT HAVE BEEN POSSIBLE WITHOUT RELYING PRIMARILY ONOUTSIDE BUSINESS ACTIVITIES.(C) HALL USED AN OUTSIDE WEBSITE FOR NON-AXA RELATED BUSINESSWHICH WAS NOT DETECTED OR APPROVED BY RESPONDENT. (D) HALLHAD DISCLOSABLE EVENTS FROM PRIOR FIRMS.










REIMBURSEMENT OF COSTS $15,000.00

Principal Product Type: No Product



Resolution:

Other Sanctions Ordered: CONTINUING CORRECTIVE ACTIONS & REIMBURSEMENT OF COSTS

Sanction Details: ON 9/4/2013, THE OFFICE OF FINANCIAL REGULATION ("OFFICE") ENTEREDA FINAL ORDER ADOPTING THE STIPULATION AND CONSENT AGREEMENTIN THE MATTER OF AXA ADVISORS, LLC ("RESPONDENT"). THE OFFICEFINDS AND THE RESPONDENT HEREBY ACCEPTS AND CONSENTS TO,WITHOUT ADMITTING ORDENYING THE FOLLOWING: THE OFFICE FINDS THAT RESPONDENT WAS INVIOLATION OF RULE 69W-600.013(1)(H), FLORIDA ADMINISTRATIVE CODE.RESPONDENT AGREES TO CONTINUE IMPROVEMENTS TO ITSSUPERVISORY POLICIES AND SYSTEM AS REPRESENTED TOREASONABLY DETECT AND PREVENT FUTURE VIOLATIONS OF CHAPTER69W-600, FLORIDA ADMINISTRATIVE CODE BY ITS ASSOCIATED PERSONS.RESPONDENT AGREES TO PAY AN ADMINISTRATIVE FINE IN THE AMOUNTOF $35,000. RESPONDENT AGREES TO MAKE PAYMENT OF $15,000 TOOFFSET THE SIGNIFICANT COSTS INCURRED BY THE OFFICE INCONDUCTING ITS INVESTIGATION OF THIS MATTER.


No


Order


Allegations: THE STATE OF FLORIDA OFFICE OF FINANCIAL REGULATION CONDUCTEDAN EXAMINATION TO DETERMINE IF PRIOR TO AND DURING THE COURSEOF THE ASSOCIATION OF ANDERSON SCOTT HALL WITH THE FIRM, ANASSOCIATED PERSON WHO HAD BEEN DISCHARGED BY THE FIRM FORPOSSIBLE COMMINGLING AND CONVERSION OF CLIENT FUNDS, THE FIRMHAD ESTABLISHED PROCEDURES AND A SUPERVISORY SYSTEMREASONABLY EXPECTED TO PREVENT AND DETECT FRAUDULENTSCHEMES AND WHETHER THE FIRM REASONABLY DISCHARGED ITSSUPERVISORY DUTIES AND OBLIGATIONS.







Initiated By: STATE OF FLORIDA, OFFICE OF FINANCIAL REGULATION





Docket/Case Number: 0662-S-8/12



THE STATE OF FLORIDA OFFICE OF FINANCIAL REGULATION CONDUCTEDAN EXAMINATION TO DETERMINE IF PRIOR TO AND DURING THE COURSEOF THE ASSOCIATION OF ANDERSON SCOTT HALL WITH THE FIRM, ANASSOCIATED PERSON WHO HAD BEEN DISCHARGED BY THE FIRM FORPOSSIBLE COMMINGLING AND CONVERSION OF CLIENT FUNDS, THE FIRMHAD ESTABLISHED PROCEDURES AND A SUPERVISORY SYSTEMREASONABLY EXPECTED TO PREVENT AND DETECT FRAUDULENTSCHEMES AND WHETHER THE FIRM REASONABLY DISCHARGED ITSSUPERVISORY DUTIES AND OBLIGATIONS.


Resolution:

Other Sanctions Ordered: $15000 IN FEES

Sanction Details: FIRM WAS ORDERED TO PAY $35000 MONETARY FINE AND AN ADDITIONAL$15000 IN FEES.

Firm Statement THE STATE OF FLORIDA OFFICE OF FINANCIAL REGULATION FOUND THATTHE FIRM HAD ESTABLISHED A SUPERVISORY PROGRAM REASONABLYDESIGNED TO PREVENT AND DETECT FRAUDULENT ACTIVITY BYASSOCIATED PERSONS, INCLUDING ANNUAL ON-SITE INSPECTIONS ANDOFF-SITE MONITORING, BUT THE FIRM DID NOT DETECT HALL'S ACTIVITYAND AS SUCH WERE IN VIOLATION OF RULE 69W-600.013(1) (H) OF THEFLORIDA ADMINISTRATIVE CODE.


Order

Disclosure 7 of 25

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Allegations: FINRA RULE 2010, NASD RULES 2110, 3010: THE FIRM FAILED REASONABLYTO SUPERVISE, A REGISTERED REPRESENTATIVE ASSOCIATED WITH THEFIRM. THE FIRM HAD PLACED THE REGISTERED REPRESENTATIVE ONHEIGHTENED SUPERVISION WHEN HE REGISTERED WITH THE FIRM.DURING THE TIME HE WAS ON HEIGHTENED SUPERVISION, THEREGISTERED REPRESENTATIVE MISAPPROPRIATED APPROXIMATELY$122,000 FROM A CUSTOMER ACCOUNT. THE FIRM FAILED TO CONDUCT AMEANINGFUL REVIEW OF THE REPRESENTATIVE'S ACTIVITIES INCONNECTION WITH THIS CUSTOMER'S ACCOUNT AND, AS A RESULT,FAILED TO REASONABLY SUPERVISE THE REPRESENTATIVE. THEREPRESENTATIVE'S CONDUCT INCLUDED THE PROCESSING OF A CHANGEOF BROKER-DEALER FORM THAT HAD HIS BUSINESS ADDRESS AS THECLIENT ADDRESS OF RECORD, THE ISSUANCE OF MULTIPLE FRAUDULENTREDEMPTION REQUESTS ON BEHALF OF A CUSTOMER, THE RECEIPT OFMULTIPLE DISBURSEMENT CHECKS AT HIS OFFICE, AND THE THEFT BYHIM OF THOSE CHECKS. DESPITE THE NATURE OF THE MISCONDUCT,WHICH OCCURRED OVER A PERIOD OF ALMOST A YEAR, NONE OF THEIMPROPER ACTIVITY IN THE CUSTOMER'S ACCOUNT WAS ADEQUATELYREVIEWED BY, OR DETECTED BY, THE FIRM. THE FIRM DID NOT REVIEWTHE ADDRESS ON THE BROKER-DEALER CHANGE FORM AND DURINGTHAT PERIOD HAD NO SYSTEM FOR DETECTING WHETHER THEADDRESSES LISTED FOR LEVEL 4 ACCOUNTS, SUCH AS THE CUSTOMER'S,WERE THE SAME AS THE ADDRESS FOR A REGISTERED REPRESENTATIVEOR OFFICE OF THE FIRM. THE FIRM ALSO DID NOT INCLUDE THECUSTOMER'S ACCOUNT AS PART OF THE MONITORING OF THEREPRESENTATIVE UNDER HIS HEIGHTENED SUPERVISION BECAUSE ITWAS AN EXISTING ACCOUNT THAT WAS TRANSFERRED FROM HIS PRIORBROKER-DEALER TO THE FIRM. DESPITE THE RAPID DIMINUTION IN THECUSTOMER'S ACCOUNT VALUE, THE FIRM'S SYSTEMS ALLOWED FOR THEREDEMPTION REQUESTS TO BE APPROVED WITHOUT INDIVIDUALIZEDREVIEW. AS A RESULT, THE FIRM DID NOT ADEQUATELY REVIEW THEACTIVITIES IN THE ACCOUNT THAT RESULTED IN THE DIMINUTION OF THEVALUE OF THE ACCOUNT FOR ALMOST A YEAR. THE FIRM'S PROCESSINGOF THE BROKER-DEALER CHANGE FORM, THE CUSTOMER'S ACCOUNTSTATEMENTS AND FUND DISBURSEMENT CHECKS WERE SENT DIRECTLYTO THE REPRESENTATIVE'S OFFICE AND NOT TO THE CUSTOMER. THESUITABILITY SYSTEM FLAGGED THE ACCOUNT FOR FURTHER REVIEW BYTHE REPRESENTATIVE'S CONTROLS MANAGER. THE CONTROLSMANAGER DETERMINED THAT THE INVESTMENT ALLOCATION WASSUITABLE AND APPROVED THE ACCOUNT. DURING HIS REVIEW, THECONTROLS MANAGER DID NOT NOTICE THAT THE ADDRESS OF RECORDWAS THE REPRESENTATIVE'S OFFICE ADDRESS. BY VIRTUE OF THECHANGE OF BROKER-DEALER FORM SHOWING THE REPRESENTATIVE'SBUSINESS ADDRESS AS THE ADDRESS OF RECORD, THE DISBURSEMENTCHECKS FOR THE REDEMPTION REQUESTS WERE SENT BY THE MUTUALFUND SPONSOR TO THE REPRESENTATIVE'S OFFICE ADDRESS. BECAUSETHE CHECKS WERE RECEIVED AT THE REPRESENTATIVE'S OFFICE, THEFIRM WAS UNAWARE THAT THE CHECKS HAD BEEN RECEIVED BY THEREPRESENTATIVE'S AND, THEREFORE, THEY WERE NOT REVIEWED BYTHE FIRM. PRIOR TO AN ANNUAL AUDIT, THE COMPLIANCE OFFICERSELECTED THE CUSTOMER'S FILE FOR REVIEW. IN HER REVIEW, THECOMPLIANCE OFFICER NOTICED IRREGULARITIES WITH A DOCUMENT INTHE FILE. AFTER FURTHER REVIEW AND INVESTIGATION BY THE FIRM,THE REPRESENTATIVE ADMITTED THAT HE HAD MISAPPROPRIATEDFUNDS FROM THE CUSTOMER'S ACCOUNT. HE WAS DISCHARGED BY THEFIRM, AND IT REIMBURSED THE CUSTOMER THE APPROXIMATELY $122,000IN FUNDS THAT HAD BEEN MISAPPROPRIATED.






www.finra.org/brokercheck User GuidanceFINRA RULE 2010, NASD RULES 2110, 3010: THE FIRM FAILED REASONABLYTO SUPERVISE, A REGISTERED REPRESENTATIVE ASSOCIATED WITH THEFIRM. THE FIRM HAD PLACED THE REGISTERED REPRESENTATIVE ONHEIGHTENED SUPERVISION WHEN HE REGISTERED WITH THE FIRM.DURING THE TIME HE WAS ON HEIGHTENED SUPERVISION, THEREGISTERED REPRESENTATIVE MISAPPROPRIATED APPROXIMATELY$122,000 FROM A CUSTOMER ACCOUNT. THE FIRM FAILED TO CONDUCT AMEANINGFUL REVIEW OF THE REPRESENTATIVE'S ACTIVITIES INCONNECTION WITH THIS CUSTOMER'S ACCOUNT AND, AS A RESULT,FAILED TO REASONABLY SUPERVISE THE REPRESENTATIVE. THEREPRESENTATIVE'S CONDUCT INCLUDED THE PROCESSING OF A CHANGEOF BROKER-DEALER FORM THAT HAD HIS BUSINESS ADDRESS AS THECLIENT ADDRESS OF RECORD, THE ISSUANCE OF MULTIPLE FRAUDULENTREDEMPTION REQUESTS ON BEHALF OF A CUSTOMER, THE RECEIPT OFMULTIPLE DISBURSEMENT CHECKS AT HIS OFFICE, AND THE THEFT BYHIM OF THOSE CHECKS. DESPITE THE NATURE OF THE MISCONDUCT,WHICH OCCURRED OVER A PERIOD OF ALMOST A YEAR, NONE OF THEIMPROPER ACTIVITY IN THE CUSTOMER'S ACCOUNT WAS ADEQUATELYREVIEWED BY, OR DETECTED BY, THE FIRM. THE FIRM DID NOT REVIEWTHE ADDRESS ON THE BROKER-DEALER CHANGE FORM AND DURINGTHAT PERIOD HAD NO SYSTEM FOR DETECTING WHETHER THEADDRESSES LISTED FOR LEVEL 4 ACCOUNTS, SUCH AS THE CUSTOMER'S,WERE THE SAME AS THE ADDRESS FOR A REGISTERED REPRESENTATIVEOR OFFICE OF THE FIRM. THE FIRM ALSO DID NOT INCLUDE THECUSTOMER'S ACCOUNT AS PART OF THE MONITORING OF THEREPRESENTATIVE UNDER HIS HEIGHTENED SUPERVISION BECAUSE ITWAS AN EXISTING ACCOUNT THAT WAS TRANSFERRED FROM HIS PRIORBROKER-DEALER TO THE FIRM. DESPITE THE RAPID DIMINUTION IN THECUSTOMER'S ACCOUNT VALUE, THE FIRM'S SYSTEMS ALLOWED FOR THEREDEMPTION REQUESTS TO BE APPROVED WITHOUT INDIVIDUALIZEDREVIEW. AS A RESULT, THE FIRM DID NOT ADEQUATELY REVIEW THEACTIVITIES IN THE ACCOUNT THAT RESULTED IN THE DIMINUTION OF THEVALUE OF THE ACCOUNT FOR ALMOST A YEAR. THE FIRM'S PROCESSINGOF THE BROKER-DEALER CHANGE FORM, THE CUSTOMER'S ACCOUNTSTATEMENTS AND FUND DISBURSEMENT CHECKS WERE SENT DIRECTLYTO THE REPRESENTATIVE'S OFFICE AND NOT TO THE CUSTOMER. THESUITABILITY SYSTEM FLAGGED THE ACCOUNT FOR FURTHER REVIEW BYTHE REPRESENTATIVE'S CONTROLS MANAGER. THE CONTROLSMANAGER DETERMINED THAT THE INVESTMENT ALLOCATION WASSUITABLE AND APPROVED THE ACCOUNT. DURING HIS REVIEW, THECONTROLS MANAGER DID NOT NOTICE THAT THE ADDRESS OF RECORDWAS THE REPRESENTATIVE'S OFFICE ADDRESS. BY VIRTUE OF THECHANGE OF BROKER-DEALER FORM SHOWING THE REPRESENTATIVE'SBUSINESS ADDRESS AS THE ADDRESS OF RECORD, THE DISBURSEMENTCHECKS FOR THE REDEMPTION REQUESTS WERE SENT BY THE MUTUALFUND SPONSOR TO THE REPRESENTATIVE'S OFFICE ADDRESS. BECAUSETHE CHECKS WERE RECEIVED AT THE REPRESENTATIVE'S OFFICE, THEFIRM WAS UNAWARE THAT THE CHECKS HAD BEEN RECEIVED BY THEREPRESENTATIVE'S AND, THEREFORE, THEY WERE NOT REVIEWED BYTHE FIRM. PRIOR TO AN ANNUAL AUDIT, THE COMPLIANCE OFFICERSELECTED THE CUSTOMER'S FILE FOR REVIEW. IN HER REVIEW, THECOMPLIANCE OFFICER NOTICED IRREGULARITIES WITH A DOCUMENT INTHE FILE. AFTER FURTHER REVIEW AND INVESTIGATION BY THE FIRM,THE REPRESENTATIVE ADMITTED THAT HE HAD MISAPPROPRIATEDFUNDS FROM THE CUSTOMER'S ACCOUNT. HE WAS DISCHARGED BY THEFIRM, AND IT REIMBURSED THE CUSTOMER THE APPROXIMATELY $122,000IN FUNDS THAT HAD BEEN MISAPPROPRIATED.






Initiated By: FINRA


Other






FINRA RULE 2010, NASD RULES 2110, 3010: THE FIRM FAILED REASONABLYTO SUPERVISE, A REGISTERED REPRESENTATIVE ASSOCIATED WITH THEFIRM. THE FIRM HAD PLACED THE REGISTERED REPRESENTATIVE ONHEIGHTENED SUPERVISION WHEN HE REGISTERED WITH THE FIRM.DURING THE TIME HE WAS ON HEIGHTENED SUPERVISION, THEREGISTERED REPRESENTATIVE MISAPPROPRIATED APPROXIMATELY$122,000 FROM A CUSTOMER ACCOUNT. THE FIRM FAILED TO CONDUCT AMEANINGFUL REVIEW OF THE REPRESENTATIVE'S ACTIVITIES INCONNECTION WITH THIS CUSTOMER'S ACCOUNT AND, AS A RESULT,FAILED TO REASONABLY SUPERVISE THE REPRESENTATIVE. THEREPRESENTATIVE'S CONDUCT INCLUDED THE PROCESSING OF A CHANGEOF BROKER-DEALER FORM THAT HAD HIS BUSINESS ADDRESS AS THECLIENT ADDRESS OF RECORD, THE ISSUANCE OF MULTIPLE FRAUDULENTREDEMPTION REQUESTS ON BEHALF OF A CUSTOMER, THE RECEIPT OFMULTIPLE DISBURSEMENT CHECKS AT HIS OFFICE, AND THE THEFT BYHIM OF THOSE CHECKS. DESPITE THE NATURE OF THE MISCONDUCT,WHICH OCCURRED OVER A PERIOD OF ALMOST A YEAR, NONE OF THEIMPROPER ACTIVITY IN THE CUSTOMER'S ACCOUNT WAS ADEQUATELYREVIEWED BY, OR DETECTED BY, THE FIRM. THE FIRM DID NOT REVIEWTHE ADDRESS ON THE BROKER-DEALER CHANGE FORM AND DURINGTHAT PERIOD HAD NO SYSTEM FOR DETECTING WHETHER THEADDRESSES LISTED FOR LEVEL 4 ACCOUNTS, SUCH AS THE CUSTOMER'S,WERE THE SAME AS THE ADDRESS FOR A REGISTERED REPRESENTATIVEOR OFFICE OF THE FIRM. THE FIRM ALSO DID NOT INCLUDE THECUSTOMER'S ACCOUNT AS PART OF THE MONITORING OF THEREPRESENTATIVE UNDER HIS HEIGHTENED SUPERVISION BECAUSE ITWAS AN EXISTING ACCOUNT THAT WAS TRANSFERRED FROM HIS PRIORBROKER-DEALER TO THE FIRM. DESPITE THE RAPID DIMINUTION IN THECUSTOMER'S ACCOUNT VALUE, THE FIRM'S SYSTEMS ALLOWED FOR THEREDEMPTION REQUESTS TO BE APPROVED WITHOUT INDIVIDUALIZEDREVIEW. AS A RESULT, THE FIRM DID NOT ADEQUATELY REVIEW THEACTIVITIES IN THE ACCOUNT THAT RESULTED IN THE DIMINUTION OF THEVALUE OF THE ACCOUNT FOR ALMOST A YEAR. THE FIRM'S PROCESSINGOF THE BROKER-DEALER CHANGE FORM, THE CUSTOMER'S ACCOUNTSTATEMENTS AND FUND DISBURSEMENT CHECKS WERE SENT DIRECTLYTO THE REPRESENTATIVE'S OFFICE AND NOT TO THE CUSTOMER. THESUITABILITY SYSTEM FLAGGED THE ACCOUNT FOR FURTHER REVIEW BYTHE REPRESENTATIVE'S CONTROLS MANAGER. THE CONTROLSMANAGER DETERMINED THAT THE INVESTMENT ALLOCATION WASSUITABLE AND APPROVED THE ACCOUNT. DURING HIS REVIEW, THECONTROLS MANAGER DID NOT NOTICE THAT THE ADDRESS OF RECORDWAS THE REPRESENTATIVE'S OFFICE ADDRESS. BY VIRTUE OF THECHANGE OF BROKER-DEALER FORM SHOWING THE REPRESENTATIVE'SBUSINESS ADDRESS AS THE ADDRESS OF RECORD, THE DISBURSEMENTCHECKS FOR THE REDEMPTION REQUESTS WERE SENT BY THE MUTUALFUND SPONSOR TO THE REPRESENTATIVE'S OFFICE ADDRESS. BECAUSETHE CHECKS WERE RECEIVED AT THE REPRESENTATIVE'S OFFICE, THEFIRM WAS UNAWARE THAT THE CHECKS HAD BEEN RECEIVED BY THEREPRESENTATIVE'S AND, THEREFORE, THEY WERE NOT REVIEWED BYTHE FIRM. PRIOR TO AN ANNUAL AUDIT, THE COMPLIANCE OFFICERSELECTED THE CUSTOMER'S FILE FOR REVIEW. IN HER REVIEW, THECOMPLIANCE OFFICER NOTICED IRREGULARITIES WITH A DOCUMENT INTHE FILE. AFTER FURTHER REVIEW AND INVESTIGATION BY THE FIRM,THE REPRESENTATIVE ADMITTED THAT HE HAD MISAPPROPRIATEDFUNDS FROM THE CUSTOMER'S ACCOUNT. HE WAS DISCHARGED BY THEFIRM, AND IT REIMBURSED THE CUSTOMER THE APPROXIMATELY $122,000IN FUNDS THAT HAD BEEN MISAPPROPRIATED.


Resolution:


Sanction Details: WITHOUT ADMITTING OR DENYING THE FINDINGS, THE FIRM CONSENTEDTO THE DESCRIBED SANCTIONS AND TO THE ENTRY OF FINDINGS,THEREFORE THE FIRM IS CENSURED AND FINED $50,000.

FINE PAID IN FULL APRIL 11, 2012.


No




Allegations: NASD RULE 3010 AND 2110 AND FINRA RULE 2010. FINRA ALLEGED THEFIRM FAILED TO REASONABLY SUPERVISE FORMER REGISTEREDREPRESENTATIVE, THOMAS KINSER. KINSER WAS ASSOCIATED WITH THEFIRM FROM AUGUST 2007 THROUGH MARCH 2009 WHEN HEMISAPPROPRIATED $122,000 FROM ONE CLIENT'S LEVEL 4 MUTUAL FUNDACCOUNT.








Initiated By: FINRA


Censure


$50,000





Allegations: NASD RULE 3010 AND 2110 AND FINRA RULE 2010. FINRA ALLEGED THEFIRM FAILED TO REASONABLY SUPERVISE FORMER REGISTEREDREPRESENTATIVE, THOMAS KINSER. KINSER WAS ASSOCIATED WITH THEFIRM FROM AUGUST 2007 THROUGH MARCH 2009 WHEN HEMISAPPROPRIATED $122,000 FROM ONE CLIENT'S LEVEL 4 MUTUAL FUNDACCOUNT.


Resolution:


Sanction Details: $50,000 FINE WHICH WAS PAID APRIL 5, 2012.

Firm Statement WITHOUT ADMITTING OR DENYING THE ALLEGATIONS, THE FIRMCONSENTED TO THE DESCRIBED SANCTIONS AND ENTRY OF FINDINGSAND WAS THUS CENSURED AND FINED $50,000.



Disclosure 8 of 25

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Allegations: NASD RULES 2110, 3010: THE FIRM FAILED TO SUPERVISE REASONABLY AFORMER REGISTERED REPRESENTATIVE AND FAILED TO INVESTIGATEADEQUATELY RED FLAGS CONCERNING THE FORMER REGISTEREDREPRESENTATIVE'S MISCONDUCT. WHEN THE REPRESENTATIVE BECAMEASSOCIATED WITH THE FIRM IN AUGUST 2007, HE HAD BEEN THESUBJECT OF FOUR CUSTOMER COMPLAINTS, INCLUDING THREEARBITRATIONS, CONCERNING HIS BUSINESS PRACTICES AT PRIOREMPLOYERS. ADDITIONALLY, WHEN HE APPLIED TO THE FIRM, THE FIRMWAS AWARE THAT HE WAS EXPERIENCING FINANCIAL DIFFICULTIES.DESPITE THE COMPLIANCE RISK POSED BY THE REPRESENTATIVE, THEFIRM FAILED TO SUPERVISE HIM IN A REASONABLE MANNER AND FAILEDTO RESPOND ADEQUATELY TO RED FLAGS CONCERNING HISFRAUDULENT SCHEME TO MISAPPROPRIATE CUSTOMER FUNDS. IN APRIL2008, DURING AN ANNUAL AUDIT OF THE REPRESENTATIVE, THE FIRMREVIEWED HIS COMPUTER AND DISCOVERED AN EXCEL SPREADSHEET.THE SPREADSHEET REFLECTED A PAYMENT SCHEDULE FOR EIGHTINDIVIDUALS WHO THE REPRESENTATIVE HAD INDUCED TO PARTICIPATEIN HIS FRAUDULENT SCHEME. THE SPREADSHEET WAS MARKED WITHTHE REPRESENTATIVE'S NAME AND LISTED HIS HOME ADDRESS. TITLEDSTATEMENT OF ACCOUNTS WITH CLIENTS, THE SPREADSHEET LISTEDTHE NAMES OF INVESTORS IN HIS FICTITIOUS INVESTMENT. THESPREADSHEET ALSO SHOWED THE TOTAL AMOUNT INVESTED ($323,000),THE INITIAL AMOUNTS INVESTED BY EACH INDIVIDUAL AND THE SPECIFICINDIVIDUAL AMOUNTS DUE IN APRIL 2008. UPON DISCOVERING THISDOCUMENT, THE EXAMINER WHO CONDUCTED THE AUDIT BECAMESUSPICIOUS AND ASKED THE REPRESENTATIVE TO EXPLAIN IT. INPERSON AND LATER IN AN EMAIL, THE REPRESENTATIVE PROVIDEDUNLIKELY EXPLANATIONS FOR THE SPREADSHEET. HE EXPLAINED THAT AFRIEND AND POTENTIAL CLIENT PLANNED TO START A BUSINESS ANDNEEDED ADVICE ON HOW TO MANAGE BUSINESS FINANCES. ACCORDINGTO THE REPRESENTATIVE, HE USED THE SPREADSHEET TO SHOW HISFRIEND HOW TO KEEP TRACK OF ASSETS AND LIABILITIES. IN HIS EMAILABOUT THE SPREADSHEET, THE REPRESENTATIVE FALSELY EXPLAINEDTHAT HE USED HIS NAME INSTEAD OF HIS FRIEND'S COMPANY NAME, ANDNAMES OF INDIVIDUALS, INSTEAD OF VENDORS OF HIS FRIEND'SCOMPANY, SO THAT THE REPRESENTATIVE WOULD NOT BE LIABLE FORANY PLANS THAT HIS FRIEND PUT TOGETHER ON HIS OWN OR ANYMISTAKES HE MADE WHILE INPUTTING HIS INFORMATION. THEREPRESENTATIVE ALSO EXPLAINED THAT HIS FRIEND PROVIDED THEINDIVIDUAL NAMES WHICH APPEARED ON THE SPREADSHEET, EVENTHOUGH ONE OF THE NAMED INDIVIDUALS WAS A CLIENT OF HIS.DESPITE THESE STATEMENTS, THE FIRM ACCEPTED THEREPRESENTATIVE'S EXPLANATION WITHOUT ADEQUATE FURTHERREVIEW.








Initiated By: FINRA


Other


N/A





NASD RULES 2110, 3010: THE FIRM FAILED TO SUPERVISE REASONABLY AFORMER REGISTERED REPRESENTATIVE AND FAILED TO INVESTIGATEADEQUATELY RED FLAGS CONCERNING THE FORMER REGISTEREDREPRESENTATIVE'S MISCONDUCT. WHEN THE REPRESENTATIVE BECAMEASSOCIATED WITH THE FIRM IN AUGUST 2007, HE HAD BEEN THESUBJECT OF FOUR CUSTOMER COMPLAINTS, INCLUDING THREEARBITRATIONS, CONCERNING HIS BUSINESS PRACTICES AT PRIOREMPLOYERS. ADDITIONALLY, WHEN HE APPLIED TO THE FIRM, THE FIRMWAS AWARE THAT HE WAS EXPERIENCING FINANCIAL DIFFICULTIES.DESPITE THE COMPLIANCE RISK POSED BY THE REPRESENTATIVE, THEFIRM FAILED TO SUPERVISE HIM IN A REASONABLE MANNER AND FAILEDTO RESPOND ADEQUATELY TO RED FLAGS CONCERNING HISFRAUDULENT SCHEME TO MISAPPROPRIATE CUSTOMER FUNDS. IN APRIL2008, DURING AN ANNUAL AUDIT OF THE REPRESENTATIVE, THE FIRMREVIEWED HIS COMPUTER AND DISCOVERED AN EXCEL SPREADSHEET.THE SPREADSHEET REFLECTED A PAYMENT SCHEDULE FOR EIGHTINDIVIDUALS WHO THE REPRESENTATIVE HAD INDUCED TO PARTICIPATEIN HIS FRAUDULENT SCHEME. THE SPREADSHEET WAS MARKED WITHTHE REPRESENTATIVE'S NAME AND LISTED HIS HOME ADDRESS. TITLEDSTATEMENT OF ACCOUNTS WITH CLIENTS, THE SPREADSHEET LISTEDTHE NAMES OF INVESTORS IN HIS FICTITIOUS INVESTMENT. THESPREADSHEET ALSO SHOWED THE TOTAL AMOUNT INVESTED ($323,000),THE INITIAL AMOUNTS INVESTED BY EACH INDIVIDUAL AND THE SPECIFICINDIVIDUAL AMOUNTS DUE IN APRIL 2008. UPON DISCOVERING THISDOCUMENT, THE EXAMINER WHO CONDUCTED THE AUDIT BECAMESUSPICIOUS AND ASKED THE REPRESENTATIVE TO EXPLAIN IT. INPERSON AND LATER IN AN EMAIL, THE REPRESENTATIVE PROVIDEDUNLIKELY EXPLANATIONS FOR THE SPREADSHEET. HE EXPLAINED THAT AFRIEND AND POTENTIAL CLIENT PLANNED TO START A BUSINESS ANDNEEDED ADVICE ON HOW TO MANAGE BUSINESS FINANCES. ACCORDINGTO THE REPRESENTATIVE, HE USED THE SPREADSHEET TO SHOW HISFRIEND HOW TO KEEP TRACK OF ASSETS AND LIABILITIES. IN HIS EMAILABOUT THE SPREADSHEET, THE REPRESENTATIVE FALSELY EXPLAINEDTHAT HE USED HIS NAME INSTEAD OF HIS FRIEND'S COMPANY NAME, ANDNAMES OF INDIVIDUALS, INSTEAD OF VENDORS OF HIS FRIEND'SCOMPANY, SO THAT THE REPRESENTATIVE WOULD NOT BE LIABLE FORANY PLANS THAT HIS FRIEND PUT TOGETHER ON HIS OWN OR ANYMISTAKES HE MADE WHILE INPUTTING HIS INFORMATION. THEREPRESENTATIVE ALSO EXPLAINED THAT HIS FRIEND PROVIDED THEINDIVIDUAL NAMES WHICH APPEARED ON THE SPREADSHEET, EVENTHOUGH ONE OF THE NAMED INDIVIDUALS WAS A CLIENT OF HIS.DESPITE THESE STATEMENTS, THE FIRM ACCEPTED THEREPRESENTATIVE'S EXPLANATION WITHOUT ADEQUATE FURTHERREVIEW.








N/A


Resolution:


Sanction Details: WITHOUT ADMITTING OR DENYING THE FINDINGS, THE FIRM CONSENTEDTO THE DESCRIBED SANCTIONS AND TO THE ENTRY OF FINDINGS,THEREFORE THE FIRM IS CENSURED AND FINED $100,000. THE FIRMUNDERSTANDS THAT THIS SETTLEMENT INCLUDES A FINDING THAT ITFAILED TO SUPERVISE AN INDIVIDUAL WHO VIOLATED SECTION 10(B) OFTHE SECURITIES EXCHANGE ACT OF 1934 (THE "ACT") AND SEC RULE 10B-5 AND THAT UNDER SECTION 3(A)(39)(F) OF THE ACT, INCORPORATINGSECTION 15(B)(4)(E) OF THE ACT, AND UNDER ARTICLE III, SECTION 4 OFFINRA'S BY-LAWS, THIS FINDING SUBJECTS THE FIRM TO A STATUTORYDISQUALIFICATION WITH RESPECT TO MEMBERSHIP. FINE PAID IN FULL ONMARCH 28, 2012.


No




Initiated By: FINRA



Allegations: FINRA RULES 3010 AND 2110-- FINRA ALLEGED THAT RESPONDENT FAILEDTO REASONABLY SUPERVISE THE ACTIVITY OF FORMER REGISTEREDREPRESENTATIVE KENNETH NEELY AND FAILED TO ADEQUATELYINVESTIGATE RED FLAGS DISCOVERED DURING AN ANNUAL AUDIT. NEELY,WHO WAS ASSOCIATED WITH THE FIRM FROM AUGUST 2007 UNTIL JULY2009, INDUCED INDIVIDUALS TO INVEST IN A FICTITIOUS REIT AND IN APRIL2008 THE FIRM DISCOVERED A SUSPICIOUS DOCUMENT DURINGANANNUAL AUDIT AND DID NOT ADEQUATELY INVESTIGATE THE REDFLAG.









Censure


$100,000





Resolution:


Sanction Details: WITHOUT ADMITTING OR DENYING THE FINDINGS, THE FIRM CONSENTEDTO THE DESCRIBED SANCTIONS AND TO THE ENTRY OF FINDINGS,THEREFORE THE FIRM WAS CENSURED AND FINED $100,000. THE FIRMUNDERSTANDS THAT THIS SETTLEMENT INCLUDES A FINDING THAT ITFAILED TO SUPERVISE AN INDIVIDUAL WHO VIOLATED SECTION 10(B) OFTHE SECURITIES EXCHANGE ACT OF 1934 (THE "ACT") AND SEC RULE 10B-5 AND THAT THIS FINDING SUBJECTS THE FIRM TO A STATUTORYDISQUALIFICATION WITH RESPECT TO MEMBERSHIP UNDER SECTION3(A)(39)(F) OF THE ACT, INCORPORATING SECTION 15(B)(4)(E) OF THE ACT,AND UNDER ARTICLE III, SECTION 4 OF FINRA'S BY-LAWS.

Firm Statement WITHOUT ADMITTING OR DENYING THE ALLEGATIONS, THE FIRMCONSENTED TO THE DESCRIBED SANCTION AND TO THE ENTRY OFFINDINGS, THEREFORE THE FIRM WAS CENSURED AND FINED $100,000.



Disclosure 9 of 25

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Allegations: SEC ADMIN RELEASE 34-66206, JANUARY 20, 2012: THE SECURITIES ANDEXCHANGE COMMISSION ("COMMISSION") DEEMED IT APPROPRIATE ANDIN THE PUBLIC INTEREST THAT PUBLIC ADMINISTRATIVE PROCEEDINGSBE INSTITUTED PURSUANT TO SECTION 15(B)(4) OF THE SECURITIESEXCHANGE ACT OF 1934 ("EXCHANGE ACT") AGAINST AXA ADVISORS, LLC("AXA ADVISORS" OR "RESPONDENT").

THE COMMISSION FOUND THAT RESPONDENT FAILED REASONABLY TOSUPERVISE A REGISTERED REPRESENTATIVE ("RR") WITH A VIEW TOPREVENTING AND DETECTING HIS VIOLATIONS OF THE FEDERALSECURITIES LAWS DURING THE PERIOD DECEMBER 2005 THROUGHDECEMBER 2008. DURING THIS TIME PERIOD, THE RR FRAUDULENTLYINDUCED CUSTOMERS TO REDEEM SECURITIES HELD AT AXA ADVISORS,INCLUDING VARIABLE ANNUITIES AND MUTUAL FUNDS, UNDER THE FALSEREPRESENTATION THAT THE PROCEEDS FROM SUCH REDEMPTIONSWOULD BE INVESTED IN OTHER SECURITIES THROUGH AXA ADVISORS.INSTEAD, RR CAUSED CUSTOMERS TO PLACE THOSE FUNDS IN A BANKACCOUNT CONTROLLED BY RR, FROM WHICH HE MISAPPROPRIATED THEFUNDS.

RR FRAUDULENTLY INDUCED INVESTORS, WHO WERE CUSTOMERS FORWHOM HE ACTED AS REGISTERED REPRESENTATIVE, TO REDEEMSECURITIES, INCLUDING VARIABLE ANNUITIES AND, TO A MUCH LESSEREXTENT, MUTUAL FUNDS, UNDER THE FALSE REPRESENTATION THAT HEWOULD INVEST THE PROCEEDS FOR THEM IN OTHER SECURITIESPRODUCTS. BASED ON THESE REPRESENTATIONS, CUSTOMERSAUTHORIZED THE REDEMPTIONS OF VARIABLE ANNUITY AND THEPROCEEDS WERE SENT TO THEM AT THEIR HOME ADDRESS OR WIREDDIRECTLY INTO THEIR PERSONAL BANK ACCOUNTS. RR THENMISAPPROPRIATED THE PROCEEDS BY CAUSING THE CUSTOMERSEITHER TO WRITE CHECKS PAYABLE TO "COMPANY NAME" THAT RRDEPOSITED INTO AN ACCOUNT AT A LOCAL BANK THAT RR CONTROLLEDFOR HIS PERSONAL BENEFIT, OR TO WIRE FUNDS DIRECTLY INTO THATACCOUNT. RR GAVE HIS PERSONAL ACCOUNT THE NAME "RR - COMPANYNAME," A NAME SIMILAR TO AN AXA ADVISORS AFFILIATE, WHICH ENABLEDHIM TO DEPOSIT CHECKS THAT APPEARED TO BE MADE OUT TOLEGITIMATE AXA ADVISORS ENTITIES AND FURTHER MISLED CUSTOMERSINTO BELIEVING THAT THEIR FUNDS WERE BEING INVESTED IN AXAADVISORS SECURITIES. ALTOGETHER, RR FRAUDULENTLYMISAPPROPRIATED APPROXIMATELY $1.2 MILLION FROM SEVENCUSTOMERS (THREE INDIVIDUALS AND TWO COUPLES) INAPPROXIMATELY 32 TRANSACTIONS. BY VIRTUE OF SUCH CONDUCT, RRVIOLATED SECTION 10(B) OF THE EXCHANGE ACT AND RULE 10B-5THEREUNDER. DURING MUCH OF THE TIME THAT RR DEFRAUDED HISCUSTOMERS, HE WAS EITHER CERTIFIED AS DISABLED BYRESPONDENT'S DISABILITY INSURANCE CARRIER OR WAS APPEALINGDENIAL OF DISABILITY CERTIFICATION.

RESPONDENT FAILED TO IMPLEMENT ADEQUATE PROCEDURESREGARDING THE REVIEW OF REDEMPTIONS BY CUSTOMERS OFVARIABLE ANNUITIES. DURING THE RELEVANT PERIOD, RESPONDENT HADPROCEDURES IN PLACE REQUIRING SUPERVISORY REVIEW OFSECURITIES TRANSACTIONS BUT DID NOT HAVE IN PLACE ADEQUATEPROCEDURES FOR THE REVIEW OF REDEMPTIONS OF VARIABLEANNUITIES WHICH OCCURRED IN THE ACCOUNTS OF RR'S CUSTOMERS.RR HAD CUSTOMERS PARTIALLY REDEEM THEIR VARIABLE ANNUITIESAND THEN REINVEST THE FUNDS IN HIS "RR - COMPANY NAME" PERSONALACCOUNT. HAD RESPONDENT IMPLEMENTED ADEQUATE PROCEDURESFOR SUPERVISORY REVIEW OF REDEMPTIONS FROM THE VARIABLEANNUITIES OF RR'S CUSTOMERS, RR'S CONDUCT LIKELY WOULD HAVEBEEN DETECTED AND PREVENTED.

RESPONDENT FAILED TO ESTABLISH REASONABLE PROCEDURES TOSUPERVISE REGISTERED REPRESENTATIVES WHO WERE ON LEAVE FORAN EXTENDED PERIOD OF TIME, INCLUDING ABSENCES DUE TODISABILITY, WITH RESPECT TO THE REGISTERED REPRESENTATIVES'SERVICING OF CUSTOMER ACCOUNTS. FROM APPROXIMATELYNOVEMBER 2006 THROUGH JANUARY 2007 AND FEBRUARY 2007THROUGH JUNE 2007, RR WAS CERTIFIED AS DISABLED BYRESPONDENT'S DISABILITY INSURANCE CARRIER AND WAS RECEIVINGBENEFITS UNDER RESPONDENT'S SHORT TERM DISABILITY PROGRAM.ALTHOUGH RR WAS CONSIDERED BY THE DISABILITY CARRIER AS NOLONGER ELIGIBLE TO RECEIVE BENEFITS AS OF JUNE 2007, RRCONTINUED TO ADVISE RESPONDENT THAT HE WAS NOT WELL ANDCONTINUED TO TAKE EXTENDED PERIODS OF LEAVE. (CONTINUED INCOMMENT)








SEC ADMIN RELEASE 34-66206, JANUARY 20, 2012: THE SECURITIES ANDEXCHANGE COMMISSION ("COMMISSION") DEEMED IT APPROPRIATE ANDIN THE PUBLIC INTEREST THAT PUBLIC ADMINISTRATIVE PROCEEDINGSBE INSTITUTED PURSUANT TO SECTION 15(B)(4) OF THE SECURITIESEXCHANGE ACT OF 1934 ("EXCHANGE ACT") AGAINST AXA ADVISORS, LLC("AXA ADVISORS" OR "RESPONDENT").

















SEC ADMIN RELEASE 34-66206, JANUARY 20, 2012: THE SECURITIES ANDEXCHANGE COMMISSION ("COMMISSION") DEEMED IT APPROPRIATE ANDIN THE PUBLIC INTEREST THAT PUBLIC ADMINISTRATIVE PROCEEDINGSBE INSTITUTED PURSUANT TO SECTION 15(B)(4) OF THE SECURITIESEXCHANGE ACT OF 1934 ("EXCHANGE ACT") AGAINST AXA ADVISORS, LLC("AXA ADVISORS" OR "RESPONDENT").






Resolution:


No

Order






Other Sanctions Ordered: COMPLIANCE WITH UNDERTAKINGS

Sanction Details: IN ANTICIPATION OF THE INSTITUTION OF THE PROCEEDINGS,RESPONDENT SUBMITTED AN OFFER OF SETTLEMENT WHICH THECOMMISSION DETERMINED TO ACCEPT. SOLELY FOR THE PURPOSE OFTHE PROCEEDINGS AND ANY OTHER PROCEEDINGS BROUGHT BY OR ONBEHALF OF THE COMMISSION, OR TO WHICH THE COMMISSION IS APARTY, AND WITHOUT ADMITTING OR DENYING THE FINDINGS, EXCEPT ASTO THE COMMISSION'S JURISDICTION OVER RESPONDENT AND THESUBJECT MATTER OF THE PROCEEDINGS, WHICH ARE ADMITTED,RESPONDENT CONSENTED TO THE ENTRY OF THE ORDER INSTITUTINGADMINISTRATIVE PROCEEDINGS, MAKING FINDINGS, AND IMPOSINGREMEDIAL SANCTIONS PURSUANT TO SECTION 15(B)(4) OF THESECURITIES EXCHANGE ACT OF 1934 ("ORDER").

THE COMMISSION DEEMED IT APPROPRIATE AND IN THE PUBLICINTEREST TO IMPOSE THE SANCTIONS AGREED TO IN RESPONDENT'SOFFER. ACCORDINGLY, IT IS HEREBY ORDERED THAT: PURSUANT TOSECTION 15(B)(4) OF THE EXCHANGE ACT, RESPONDENT IS HEREBYCENSURED; RESPONDENT SHALL, WITHIN TEN DAYS OF THE ENTRY OFTHIS ORDER, PAY A CIVIL MONEY PENALTY IN THE AMOUNT OF $100,000 TOTHE UNITED STATES TREASURY; COMPLY WITH UNDERTAKINGS TOENGAGE AND INDEPENDENT COMPLY CONSULTANT AND IMPLEMENTRECOMMENDED POLICY AND PROCEDURE ENHANCEMENTS.

Regulator Statement (CONTINUED FROM #7) RR APPEALED THE DISABILITY CARRIER'SDETERMINATION AND CONTINUALLY SOUGHT TO HAVE HIS BENEFITSREINSTATED FROM THE SUMMER OF 2007 UNTIL HE WAS TERMINATEDFROM RESPONDENT IN JANUARY 2009. THE DISABILITY CARRIERRETROACTIVELY CERTIFIED RR AS DISABLED AND ELIGIBLE FORBENEFITS FOR THE PERIOD OF APPROXIMATELY FEBRUARY 2008THROUGH FEBRUARY 2010. DURING THE TIME PERIOD THAT RR WASCERTIFIED AS DISABLED AND WHILE HE WAS APPEALING, RESPONDENTASSIGNED FOR SERVICING SOME OF RR'S CUSTOMER ACCOUNTS TOOTHER REGISTERED REPRESENTATIVES WHO WERE SUBJECT TO THEFIRM'S SUPERVISION. HOWEVER, THESE MEASURES WERE NOTSUFFICIENT TO ADEQUATELY SUPERVISE RR WITH RESPECT TO HISSERVICING OF THE REMAINDER OF HIS CUSTOMER ACCOUNTS. RRPERPETRATED HIS FRAUD, IN PART, DURING THIS TIME PERIOD. HADRESPONDENT IMPLEMENTED ADEQUATE PROCEDURES FOR THESUPERVISION OF REGISTERED REPRESENTATIVES ON EXTENDED LEAVE,AS RR WAS FOR HIS DISABILITY, THEN IT IS LIKELY THAT AXA ADVISORSWOULD HAVE PREVENTED AND DETECTED RR'S VIOLATIVE CONDUCT.

UNDER SECTION 15(B)(4)(E) OF THE EXCHANGE ACT, BROKER-DEALERSARE RESPONSIBLE FOR REASONABLY SUPERVISING, WITH A VIEW TOPREVENTING VIOLATIONS OF THE FEDERAL SECURITIES LAWS, PERSONSSUBJECT TO THEIR SUPERVISION. RESPONDENT WAS RESPONSIBLE FORSUPERVISING RR.

BECAUSE RR VIOLATED SECTION 10(B) OF THE EXCHANGE ACT AND RULE10B-5 THEREUNDER AND RESPONDENT FAILED TO ESTABLISH ADEQUATEPROCEDURES THAT WOULD REASONABLY BE EXPECTED TO PREVENTAND DETECT SUCH VIOLATIONS, RESPONDENT FAILED REASONABLY TOSUPERVISE RR FOR PURPOSES OF SECTION 15(B)(4)(E) OF THEEXCHANGE ACT.







(CONTINUED FROM #7) RR APPEALED THE DISABILITY CARRIER'SDETERMINATION AND CONTINUALLY SOUGHT TO HAVE HIS BENEFITSREINSTATED FROM THE SUMMER OF 2007 UNTIL HE WAS TERMINATEDFROM RESPONDENT IN JANUARY 2009. THE DISABILITY CARRIERRETROACTIVELY CERTIFIED RR AS DISABLED AND ELIGIBLE FORBENEFITS FOR THE PERIOD OF APPROXIMATELY FEBRUARY 2008THROUGH FEBRUARY 2010. DURING THE TIME PERIOD THAT RR WASCERTIFIED AS DISABLED AND WHILE HE WAS APPEALING, RESPONDENTASSIGNED FOR SERVICING SOME OF RR'S CUSTOMER ACCOUNTS TOOTHER REGISTERED REPRESENTATIVES WHO WERE SUBJECT TO THEFIRM'S SUPERVISION. HOWEVER, THESE MEASURES WERE NOTSUFFICIENT TO ADEQUATELY SUPERVISE RR WITH RESPECT TO HISSERVICING OF THE REMAINDER OF HIS CUSTOMER ACCOUNTS. RRPERPETRATED HIS FRAUD, IN PART, DURING THIS TIME PERIOD. HADRESPONDENT IMPLEMENTED ADEQUATE PROCEDURES FOR THESUPERVISION OF REGISTERED REPRESENTATIVES ON EXTENDED LEAVE,AS RR WAS FOR HIS DISABILITY, THEN IT IS LIKELY THAT AXA ADVISORSWOULD HAVE PREVENTED AND DETECTED RR'S VIOLATIVE CONDUCT.

UNDER SECTION 15(B)(4)(E) OF THE EXCHANGE ACT, BROKER-DEALERSARE RESPONSIBLE FOR REASONABLY SUPERVISING, WITH A VIEW TOPREVENTING VIOLATIONS OF THE FEDERAL SECURITIES LAWS, PERSONSSUBJECT TO THEIR SUPERVISION. RESPONDENT WAS RESPONSIBLE FORSUPERVISING RR.

BECAUSE RR VIOLATED SECTION 10(B) OF THE EXCHANGE ACT AND RULE10B-5 THEREUNDER AND RESPONDENT FAILED TO ESTABLISH ADEQUATEPROCEDURES THAT WOULD REASONABLY BE EXPECTED TO PREVENTAND DETECT SUCH VIOLATIONS, RESPONDENT FAILED REASONABLY TOSUPERVISE RR FOR PURPOSES OF SECTION 15(B)(4)(E) OF THEEXCHANGE ACT.


Allegations: SEC ADMIN RELEASE 34-66206, JANUARY 20, 2012: THE SECURITIES ANDEXCHANGE COMMISSION ("COMMISSION") DEEMED IT APPROPRIATE ANDIN THE PUBLIC INTEREST THAT PUBLIC ADMINISTRATIVE PROCEEDINGSBE INSTITUTED PURSUANT TO SECTION 15(B)(4) OF THE SECURITIESEXCHANGE ACT OF 1934 ("EXCHANGE ACT") AGAINST AXA ADVISORS, LLC("AXA ADVISORS" OR "RESPONDENT"). THE COMMISSION FOUND THATRESPONDENT FAILED REASONABLY TO SUPERVISE A REGISTEREDREPRESENTATIVE ("RR") WITH A VIEW TO PREVENTING AND DETECTINGHIS VIOLATIONS OF THE FEDERAL SECURITIES LAWS DURING THE PERIODDECEMBER 2005 THROUGH DECEMBER 2008. DURING THIS TIME PERIOD,THE RR FRAUDULENTLY INDUCED CUSTOMERS TO REDEEM SECURITIESHELD AT AXA ADVISORS, INCLUDING VARIABLE ANNUITIES AND MUTUALFUNDS, UNDER THE FALSE REPRESENTATION THAT THE PROCEEDS FROMSUCH REDEMPTIONS WOULD BE INVESTED IN OTHER SECURITIESTHROUGH AXA ADVISORS. INSTEAD, RR CAUSED CUSTOMERS TO PLACETHOSE FUNDS IN A BANK ACCOUNT CONTROLLED BY RR, FROM WHICH HEMISAPPROPRIATED THE FUNDS. RR FRAUDULENTLY INDUCEDINVESTORS, WHO WERE CUSTOMERS FOR WHOM HE ACTED ASREGISTERED REPRESENTATIVE, TO REDEEM SECURITIES, INCLUDINGVARIABLE ANNUITIES AND, TO A MUCH LESSER EXTENT, MUTUAL FUNDS,UNDER THE FALSE REPRESENTATION THAT HE WOULD INVEST THEPROCEEDS FOR THEM IN OTHER SECURITIES PRODUCTS. BASED ONTHESE REPRESENTATIONS, CUSTOMERS AUTHORIZED THEREDEMPTIONS OF VARIABLE ANNUITY AND THE PROCEEDS WERE SENTTO THEM AT THEIR HOME ADDRESS OR WIRED DIRECTLY INTO THEIRPERSONAL BANK ACCOUNTS. RR THEN MISAPPROPRIATED THEPROCEEDS BY CAUSING THE CUSTOMERS EITHER TO WRITE CHECKSPAYABLE TO "COMPANY NAME" THAT RR DEPOSITED INTO AN ACCOUNT ATA LOCAL BANK THAT RR CONTROLLED FOR HIS PERSONAL BENEFIT, ORTO WIRE FUNDS DIRECTLY INTO THAT ACCOUNT. RR GAVE HIS PERSONALACCOUNT THE NAME "RR - COMPANY NAME," A NAME SIMILAR TO AN AXAADVISORS AFFILIATE, WHICH ENABLED HIM TO DEPOSIT CHECKS THATAPPEARED TO BE MADE OUT TO LEGITIMATE AXA ADVISORS ENTITIES ANDFURTHER MISLED CUSTOMERS INTO BELIEVING THAT THEIR FUNDS WEREBEING INVESTED IN AXA ADVISORS SECURITIES. ALTOGETHER, RRFRAUDULENTLY MISAPPROPRIATED APPROXIMATELY $1.2 MILLION FROMSEVEN CUSTOMERS (THREE INDIVIDUALS AND TWO COUPLES) INAPPROXIMATELY 32 TRANSACTIONS. BY VIRTUE OF SUCH CONDUCT, RRVIOLATED SECTION 10(B) OF THE EXCHANGE ACT AND RULE 10B-5THEREUNDER. DURING MUCH OF THE TIME THAT RR DEFRAUDED HISCUSTOMERS, HE WAS EITHER CERTIFIED AS DISABLED BYRESPONDENT'S DISABILITY INSURANCE CARRIER OR WAS APPEALINGDENIAL OF DISABILITY CERTIFICATION. RESPONDENT FAILED TOIMPLEMENT ADEQUATE PROCEDURES REGARDING THE REVIEW OFREDEMPTIONS BY CUSTOMERS OF VARIABLE ANNUITIES. DURING THERELEVANT PERIOD, RESPONDENT HAD PROCEDURES IN PLACEREQUIRING SUPERVISORY REVIEW OF SECURITIES TRANSACTIONS BUTDID NOT HAVE IN PLACE ADEQUATE PROCEDURES FOR THE REVIEW OFREDEMPTIONS OF VARIABLE ANNUITIES WHICH OCCURRED IN THEACCOUNTS OF RR'S CUSTOMERS. RR HAD CUSTOMERS PARTIALLYREDEEM THEIR VARIABLE ANNUITIES AND THEN REINVEST THE FUNDS INHIS "RR - COMPANY NAME" PERSONAL ACCOUNT. HAD RESPONDENTIMPLEMENTED ADEQUATE PROCEDURES FOR SUPERVISORY REVIEW OFREDEMPTIONS FROM THE VARIABLE ANNUITIES OF RR'S CUSTOMERS,RR'S CONDUCT LIKELY WOULD HAVE BEEN DETECTED AND PREVENTED.RESPONDENT FAILED TO ESTABLISH REASONABLE PROCEDURES TOSUPERVISE REGISTERED REPRESENTATIVES WHO WERE ON LEAVE FORAN EXTENDED PERIOD OF TIME, INCLUDING ABSENCES DUE TODISABILITY, WITH RESPECT TO THE REGISTERED REPRESENTATIVES'SERVICING OF CUSTOMER ACCOUNTS. FROM APPROXIMATELYNOVEMBER 2006 THROUGH JANUARY 2007 AND FEBRUARY 2007THROUGH JUNE 2007, RR WAS CERTIFIED AS DISABLED BYRESPONDENT'S DISABILITY INSURANCE CARRIER AND WAS RECEIVINGBENEFITS UNDER RESPONDENT'S SHORT TERM DISABILITY PROGRAM.ALTHOUGH RR WAS CONSIDERED BY THE DIABILITY CARRIER AS NOLONGER ELIGIBLE TO RECEIVE BENEFITS AS OF JUNE 2007, RRCONTINUED TO ADVISE RESPONDENT TAHT HE WAS NOT WELL ANDCONTINUED TO TAKE EXTENDED PERIODS OF LEAVE.











SEC ADMIN RELEASE 34-66206, JANUARY 20, 2012: THE SECURITIES ANDEXCHANGE COMMISSION ("COMMISSION") DEEMED IT APPROPRIATE ANDIN THE PUBLIC INTEREST THAT PUBLIC ADMINISTRATIVE PROCEEDINGSBE INSTITUTED PURSUANT TO SECTION 15(B)(4) OF THE SECURITIESEXCHANGE ACT OF 1934 ("EXCHANGE ACT") AGAINST AXA ADVISORS, LLC("AXA ADVISORS" OR "RESPONDENT"). THE COMMISSION FOUND THATRESPONDENT FAILED REASONABLY TO SUPERVISE A REGISTEREDREPRESENTATIVE ("RR") WITH A VIEW TO PREVENTING AND DETECTINGHIS VIOLATIONS OF THE FEDERAL SECURITIES LAWS DURING THE PERIODDECEMBER 2005 THROUGH DECEMBER 2008. DURING THIS TIME PERIOD,THE RR FRAUDULENTLY INDUCED CUSTOMERS TO REDEEM SECURITIESHELD AT AXA ADVISORS, INCLUDING VARIABLE ANNUITIES AND MUTUALFUNDS, UNDER THE FALSE REPRESENTATION THAT THE PROCEEDS FROMSUCH REDEMPTIONS WOULD BE INVESTED IN OTHER SECURITIESTHROUGH AXA ADVISORS. INSTEAD, RR CAUSED CUSTOMERS TO PLACETHOSE FUNDS IN A BANK ACCOUNT CONTROLLED BY RR, FROM WHICH HEMISAPPROPRIATED THE FUNDS. RR FRAUDULENTLY INDUCEDINVESTORS, WHO WERE CUSTOMERS FOR WHOM HE ACTED ASREGISTERED REPRESENTATIVE, TO REDEEM SECURITIES, INCLUDINGVARIABLE ANNUITIES AND, TO A MUCH LESSER EXTENT, MUTUAL FUNDS,UNDER THE FALSE REPRESENTATION THAT HE WOULD INVEST THEPROCEEDS FOR THEM IN OTHER SECURITIES PRODUCTS. BASED ONTHESE REPRESENTATIONS, CUSTOMERS AUTHORIZED THEREDEMPTIONS OF VARIABLE ANNUITY AND THE PROCEEDS WERE SENTTO THEM AT THEIR HOME ADDRESS OR WIRED DIRECTLY INTO THEIRPERSONAL BANK ACCOUNTS. RR THEN MISAPPROPRIATED THEPROCEEDS BY CAUSING THE CUSTOMERS EITHER TO WRITE CHECKSPAYABLE TO "COMPANY NAME" THAT RR DEPOSITED INTO AN ACCOUNT ATA LOCAL BANK THAT RR CONTROLLED FOR HIS PERSONAL BENEFIT, ORTO WIRE FUNDS DIRECTLY INTO THAT ACCOUNT. RR GAVE HIS PERSONALACCOUNT THE NAME "RR - COMPANY NAME," A NAME SIMILAR TO AN AXAADVISORS AFFILIATE, WHICH ENABLED HIM TO DEPOSIT CHECKS THATAPPEARED TO BE MADE OUT TO LEGITIMATE AXA ADVISORS ENTITIES ANDFURTHER MISLED CUSTOMERS INTO BELIEVING THAT THEIR FUNDS WEREBEING INVESTED IN AXA ADVISORS SECURITIES. ALTOGETHER, RRFRAUDULENTLY MISAPPROPRIATED APPROXIMATELY $1.2 MILLION FROMSEVEN CUSTOMERS (THREE INDIVIDUALS AND TWO COUPLES) INAPPROXIMATELY 32 TRANSACTIONS. BY VIRTUE OF SUCH CONDUCT, RRVIOLATED SECTION 10(B) OF THE EXCHANGE ACT AND RULE 10B-5THEREUNDER. DURING MUCH OF THE TIME THAT RR DEFRAUDED HISCUSTOMERS, HE WAS EITHER CERTIFIED AS DISABLED BYRESPONDENT'S DISABILITY INSURANCE CARRIER OR WAS APPEALINGDENIAL OF DISABILITY CERTIFICATION. RESPONDENT FAILED TOIMPLEMENT ADEQUATE PROCEDURES REGARDING THE REVIEW OFREDEMPTIONS BY CUSTOMERS OF VARIABLE ANNUITIES. DURING THERELEVANT PERIOD, RESPONDENT HAD PROCEDURES IN PLACEREQUIRING SUPERVISORY REVIEW OF SECURITIES TRANSACTIONS BUTDID NOT HAVE IN PLACE ADEQUATE PROCEDURES FOR THE REVIEW OFREDEMPTIONS OF VARIABLE ANNUITIES WHICH OCCURRED IN THEACCOUNTS OF RR'S CUSTOMERS. RR HAD CUSTOMERS PARTIALLYREDEEM THEIR VARIABLE ANNUITIES AND THEN REINVEST THE FUNDS INHIS "RR - COMPANY NAME" PERSONAL ACCOUNT. HAD RESPONDENTIMPLEMENTED ADEQUATE PROCEDURES FOR SUPERVISORY REVIEW OFREDEMPTIONS FROM THE VARIABLE ANNUITIES OF RR'S CUSTOMERS,RR'S CONDUCT LIKELY WOULD HAVE BEEN DETECTED AND PREVENTED.RESPONDENT FAILED TO ESTABLISH REASONABLE PROCEDURES TOSUPERVISE REGISTERED REPRESENTATIVES WHO WERE ON LEAVE FORAN EXTENDED PERIOD OF TIME, INCLUDING ABSENCES DUE TODISABILITY, WITH RESPECT TO THE REGISTERED REPRESENTATIVES'SERVICING OF CUSTOMER ACCOUNTS. FROM APPROXIMATELYNOVEMBER 2006 THROUGH JANUARY 2007 AND FEBRUARY 2007THROUGH JUNE 2007, RR WAS CERTIFIED AS DISABLED BYRESPONDENT'S DISABILITY INSURANCE CARRIER AND WAS RECEIVINGBENEFITS UNDER RESPONDENT'S SHORT TERM DISABILITY PROGRAM.ALTHOUGH RR WAS CONSIDERED BY THE DIABILITY CARRIER AS NOLONGER ELIGIBLE TO RECEIVE BENEFITS AS OF JUNE 2007, RRCONTINUED TO ADVISE RESPONDENT TAHT HE WAS NOT WELL ANDCONTINUED TO TAKE EXTENDED PERIODS OF LEAVE.







Censure


MONETARY FINE: $100,000COMPLIANCE WITH UNDERTAKING




Resolution:


Sanction Details: WITHOUT ADMITTING OR DENYING THE ALLEGATIONS, THE FIRMCONSENTED TO THE SANCTIONS, AS REFLECTED IN AN ORDER OF THECOMMISSION, INCLUDING THE RETENTION OF AN INDEPENDENTCOMPLIANCE CONSULTANT ("ICC"), TO EVALUATE, AND IF APPROPRIATE,RECOMMEND ENHANCEMENTS TO THE FIRM'S SUPERVISORY PRACTICESFOR CIRCUMSTANCES WHERE REGISTERED REPRESENTATIVES ARE ONEXTENDED LEAVE OR RECEIVING DISABILITY BENEFITS.

Firm Statement THE FIRM DELIVERED THE FINE TO THE COMMISSION WITHIN THE TIMEPERIOD REQUIRED BY THE ORDER. THE FIRM IS IN THE PROCESS OFPROVIDING INFORMATION TO THE ICC IN CONNECTION WITH ITS REVIEW.


Settled

Disclosure 10 of 25

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Initiated By: OREGON DIVISION OF FINANCE AND CORPORATE SECURITIES





Docket/Case Number: IT-08-0043-2



Other Product Type(s): FRAUDULENT SECURITIES

Allegations: FAILURE TO ADEQUATELY SUPERVISE SALESPERSON









Resolution:

Other Sanctions Ordered: CEASE AND DESIST

Sanction Details: FAILURE TO ADEQUATELY SUPERVISE SALESPERSON FORMERLYAFFILIATED WITH THE BROKER-DEALTER. CIVIL PENALTY OF $75,000ASSESSED; PAID IN FUL MAY 27, 2011.


Yes


Consent


Initiated By: OREGON DIVISION OF FINANCE AND CORPORATE SECURITIES





Docket/Case Number: IT-08-0043-2


Other Product Type(s): FRAUDULENT SECURITIES

Allegations: FAILURE TO ADEQUATELY SUPERVISE SALESPERSON.



Resolution:

Other Sanctions Ordered: CEASE AND DESIST

Sanction Details: FAILURE TO ADEQUATELY SUPERVISE SALESPERSON FORMERLYAFFILIATED WITH THE FIRM. THE FIRM WAS ASSESSED A CIVIL PENALTYOF $75,000.00 THAT WAS PAID IN FULL ON MAY 27, 2011.


Consent






Sanction Details: FAILURE TO ADEQUATELY SUPERVISE SALESPERSON FORMERLYAFFILIATED WITH THE FIRM. THE FIRM WAS ASSESSED A CIVIL PENALTYOF $75,000.00 THAT WAS PAID IN FULL ON MAY 27, 2011.

Disclosure 11 of 25

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Initiated By: MISSOURI SECURITIES DIVISION


Other


CONSENT


Docket/Case Number: AP-10-24




Allegations: THE ENFORCEMENT SECTION OF THE MISSOURI SECURITIES DIVISIONAHAS ALLEGED THAT AXA ADVISORS, LLC WAS AFFILIATED WITH AMISSOURI-REGISTERED AGENTW HO ENGAGED IN DISHONEST ANDUNETHICAL BUSINESS PRACTICES. RESPONDENT AND ENFORCEMENTSECTION DESIRE TO SETTLE THE ALLEGATIONS AND THE MATTERSRAISED BY THE ENFORCEMENT SECTION RELATING TO THERESPONDENT'S ASSOCATION WITH A REGISTERED AGENT WHO OFFEREDAND SOLD UNREGISTERED SECURITIES AND SOLD SECURITIES THATWERE NOT RECORDED ON RESPONDENT'S BOOKS AND RECORDS.



Resolution:



No

Sanctions Ordered: Monetary/Fine $92,015.41Disgorgement/Restitution

Consent







Sanction Details: IT IS HEREBY ORDERED THAT: RESPONDENT PAY $56,000 IN RESTITUTION,PLUS $7,515.41 IN INTEREST; RESPONDENT PAY $25,000 TO THE MISSOURISECRETARY OF STATE'S INVESTOR EDUCATION AND PROTECTION FUND;RESPONDENT PAY $3,500 AS THE COSTS OF THIS INVESTIGATION; ANDRESPONDENT PAY ITS OWN COSTS AND ATTORNEYS' FEES WITHRESPECT TO THIS MATTER.


Initiated By: MISSOURI SECURITIES DIVISION


Other


CONSENT


Docket/Case Number: AP-10-24



Allegations: THE MISSOURI SECURITIES DIVISION ALLEGED THAT AXA ADVISORS, LLC.(FIRM) WAS AFFILIATED WITH A MISSOURI-REGISTERED INDIVIDUAL AGENTWHO ENGAGED IN DISHONEST AND UNETHICAL BUSINESS PRACTICES BYOFFERING AND SELLING UNREGISTERED SECURITIES AND FAILING TOADVISE THE FIRM ABOUT THESE SALES SO THAT THE FIRM COULDRECORD THE SECURITIES ON ITS BOOKS AND RECORDS.



Resolution:


Sanction Details: THE FIRM WAS FINED TWENTY-FIVE THOUSAND DOLLARS ($25,000) ANDORDERED TO PAY FIFTY-SIX THOUSAND DOLLARS ($56,000) INRESTITUTION, PLUS SEVEN THOUSAND FIVE HUNDRED AND FIFTEENDOLLARS AND FORTY-ONE CENTS ($7,515.41) IN INTEREST. THE FIRMALSO PAID THREE THOUSAND FIVE HUNDRED DOLLARS ($3,500) AS THECOSTS OF THE INVESTIGATION.

Sanctions Ordered: Monetary/Fine $92,015.41Disgorgement/Restitution

Consent





www.finra.org/brokercheck User GuidanceTHE FIRM WAS FINED TWENTY-FIVE THOUSAND DOLLARS ($25,000) ANDORDERED TO PAY FIFTY-SIX THOUSAND DOLLARS ($56,000) INRESTITUTION, PLUS SEVEN THOUSAND FIVE HUNDRED AND FIFTEENDOLLARS AND FORTY-ONE CENTS ($7,515.41) IN INTEREST. THE FIRMALSO PAID THREE THOUSAND FIVE HUNDRED DOLLARS ($3,500) AS THECOSTS OF THE INVESTIGATION.

Disclosure 12 of 25

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Initiated By: FINRA





Principal Product Type: Debt - Municipal

Other Product Type(s): DEBT - CORPORATE

Allegations: RULE 10B-10 OF THE SECURITIES EXCHANGE ACT OF 1934, NASD RULES2110 AND 6230 AND MSRB RULES G-14 AND G-15: RESPONDENT AXAADVISORS, INC. INACCURATELY REPORTED MUNICIPAL SECURITIESTRANSACTIONS TO THE MUNICIPAL SECURITIES RULEMAKING BOARD'S(MSRB) REAL-TIME TRANSACTION REPORTING SYSTEM (RTRS) ANDCORPORATE BOND TRANSACTIONS TO FINRA'S TRADE COMPLIANCEREPORTING ENGINE (TRACE), RESPECTIVELY, BY REPORTINGTRANSACTIONS WITH THE FIRM ACTING IN A PRINCIPAL CAPACITY WHENTHE FIRM ACTUALLY ACTED AS AGENT ON THE TRANSACTIONS. THE FIRMCAUSED INACCURATE AND INCOMPLETE CONFIRMATIONS TO BE SENT TOCUSTOMERS BY INCORRECTLY CONFIRMING THE TRANSACTIONS ASPRINCIPAL TRANSACTIONS WHEN THEY SHOULD HAVE BEEN CONFIRMEDAS AGENCY TRANSACTIONS.



Resolution:


No










Sanction Details: WITHOUT ADMITTING OR DENYING THE FINDINGS, THE FIRM CONSENTEDTO THE DESCRIBED SANCTIONS AND TO THE ENTRY OF FINDINGS;THEREFORE, THE FIRM IS CENSURED AND FINED $20,000.


Initiated By: FINANCIAL INDUSTRY REGULATORY AUTHORITY (FINRA)





Principal Product Type: Debt - Municipal

Other Product Type(s): DEBT - CORPORATE

Allegations: FINRA ALLEGED THAT AXA ADVISORS, LLC. (THE "FIRM") INACCURATELYREPORTED MUNICIPAL SECURITIES TRANSACTIONS TO THE MUNICIPALSECURITIES RULEMAKING BOARD'S (MSRB) REAL-TIME TRANSACTIONREPORTING SYSTEM (RTRS) AND CORPORATE BOND TRANSACTIONS TOFINRA'S TRADE COMPLIANCE REPORTING ENGINE (TRACE),RESPECTIVELY, BY REPORTING TRANSACTIONS WITH THE FIRM ACTING INA PRINCIPAL CAPACITY WHEN THE FIRM ACTUALLY ACTED AS AGENT ONTHE TRANSACTIONS. FINRA FURTHER ALLEGED THAT THE FIRM CAUSEDINACCURATE AND INCOMPLETE CONFIRMATIONS TO BE SENT TOCUSTOMERS BY INCORRECTLY CONFIRMING THE TRANSACTIONS ASPRINCIPAL TRANSACTIONS WHEN THEY SHOULD HAVE BEEN CONFIRMEDAS AGENCY TRANSACTIONS.



Resolution:


Sanction Details: WITHOUT ADMITTING OR DENYING THE FINDINGS, THE FIRM CONSENTEDTO THE DESCRIBED SANCTIONS AND TO THE ENTRY OF FINDINGS;THEREFORE, THE FIRM WAS CENSURED AND FINED $20,000.









WITHOUT ADMITTING OR DENYING THE FINDINGS, THE FIRM CONSENTEDTO THE DESCRIBED SANCTIONS AND TO THE ENTRY OF FINDINGS;THEREFORE, THE FIRM WAS CENSURED AND FINED $20,000.

Disclosure 13 of 25

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Initiated By: FINRA







Allegations: SECTION 17(A) OF THE EXCHANGE ACT OF 1934, SEC RULE 17A-3(A), NASDRULES 2110, 3010, 3110 - AXA ADVISORS, LLC FAILED TO KEEP ACCURATEAND COMPLETE RECORDS RELATING TO ITS DIRECT MUTUAL FUNDBUSINESS; AND FAILED TO HAVE ADEQUATE SYSTEMS, PROCEDURES ANDRELATED WRITTEN PROCEDURES TO REASONABLY SUPERVISE THEMATCHING OF RECORDS FOR ITS DIRECT MUTUAL FUND BUSINESS.



Resolution:




No



iReporting Source: 60©2020 FINRA. All rights reserved. Report about AXA ADVISORS, LLC






Reporting Source: Firm

Initiated By: FINRA







Allegations: FINRA ALLEGED THAT AXA ADVISORS, LLC. (THE "FIRM") FAILED TO KEEPACCURATE AND COMPLETE RECORDS RELATING TO ITS DIRECT MUTUALFUNDS BUSINESS. FINRA FURTHER ALLEGED THAT THE FIRM FAILED TOHAVE ADEQUATE SYSTEMS, PROCEDURES AND RELATED WRITTENPROCEDURES TO REASONABLY SUPERVISE THE MATCHING OF RECORDSFOR ITS DIRECT MUTUAL FUND BUSINESS.



Resolution:


Sanction Details: WITHOUT ADMITTING OR DENYING THE FINDINGS, THE FIRM CONSENTEDTO THE DESCRIBED SANCTIONS AND TO THE ENTRY OF FINDINGS. THEFIRM WAS CENSURED AND FINED $250,000.



Disclosure 14 of 25

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Allegations: SEC ADMINISTRATIVE RELEASE 60480, AUGUST 11, 2009: THE SEC (OR "COMMISSION") DEEMS IT APPROPRIATE AND IN THE PUBLIC INTERESTTHAT PUBLIC ADMINISTRATIVE PROCEEDINGS BE, AND HEREBY ARE,INSTITUTED PURSUANT TO SECTION 15(B)(4) OF THE SECURITIESEXCHANGE ACT OF 1934 AGAINST AXA ADVISORS, LLC FOR FAILINGREASONABLY TO SUPERVISE A REGISTERED REPRESENTATIVE WITH AVIEW TO PREVENTING AND DETECTING HIS VIOLATIONS OF THE FEDERALSECURITIES LAWS DURING THE PERIOD JULY 2004 THROUGH JUNE 2007.THE COMMISSION FOUND THAT DURING AT LEAST THIS TIME PERIOD, THEREGISTERED REPRESENTATIVE FRAUDULENTLY INDUCED INVESTORS,THE MAJORITY OF WHOM WERE CURRENT TEACHERS IN COLORADOPUBLIC SCHOOLS, TO CONSENT TO ROLL OVER THEIR RETIREMENTINVESTMENTS FROM THEIR 401(K) ACCOUNTS INTO EXISTING 403(B)INVESTMENT PRODUCTS OFFERED BY THE AXA ADVISORS. THEREGISTERED REPRESENTATIVE FRAUDULENTLY INDUCED AT LEAST $1.6MILLION WORTH OF DIRECT PARTICIPANT ROLLOVERS INTO AXA'S 403(B)PRODUCTS USING THIS SCHEME. AS A RESULT, THE REGISTEREDREPRESENTATIVE VIOLATED SECTION 10(B) OF THE EXCHANGE ACT ANDRULE 10B-5 THEREUNDER. THE COMMISSION ALSO FOUND THAT AXAFAILED TO ESTABLISH ADEQUATE PROCEDURES RELATING TO ROLLOVERTRANSACTIONS. AXA KNEW THAT THE REGISTERED REPRESENTATIVEWAS ROLLING OVER PARTICIPANTS' 401(K) ACCOUNTS INTO 403(B)ACCOUNTS WITH AXA, TRANSFERRING PARTICIPANTS FROM MUTUALFUND INVESTMENTS INTO ANNUITY INVESTMENTS. THE REGISTEREDREPRESENTATIVE WAS ACTIVELY SOLICITING PARTICIPANTS TOTRANSFER INVESTMENTS RESULTING IN A COMMISSION FOR THEREPRESENTATIVE. AXA HAD INADEQUATE SUPERVISORY PROCEDURES INPLACE TO REVIEW ROLLOVER TRANSACTIONS INTO CUSTOMERS'EXISTING ACCOUNTS BECAUSE SUPERVISORS WERE ONLY REQUIRED TOREVIEW ROLLOVERS INTO NEW ANNUITY ACCOUNTS, NOT EXISTINGANNUITY ACCOUNTS. THE REGISTERED REPRESENTATIVE COMPLETEDFRAUDULENT ROLLOVERS BY EXPLOITING THIS GAP IN AXA'SSUPERVISORY SYSTEM. IF AXA HAD ESTABLISHED A PROCEDURE FORREVIEWING THE REPRESENTATIVE'S ROLLOVER TRANSACTIONS INTOEXISTING ACCOUNTS, THE REPRESENTATIVE'S FRAUD LIKELY WOULDHAVE BEEN DETECTED AND PREVENTED. IN ADDITION, THE COMMISSIONFOUND THAT THE LACK OF PROCEDURES RELATING TO REVIEW OFROLLOVERS LED SUPERVISORS TO MISS INFORMATION THAT COULDHAVE SIGNALED THE REPRESENTATIVE'S VIOLATIONS. DOCUMENTS INTHE CUSTOMER FILES INDICATED THAT THE REPRESENTATIVE WASCOMPLETING ROLLOVERS FOR PARTICIPANTS THAT WERE STILLEMPLOYED BY THEIR RESPECTIVE SCHOOL DISTRICTS AND THUS WEREINELIGIBLE FOR ROLLOVERS UNLESS THEY HAD REACHED THE AGE OF59-1/2. AXA'S LACK OF PROCEDURES FOR REVIEWING ROLLOVERTRANSACTIONS INTO EXISTING ACCOUNTS ALLOWED THESE RED FLAGSAND THE REGISTERED REPRESENTATIVE'S FRAUDULENT ACTIVITY TO GOUNDETECTED. BECAUSE THE REPRESENTATIVE VIOLATED SECTION 10(B)OF THE EXCHANGE ACT AND RULE 10B-5 THEREUNDER AND AXA FAILEDTO ESTABLISH ADEQUATE PROCEDURES THAT WOULD REASONABLY BEEXPECTED TO PREVENT AND DETECT SUCH VIOLATIONS, AXA FAILEDREASONABLY TO SUPERVISE THE REGISTERED REPRESENTATIVE FORPURPOSES OF SECTION 15(B)(4)(E) OF THE EXCHANGE ACT.








SEC ADMINISTRATIVE RELEASE 60480, AUGUST 11, 2009: THE SEC (OR "COMMISSION") DEEMS IT APPROPRIATE AND IN THE PUBLIC INTERESTTHAT PUBLIC ADMINISTRATIVE PROCEEDINGS BE, AND HEREBY ARE,INSTITUTED PURSUANT TO SECTION 15(B)(4) OF THE SECURITIESEXCHANGE ACT OF 1934 AGAINST AXA ADVISORS, LLC FOR FAILINGREASONABLY TO SUPERVISE A REGISTERED REPRESENTATIVE WITH AVIEW TO PREVENTING AND DETECTING HIS VIOLATIONS OF THE FEDERALSECURITIES LAWS DURING THE PERIOD JULY 2004 THROUGH JUNE 2007.THE COMMISSION FOUND THAT DURING AT LEAST THIS TIME PERIOD, THEREGISTERED REPRESENTATIVE FRAUDULENTLY INDUCED INVESTORS,THE MAJORITY OF WHOM WERE CURRENT TEACHERS IN COLORADOPUBLIC SCHOOLS, TO CONSENT TO ROLL OVER THEIR RETIREMENTINVESTMENTS FROM THEIR 401(K) ACCOUNTS INTO EXISTING 403(B)INVESTMENT PRODUCTS OFFERED BY THE AXA ADVISORS. THEREGISTERED REPRESENTATIVE FRAUDULENTLY INDUCED AT LEAST $1.6MILLION WORTH OF DIRECT PARTICIPANT ROLLOVERS INTO AXA'S 403(B)PRODUCTS USING THIS SCHEME. AS A RESULT, THE REGISTEREDREPRESENTATIVE VIOLATED SECTION 10(B) OF THE EXCHANGE ACT ANDRULE 10B-5 THEREUNDER. THE COMMISSION ALSO FOUND THAT AXAFAILED TO ESTABLISH ADEQUATE PROCEDURES RELATING TO ROLLOVERTRANSACTIONS. AXA KNEW THAT THE REGISTERED REPRESENTATIVEWAS ROLLING OVER PARTICIPANTS' 401(K) ACCOUNTS INTO 403(B)ACCOUNTS WITH AXA, TRANSFERRING PARTICIPANTS FROM MUTUALFUND INVESTMENTS INTO ANNUITY INVESTMENTS. THE REGISTEREDREPRESENTATIVE WAS ACTIVELY SOLICITING PARTICIPANTS TOTRANSFER INVESTMENTS RESULTING IN A COMMISSION FOR THEREPRESENTATIVE. AXA HAD INADEQUATE SUPERVISORY PROCEDURES INPLACE TO REVIEW ROLLOVER TRANSACTIONS INTO CUSTOMERS'EXISTING ACCOUNTS BECAUSE SUPERVISORS WERE ONLY REQUIRED TOREVIEW ROLLOVERS INTO NEW ANNUITY ACCOUNTS, NOT EXISTINGANNUITY ACCOUNTS. THE REGISTERED REPRESENTATIVE COMPLETEDFRAUDULENT ROLLOVERS BY EXPLOITING THIS GAP IN AXA'SSUPERVISORY SYSTEM. IF AXA HAD ESTABLISHED A PROCEDURE FORREVIEWING THE REPRESENTATIVE'S ROLLOVER TRANSACTIONS INTOEXISTING ACCOUNTS, THE REPRESENTATIVE'S FRAUD LIKELY WOULDHAVE BEEN DETECTED AND PREVENTED. IN ADDITION, THE COMMISSIONFOUND THAT THE LACK OF PROCEDURES RELATING TO REVIEW OFROLLOVERS LED SUPERVISORS TO MISS INFORMATION THAT COULDHAVE SIGNALED THE REPRESENTATIVE'S VIOLATIONS. DOCUMENTS INTHE CUSTOMER FILES INDICATED THAT THE REPRESENTATIVE WASCOMPLETING ROLLOVERS FOR PARTICIPANTS THAT WERE STILLEMPLOYED BY THEIR RESPECTIVE SCHOOL DISTRICTS AND THUS WEREINELIGIBLE FOR ROLLOVERS UNLESS THEY HAD REACHED THE AGE OF59-1/2. AXA'S LACK OF PROCEDURES FOR REVIEWING ROLLOVERTRANSACTIONS INTO EXISTING ACCOUNTS ALLOWED THESE RED FLAGSAND THE REGISTERED REPRESENTATIVE'S FRAUDULENT ACTIVITY TO GOUNDETECTED. BECAUSE THE REPRESENTATIVE VIOLATED SECTION 10(B)OF THE EXCHANGE ACT AND RULE 10B-5 THEREUNDER AND AXA FAILEDTO ESTABLISH ADEQUATE PROCEDURES THAT WOULD REASONABLY BEEXPECTED TO PREVENT AND DETECT SUCH VIOLATIONS, AXA FAILEDREASONABLY TO SUPERVISE THE REGISTERED REPRESENTATIVE FORPURPOSES OF SECTION 15(B)(4)(E) OF THE EXCHANGE ACT.












Other Product Type(s): ANNUITY INVESTMENTS

SEC ADMINISTRATIVE RELEASE 60480, AUGUST 11, 2009: THE SEC (OR "COMMISSION") DEEMS IT APPROPRIATE AND IN THE PUBLIC INTERESTTHAT PUBLIC ADMINISTRATIVE PROCEEDINGS BE, AND HEREBY ARE,INSTITUTED PURSUANT TO SECTION 15(B)(4) OF THE SECURITIESEXCHANGE ACT OF 1934 AGAINST AXA ADVISORS, LLC FOR FAILINGREASONABLY TO SUPERVISE A REGISTERED REPRESENTATIVE WITH AVIEW TO PREVENTING AND DETECTING HIS VIOLATIONS OF THE FEDERALSECURITIES LAWS DURING THE PERIOD JULY 2004 THROUGH JUNE 2007.THE COMMISSION FOUND THAT DURING AT LEAST THIS TIME PERIOD, THEREGISTERED REPRESENTATIVE FRAUDULENTLY INDUCED INVESTORS,THE MAJORITY OF WHOM WERE CURRENT TEACHERS IN COLORADOPUBLIC SCHOOLS, TO CONSENT TO ROLL OVER THEIR RETIREMENTINVESTMENTS FROM THEIR 401(K) ACCOUNTS INTO EXISTING 403(B)INVESTMENT PRODUCTS OFFERED BY THE AXA ADVISORS. THEREGISTERED REPRESENTATIVE FRAUDULENTLY INDUCED AT LEAST $1.6MILLION WORTH OF DIRECT PARTICIPANT ROLLOVERS INTO AXA'S 403(B)PRODUCTS USING THIS SCHEME. AS A RESULT, THE REGISTEREDREPRESENTATIVE VIOLATED SECTION 10(B) OF THE EXCHANGE ACT ANDRULE 10B-5 THEREUNDER. THE COMMISSION ALSO FOUND THAT AXAFAILED TO ESTABLISH ADEQUATE PROCEDURES RELATING TO ROLLOVERTRANSACTIONS. AXA KNEW THAT THE REGISTERED REPRESENTATIVEWAS ROLLING OVER PARTICIPANTS' 401(K) ACCOUNTS INTO 403(B)ACCOUNTS WITH AXA, TRANSFERRING PARTICIPANTS FROM MUTUALFUND INVESTMENTS INTO ANNUITY INVESTMENTS. THE REGISTEREDREPRESENTATIVE WAS ACTIVELY SOLICITING PARTICIPANTS TOTRANSFER INVESTMENTS RESULTING IN A COMMISSION FOR THEREPRESENTATIVE. AXA HAD INADEQUATE SUPERVISORY PROCEDURES INPLACE TO REVIEW ROLLOVER TRANSACTIONS INTO CUSTOMERS'EXISTING ACCOUNTS BECAUSE SUPERVISORS WERE ONLY REQUIRED TOREVIEW ROLLOVERS INTO NEW ANNUITY ACCOUNTS, NOT EXISTINGANNUITY ACCOUNTS. THE REGISTERED REPRESENTATIVE COMPLETEDFRAUDULENT ROLLOVERS BY EXPLOITING THIS GAP IN AXA'SSUPERVISORY SYSTEM. IF AXA HAD ESTABLISHED A PROCEDURE FORREVIEWING THE REPRESENTATIVE'S ROLLOVER TRANSACTIONS INTOEXISTING ACCOUNTS, THE REPRESENTATIVE'S FRAUD LIKELY WOULDHAVE BEEN DETECTED AND PREVENTED. IN ADDITION, THE COMMISSIONFOUND THAT THE LACK OF PROCEDURES RELATING TO REVIEW OFROLLOVERS LED SUPERVISORS TO MISS INFORMATION THAT COULDHAVE SIGNALED THE REPRESENTATIVE'S VIOLATIONS. DOCUMENTS INTHE CUSTOMER FILES INDICATED THAT THE REPRESENTATIVE WASCOMPLETING ROLLOVERS FOR PARTICIPANTS THAT WERE STILLEMPLOYED BY THEIR RESPECTIVE SCHOOL DISTRICTS AND THUS WEREINELIGIBLE FOR ROLLOVERS UNLESS THEY HAD REACHED THE AGE OF59-1/2. AXA'S LACK OF PROCEDURES FOR REVIEWING ROLLOVERTRANSACTIONS INTO EXISTING ACCOUNTS ALLOWED THESE RED FLAGSAND THE REGISTERED REPRESENTATIVE'S FRAUDULENT ACTIVITY TO GOUNDETECTED. BECAUSE THE REPRESENTATIVE VIOLATED SECTION 10(B)OF THE EXCHANGE ACT AND RULE 10B-5 THEREUNDER AND AXA FAILEDTO ESTABLISH ADEQUATE PROCEDURES THAT WOULD REASONABLY BEEXPECTED TO PREVENT AND DETECT SUCH VIOLATIONS, AXA FAILEDREASONABLY TO SUPERVISE THE REGISTERED REPRESENTATIVE FORPURPOSES OF SECTION 15(B)(4)(E) OF THE EXCHANGE ACT.


Resolution:


Sanction Details: RESPONDENT AXA ADVISORS HAS SUBMITTED AN OFFER OF SETTLEMENT(THE "OFFER") WHICH THE COMMISSION HAS DETERMINED TO ACCEPT.SOLELY FOR THE PURPOSE OF THESE PROCEEDINGS AND ANY OTHERPROCEEDINGS BROUGHT BY OR ON BEHALF OF THE COMMISSION, OR TOWHICH THE COMMISSION IS A PARTY, AND WITHOUT ADMITTING ORDENYING THE FINDINGS, EXCEPT AS TO THE COMMISSION'SJURISDICTION OVER IT AND THE SUBJECT MATTER OF THESEPROCEEDINGS, AXA CONSENTS TO THE ENTRY OF THIS ORDERINSTITUTING ADMINISTRATIVE PROCEEDINGS, MAKING FINDINGS, ANDIMPOSING REMEDIAL SANCTIONS PURSUANT TO SECTION 15(B)(4) OF THESECURITIES ACT OF 1934. ACCORDINGLY, PURSUANT TO SECTIONS15(B)(4), AXA IS HEREBY CENSURED AND ORDERED TO PAY A CIVILPENALTY OF $50,000 TO THE UNITED STATES TREASURY WITHIN 10 DAYSOF THE ENTRY OF THIS ORDER. IN ADDITION, WHEN FULLYIMPLEMENTED, AXA WILL PROVIDE WRITTEN CERTIFICATION TOCOMMISSION STAFF THAT IT HAS AN AUTOMATED SYSTEM FORREVIEWING THE SUITABILITY OF ALL SUBSEQUENT CONTRIBUTIONS NOTORIGINATING FROM ORDINARY PAYROLL DEDUCTIONS.


No


Order






RESPONDENT AXA ADVISORS HAS SUBMITTED AN OFFER OF SETTLEMENT(THE "OFFER") WHICH THE COMMISSION HAS DETERMINED TO ACCEPT.SOLELY FOR THE PURPOSE OF THESE PROCEEDINGS AND ANY OTHERPROCEEDINGS BROUGHT BY OR ON BEHALF OF THE COMMISSION, OR TOWHICH THE COMMISSION IS A PARTY, AND WITHOUT ADMITTING ORDENYING THE FINDINGS, EXCEPT AS TO THE COMMISSION'SJURISDICTION OVER IT AND THE SUBJECT MATTER OF THESEPROCEEDINGS, AXA CONSENTS TO THE ENTRY OF THIS ORDERINSTITUTING ADMINISTRATIVE PROCEEDINGS, MAKING FINDINGS, ANDIMPOSING REMEDIAL SANCTIONS PURSUANT TO SECTION 15(B)(4) OF THESECURITIES ACT OF 1934. ACCORDINGLY, PURSUANT TO SECTIONS15(B)(4), AXA IS HEREBY CENSURED AND ORDERED TO PAY A CIVILPENALTY OF $50,000 TO THE UNITED STATES TREASURY WITHIN 10 DAYSOF THE ENTRY OF THIS ORDER. IN ADDITION, WHEN FULLYIMPLEMENTED, AXA WILL PROVIDE WRITTEN CERTIFICATION TOCOMMISSION STAFF THAT IT HAS AN AUTOMATED SYSTEM FORREVIEWING THE SUITABILITY OF ALL SUBSEQUENT CONTRIBUTIONS NOTORIGINATING FROM ORDINARY PAYROLL DEDUCTIONS.

Regulator Statement TO PRESERVE THE DETERRENT EFFECT OF THIS CIVIL PENALTY,RESPONDENT AGREES THAT IT SHALL NOT ARGUE THAT IT IS ENTITLEDTO, NOR SHALL IT FURTHER BENEFIT BY OFFSET OR REDUCTION OF ANYPART OF RESPONDENT'S PAYMENT OF A CIVIL PENALTY IN THIS ACTION("PENALTY OFFSET"). IF THE COURT IN ANY RELATED INVESTOR ACTIONGRANTS SUCH A PENALTY OFFSET, RESPONDENT AGREES THAT IT SHALL,WITHIN 30 DAYS AFTER ENTRY OF A FINAL ORDER GRANTING THEPENALTY OFFSET, NOTIFY THE COMMISSION'S COUNSEL IN THIS ACTIONAND PAY THE AMOUNT OF THE PENALTY OFFSET TO THE UNITED STATESTREASURY. SUCH A PAYMENT SHALL NOT BE DEEMED AN ADDITIONALCIVIL PENALTY AND SHALL NOT BE DEEMED TO CHANGE THE AMOUNT OFTHE CIVIL PENALTY IMPOSED IN THIS PROCEEDING. FOR PURPOSES OFTHIS PARAGRAPH, A "RELATED INVESTOR ACTION" MEANS A PRIVATEDAMAGES ACTION BROUGHT AGAINST RESPONDENT BY OR ON BEHALFOF ONE OR MORE INVESTORS BASED ON SUBSTANTIALLY THE SAMEFACTS AS ALLEGED IN THE ORDER INSTITUTED BY THE COMMISSION INTHIS PROCEEDING.








Other Product Type(s): ANNUITY INVESTMENTS

Allegations: RESPONDENT FAILED REASONABLY TO SUPERVISE GORDON R. MOORE("MOORE") WITH A VIEW TO PREVENTING AND DETECTING HIS VIOLATIONSOF THE FEDERAL SECURITIES LAWS DURING THE PERIOD JULY 2004THROUGH JUNE 2007. DURING AT LEAST THIS TIME PERIOD, MOOREFRAUDULENTLY INDUCED INVESTORS, THE MAJORITY OF WHOM WERECURRENT TEACHERS IN COLORADO PUBLIC SCHOOLS, TO CONSENT TOROLL OVER THEIR RETIREMENT INVESTMENTS FROM THEIR COLORADOPUBLIC EMPLOYEES' ASSOCIATION ("PERA") 401(K) ACCOUNTS INTOEXISTING 403(B) INVESTMENT PRODUCTS OFFERED BY RESPONDENT.








Resolution:


Sanction Details: THE FIRM HAS SUBMITTED AN OFFER OF SETTLEMENT ("THE OFFER")WHICH THE COMMISSION HAS DETERMINED TO ACCEPT. WITHOUTADMITTING OR DENYING THE FINDINGS, THE FIRM CONSENTED TO THEENTRY OF THE ORDER, MAKING FINDINGS AND IMPOSING REMEDIALSANCTIONS. THE FIRM WAS CENSURED AND ORDERED TO PAY A CIVILPENALTY OF $50,000. IN ADDITION, WHEN FULLY IMPLEMENTED, THE FIRMWILL PROVIDE WRITTEN CERTIFICATION TO THE COMMISSION STAFF THATIT HAS AN AUTOMATED SYSTEM FOR REVIEWING THE SUITABILITY OF ALLSUBSEQUENT CONTRIBUTIONS NOT ORIGINATING FROM ORDINARYPAYROLL DEDUCTIONS.


Order

Disclosure 15 of 25

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Initiated By: FINRA


Docket/Case Number: EAF0401030001

Allegations: SECTION 17(A) OF THE SECURITIES EXCHANGE ACT OF 1934 AND RULE17A-4 THEREUNDER, NASD RULES 2110, 3010 AND 3110: BEFOREIMPLEMENTING A NEW SYSTEM TO RETAIN BUSINESS-RELATEDDOCUMENTS, INCLUDING EMAILS, RESPONDENT FAILED TO ENSURE THATALL BUSINESS-RELATED EMAILS WERE RETAINED. AFTERIMPLEMENTATION, THE SYSTEM MALFUNCTIONED AND RESPONDENT DIDNOT HAVE ADEQUATE SYSTEMS IN PLACE TO DETECT AND PREVENT THEMALFUNCTIONS. AS A RESULT OF THESE MALFUNCTIONS, BUSINESS-RELATED EMAILS WERE NOT PROPERLY ARCHIVED AND RETAINED.RESPONDENT THEREFORE FAILED TO KEEP ELECTRONICCOMMUNICATIONS FOR THREE YEARS AND/OR FAILED TO PRESERVESUCH COMMUNICATIONS FOR THE FIRST TWO YEARS IN AN ACCESSIBLEPLACE. RESPONDENT ALSO FAILED TO HAVE SUPERVISORY SYSTEMSAND PROCEDURES THAT WERE REASONABLY DESIGNED TO ACHIEVECOMPLIANCE WITH SECTION 17(A) OF THE EXCHANGE ACT AND RULE 17A-4 THEREUNDER AND NASD RULES 2110 AND 3110 AND TO DETECT ANDPREVENT MALFUNCTIONS IN ITS EMAIL ARCHIVE SYSTEM.






https://www.finra.org/rules-guidance/oversight-enforcement/finra-disciplinary-actions?search=EAF0401030001








Resolution:


Sanction Details: WITHOUT ADMITTING OR DENYING THE FINDINGS, RESPONDENTCONSENTED TO THE DESCRIBED SANCTIONS AND TO THE ENTRY OFFINDINGS; THEREFORE, RESPONDENT IS CENSURED AND FINED $350,000.


No




Initiated By: FINANCIAL INDUSTRY REGULATORY AUTHORITY (FINRA)







Allegations: FROM JANUARY 2002 TO JULY 2006, AXA EITHER FAILED TO RETAINBUSINESS RELATED E-MAIL OR FAILED TO HAVE ADEQUATE SUPERVISORYSYSTEMS AND PROCEDURES IN PLACE TO DETECT AND PREVENTCERTAIN MALFUNCTIONS IN THE E-MAIL ARCHIVE SYSTEM USED BY AXA.













Resolution:


Sanction Details: WITHOUT ADMITTING OR DENYING THE FINDINGS, THE FIRM CONSENTEDTO THE DESCRIBED SANCTIONS AND TO THE ENTRY OF THE FINDINGS;WAS CENSURED AND FINED $350,000.00.

Firm Statement FINRA ALLEGED THAT FROM JANUARY 2002 TO AUGUST 2004, AXAADVISORS FAILED TO ENSURE THAT ALL BUSINESS-RELATED E-MAILSWERE RETAINED, AND FAILED TO RETAIN INSTANT MESSAGES AND OTHERELECTRONIC COMMUNICATIONS. IN AUGUST 2004, A NEW SYSTEM WASINSTALLED TO RETAIN E-MAILS AND EMPLOY ARCHIVES THAT PERMITTEDSEARCHES FOR REGULATORY AND OTHER REQUESTS, BUT THE SYSTEMPERIODICALLY FAILED TO CAPTURE CERTAIN E-MAIL FROM AUGUST 2004TO JULY 2006. FINRA NOTED THAT DESPITE THE DEFICIENCIES ALLEGEDHEREIN, AXA ADVISORS DID NOT FAIL TO PRODUCE E-MAILS THAT WEREMATERIAL TO ANY REGULATORY INVESTIGATION OR OTHER LEGALPROCEEDING. FINRA NOTED AXA ADVISORS' SELF-REPORTING OF THISMATTER, AND THE STEPS IT TOOK TO REMEDY DEFICIENCIES.



Disclosure 16 of 25

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Allegations: NASD RULES 2210, 2211, 2110 AND 3010: RESPONDENT FIRM OFFERED ITSCUSTOMERS A FEE-BASED BROKERAGE ACCOUNT, AND RATHER THANPAYING A COMMISSION ON EVERY TRADE MADE IN THE ACCOUNT,CUSTOMERS PAID AN ANNUAL FEE BASED ON THE TOTAL VALUE OFASSETS IN THE ACCOUNT. RESPONDENT FAILED TO ESTABLISH ANDMAINTAIN A SUPERVISORY SYSTEM REASONABLY DESIGNED TO REVIEWAND MONITOR ITS FEE-BASED BROKERAGE BUSINESS. NEITHERRESPONDENT'S PRACTICES IN SUPERVISING ACCOUNT, NOR ITS WRITTENPROCEDURES FOR A FEE-BASED BROKERAGE ACCOUNTS WEREADEQUATE. AS A RESULT OF DEFICIENCIES IN THE FIRM'S SUPERVISORYSYSTEMS AND PROCEDURES, RESPONDENT ALLOWED CUSTOMERS TOOPEN AND CONTINUE IN A FEE-BASED ACCOUNTS EVEN IF THEACCOUNTS WERE INAPPROPRIATE FOR THE INVESTORS IN LIGHT OF THEFEE-IN-LIEU OF COMMISSION STRUCTURE, THE $1,000 MINIMUM ANNUALFEE, OR THE REQUIRED $50,000 MINIMUM IN ASSETS. AXA COLLECTEDFEES FROM THOSE ACCOUNTS AFTER THE ACCOUNTS WENT A FULL YEARWITH NO TRANSACTIONS, IMPOSED FEES EVEN IF THE ACCOUNT STAYEDBELOW THE MINIMUM ASSET LEVEL FOR A YEAR, AND CHARGED ASSET-BASED FEES FOR THOSE ACCOUNTS BEFORE THE ACCOUNTS EVERREACHED THE MINIMUM VALUE THAT WAS SUPPOSED TO TRIGGER THEASSET-BASED FEE. AXA DISTRIBUTED INACCURATE AND MISLEADINGSALES LITERATURE, PUBLIC COMMUNICATIONS, INSTITUTIONAL SALESMATERIAL, AND INTERNAL COMMUNICATIONS IN VIOLATIONS OF NASDRULES 2210(D) AND 2211(D).







Initiated By: FINRA







NASD RULES 2210, 2211, 2110 AND 3010: RESPONDENT FIRM OFFERED ITSCUSTOMERS A FEE-BASED BROKERAGE ACCOUNT, AND RATHER THANPAYING A COMMISSION ON EVERY TRADE MADE IN THE ACCOUNT,CUSTOMERS PAID AN ANNUAL FEE BASED ON THE TOTAL VALUE OFASSETS IN THE ACCOUNT. RESPONDENT FAILED TO ESTABLISH ANDMAINTAIN A SUPERVISORY SYSTEM REASONABLY DESIGNED TO REVIEWAND MONITOR ITS FEE-BASED BROKERAGE BUSINESS. NEITHERRESPONDENT'S PRACTICES IN SUPERVISING ACCOUNT, NOR ITS WRITTENPROCEDURES FOR A FEE-BASED BROKERAGE ACCOUNTS WEREADEQUATE. AS A RESULT OF DEFICIENCIES IN THE FIRM'S SUPERVISORYSYSTEMS AND PROCEDURES, RESPONDENT ALLOWED CUSTOMERS TOOPEN AND CONTINUE IN A FEE-BASED ACCOUNTS EVEN IF THEACCOUNTS WERE INAPPROPRIATE FOR THE INVESTORS IN LIGHT OF THEFEE-IN-LIEU OF COMMISSION STRUCTURE, THE $1,000 MINIMUM ANNUALFEE, OR THE REQUIRED $50,000 MINIMUM IN ASSETS. AXA COLLECTEDFEES FROM THOSE ACCOUNTS AFTER THE ACCOUNTS WENT A FULL YEARWITH NO TRANSACTIONS, IMPOSED FEES EVEN IF THE ACCOUNT STAYEDBELOW THE MINIMUM ASSET LEVEL FOR A YEAR, AND CHARGED ASSET-BASED FEES FOR THOSE ACCOUNTS BEFORE THE ACCOUNTS EVERREACHED THE MINIMUM VALUE THAT WAS SUPPOSED TO TRIGGER THEASSET-BASED FEE. AXA DISTRIBUTED INACCURATE AND MISLEADINGSALES LITERATURE, PUBLIC COMMUNICATIONS, INSTITUTIONAL SALESMATERIAL, AND INTERNAL COMMUNICATIONS IN VIOLATIONS OF NASDRULES 2210(D) AND 2211(D).


Resolution:

Other Sanctions Ordered: UNDERTAKINGS

Sanction Details: WITHOUT ADMITTING OR DENYING THE FINDINGS, RESPONDENT MEMBERFIRM CONSENTED TO THE DESCRIBED SANCTIONS AND TO THE ENTRY OFFINDINGS; THEREFORE, FIRM IS CENSURED, FINED $1,200,000, ORDEREDTO PAY $1,391,427, PLUS INTEREST IN RESTITUTION AND REQUIRED:WITHIN 90 DAYS TO COMPLETE THE REMEDIATION PROCESS TOCUSTOMERS REQUIRING REFUNDS; WITHIN 120 DAYS FILE A REPORTPROVIDING A DETAILED LISTING OF ALL QUALIFYING CUSTOMERS; AND TODISCONTINUE OF ALL OF ITS FEE-BASED BROKERAGE BUSINESS BYSEPTEMBER 30, 2007 AND TO PROVIDE WRITTEN NOTICE OF WHETHERAXA HAS CEASED ITS FEE-BASED BUSINESS TO FINRA BY OCTOBER 30,2007.SATISFACTORY PROOF OF PAYMENT OF THE RESTITUTION OR OFREASONABLE AND DOCUMENTED EFFORTS UNDERTAKEN TO EFFECTRESTITUTION SHALL BE PROVIDED TO FINRA NO LATER THAN 120 DAYSAFTER ACCEPTANCE OF THIS AWC.IF FOR ANY REASON CUSTOMER CANNOT BE LOCATED, AFTERREASONABLE AND DOCUMENTED EFFORTS WITHIN SUCH PERIOD, ORSUCH ADDITIONAL PERIOD AGREED TO BY THE STAFF, RESPONDENTSHALL FORWARD ANY UNDISTRIBUTED RESTITUTION AND INTEREST TOTHE APPROPRIATE ESCHEAT, UNCLAIMED PROPERTY, OR ABANDONEDPROPERTY FUND FOR THE STATE IN WHICH THE CUSTOMER IS LASTKNOW TO HAVE RESIDED.


No

Sanctions Ordered: CensureMonetary/Fine $1,200,000.00Disgorgement/Restitution







www.finra.org/brokercheck User GuidanceWITHOUT ADMITTING OR DENYING THE FINDINGS, RESPONDENT MEMBERFIRM CONSENTED TO THE DESCRIBED SANCTIONS AND TO THE ENTRY OFFINDINGS; THEREFORE, FIRM IS CENSURED, FINED $1,200,000, ORDEREDTO PAY $1,391,427, PLUS INTEREST IN RESTITUTION AND REQUIRED:WITHIN 90 DAYS TO COMPLETE THE REMEDIATION PROCESS TOCUSTOMERS REQUIRING REFUNDS; WITHIN 120 DAYS FILE A REPORTPROVIDING A DETAILED LISTING OF ALL QUALIFYING CUSTOMERS; AND TODISCONTINUE OF ALL OF ITS FEE-BASED BROKERAGE BUSINESS BYSEPTEMBER 30, 2007 AND TO PROVIDE WRITTEN NOTICE OF WHETHERAXA HAS CEASED ITS FEE-BASED BUSINESS TO FINRA BY OCTOBER 30,2007.SATISFACTORY PROOF OF PAYMENT OF THE RESTITUTION OR OFREASONABLE AND DOCUMENTED EFFORTS UNDERTAKEN TO EFFECTRESTITUTION SHALL BE PROVIDED TO FINRA NO LATER THAN 120 DAYSAFTER ACCEPTANCE OF THIS AWC.IF FOR ANY REASON CUSTOMER CANNOT BE LOCATED, AFTERREASONABLE AND DOCUMENTED EFFORTS WITHIN SUCH PERIOD, ORSUCH ADDITIONAL PERIOD AGREED TO BY THE STAFF, RESPONDENTSHALL FORWARD ANY UNDISTRIBUTED RESTITUTION AND INTEREST TOTHE APPROPRIATE ESCHEAT, UNCLAIMED PROPERTY, OR ABANDONEDPROPERTY FUND FOR THE STATE IN WHICH THE CUSTOMER IS LASTKNOW TO HAVE RESIDED.

Regulator Statement IN ADDITION, THE FIRM HAS UNDERTAKEN VOLUNTARY REMEDIATIONTHAT GO BEYOND THE REMEDIATION REQUIRED IN THIS AWC.


Allegations: AXA OFFERED ITS CUSTOMERS A FEE-BASED BROKERAGE ACCOUNT, INWHICH CUSTOMERS PAID AN ANNUAL FEE BASED ON THE TOTAL VALUEOF ASSETS IN THE ACCOUNT, RATHER THAN PAYING A COMMISSION ONEVERY TRADE MADE IN THE ACCOUNT. FINRA ALLEGED THAT AXA FAILEDTO ESTABLISH AND MAINTAIN A SUPERVISORY SYSTEM REASONABLYDESIGNED TO REVIEW AND MONITOR ITS FEE-BASED BROKERAGEBUSINESS IN VIOLATION OF NASD CONDUCT RULES 3010 AND 2110. FINRAALLEGED THAT NEITHER AXA'S PRACTICES IN SUPERVISING ACCOUNTS,NOR ITS WRITTEN PROCEDURES FOR FEE-BASED BROKERAGEACCOUNTS WERE ADEQUATE, AND AS A RESULT OF THE ALLEGEDDEFICIENCIES IN THE FIRM'S SUPERVISORY SYSTEMS AND PROCEDURES,AXA ALLOWED CUSTOMERS TO OPEN AND CONTINUE IN FEE-BASEDACCOUNTS EVEN IF THE ACCOUNTS WERE INAPPROPRIATE FOR THEINVESTORS IN LIGHT OF THE FEE-IN-LIEU OF COMMISSION STRUCTURE,THE $1,000 MINIMUM ANNUAL FEE, OR THE REQUIRED $50,000 MINIMUM INASSETS. AXA COLLECTED FEES FROM CERTAIN ACCOUNTS AFTER THEACCOUNTS WENT A FULL YEAR WITH NO TRADING TRANSACTIONS,IMPOSED FEES EVEN IF THE ACCOUNT STAYED BELOW THE MINIMUMASSET LEVEL FOR A YEAR, AND CHARGED ASSET-BASED FEES FORTHOSE ACCOUNTS BEFORE THE ACCOUNTS REACHED THE MINIMUMVALUE THAT WAS REQUIRED TO TRIGGER THE ASSET-BASED FEE. AXA ISALSO ALLEGED TO HAVE DISTRIBUTED INACCURATE AND MISLEADINGSALES LITERATURE, PUBLIC COMMUNICATIONS, INSTITUTIONAL SALESMATERIAL, AND INTERNAL COMMUNICATIONS IN VIOLATIONS OF NASDRULES 2210(D) AND 2211(D).







Initiated By: FINRA




CENSURE AND RESTITUTION




Other Product Type(s): FEE BASED BROKERAGE ACCOUNT

AXA OFFERED ITS CUSTOMERS A FEE-BASED BROKERAGE ACCOUNT, INWHICH CUSTOMERS PAID AN ANNUAL FEE BASED ON THE TOTAL VALUEOF ASSETS IN THE ACCOUNT, RATHER THAN PAYING A COMMISSION ONEVERY TRADE MADE IN THE ACCOUNT. FINRA ALLEGED THAT AXA FAILEDTO ESTABLISH AND MAINTAIN A SUPERVISORY SYSTEM REASONABLYDESIGNED TO REVIEW AND MONITOR ITS FEE-BASED BROKERAGEBUSINESS IN VIOLATION OF NASD CONDUCT RULES 3010 AND 2110. FINRAALLEGED THAT NEITHER AXA'S PRACTICES IN SUPERVISING ACCOUNTS,NOR ITS WRITTEN PROCEDURES FOR FEE-BASED BROKERAGEACCOUNTS WERE ADEQUATE, AND AS A RESULT OF THE ALLEGEDDEFICIENCIES IN THE FIRM'S SUPERVISORY SYSTEMS AND PROCEDURES,AXA ALLOWED CUSTOMERS TO OPEN AND CONTINUE IN FEE-BASEDACCOUNTS EVEN IF THE ACCOUNTS WERE INAPPROPRIATE FOR THEINVESTORS IN LIGHT OF THE FEE-IN-LIEU OF COMMISSION STRUCTURE,THE $1,000 MINIMUM ANNUAL FEE, OR THE REQUIRED $50,000 MINIMUM INASSETS. AXA COLLECTED FEES FROM CERTAIN ACCOUNTS AFTER THEACCOUNTS WENT A FULL YEAR WITH NO TRADING TRANSACTIONS,IMPOSED FEES EVEN IF THE ACCOUNT STAYED BELOW THE MINIMUMASSET LEVEL FOR A YEAR, AND CHARGED ASSET-BASED FEES FORTHOSE ACCOUNTS BEFORE THE ACCOUNTS REACHED THE MINIMUMVALUE THAT WAS REQUIRED TO TRIGGER THE ASSET-BASED FEE. AXA ISALSO ALLEGED TO HAVE DISTRIBUTED INACCURATE AND MISLEADINGSALES LITERATURE, PUBLIC COMMUNICATIONS, INSTITUTIONAL SALESMATERIAL, AND INTERNAL COMMUNICATIONS IN VIOLATIONS OF NASDRULES 2210(D) AND 2211(D).


Resolution:


Sanction Details: WITHOUT ADMITTING OR DENYING THE FINDINGS, AXA CONSENTED TOTHE DESCRIBED SANCTIONS AND TO THE ENTRY OF FINDINGS; WASCENSURED, FINED $1,200,000, ORDERED TO PAY REMEDIATION OF$1,391,427, PLUS INTEREST. AXA WAS ALSO REQUIRED TO COMPLETE THEREMEDIATION PROCESS TO CUSTOMERS REQUIRING REFUNDS WITHIN 90DAYS; FILE A REPORT PROVIDING A DETAILED LISTING OF ALL QUALIFYINGCUSTOMERS WITHIN 120 DAYS; AND PROVIDE WRITTEN NOTICE TO FINRAOF WHETHER AXA HAS CEASED ITS FEE-BASED BUSINESS BY OCTOBER30, 2007. SATISFACTORY PROOF OF PAYMENT OF THE RESTITUTION OR OFREASONABLE AND DOCUMENTED EFFORTS UNDERTAKEN TO EFFECTRESTITUTION SHALL BE PROVIDED TO FINRA NO LATER THAN 120 DAYSAFTER ACCEPTANCE OF THE AWC. IF FOR ANY REASON A CUSTOMERCANNOT BE LOCATED, AFTER REASONABLE AND DOCUMENTED EFFORTSWITHIN SUCH PERIOD, OR SUCH ADDITIONAL PERIOD AGREED TO BY THESTAFF, AXA SHALL FORWARD ANY UNDISTRIBUTED RESTITUTION ANDINTEREST TO THE APPROPRIATE ESCHEAT, UNCLAIMED PROPERTY, ORABANDONED PROPERTY FUND FOR THE STATE IN WHICH THE CUSTOMERIS LAST KNOWN TO HAVE RESIDED.

Sanctions Ordered: CensureMonetary/Fine $1,200,000.00Disgorgement/Restitution








WITHOUT ADMITTING OR DENYING THE FINDINGS, AXA CONSENTED TOTHE DESCRIBED SANCTIONS AND TO THE ENTRY OF FINDINGS; WASCENSURED, FINED $1,200,000, ORDERED TO PAY REMEDIATION OF$1,391,427, PLUS INTEREST. AXA WAS ALSO REQUIRED TO COMPLETE THEREMEDIATION PROCESS TO CUSTOMERS REQUIRING REFUNDS WITHIN 90DAYS; FILE A REPORT PROVIDING A DETAILED LISTING OF ALL QUALIFYINGCUSTOMERS WITHIN 120 DAYS; AND PROVIDE WRITTEN NOTICE TO FINRAOF WHETHER AXA HAS CEASED ITS FEE-BASED BUSINESS BY OCTOBER30, 2007. SATISFACTORY PROOF OF PAYMENT OF THE RESTITUTION OR OFREASONABLE AND DOCUMENTED EFFORTS UNDERTAKEN TO EFFECTRESTITUTION SHALL BE PROVIDED TO FINRA NO LATER THAN 120 DAYSAFTER ACCEPTANCE OF THE AWC. IF FOR ANY REASON A CUSTOMERCANNOT BE LOCATED, AFTER REASONABLE AND DOCUMENTED EFFORTSWITHIN SUCH PERIOD, OR SUCH ADDITIONAL PERIOD AGREED TO BY THESTAFF, AXA SHALL FORWARD ANY UNDISTRIBUTED RESTITUTION ANDINTEREST TO THE APPROPRIATE ESCHEAT, UNCLAIMED PROPERTY, ORABANDONED PROPERTY FUND FOR THE STATE IN WHICH THE CUSTOMERIS LAST KNOWN TO HAVE RESIDED.

Firm Statement IN ADDITION, AXA HAS UNDERTAKEN VOLUNTARY REMEDIATION THATGOES BEYOND THE REMEDIATION REQUIRED IN THE AWC.

Disclosure 17 of 25

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Initiated By: NASD






Other Product Type(s): TRACE-ELIGIBLE SECURITIES

Allegations: SEC RULE 17A-4, NASD RULES 2110, 3010, 3110, 6230, 6230(A) - AXAADVISORS, LLC FAILED TO REPORT TO TRACE TRANSACTIONS IN TRACE-ELIGIBLE SECURITIES EXECUTED ON A BUSINESS DAY DURING TRACESYSTEM HOURS WITHIN 45 MINUTES OF THE TIME OF EXECUTION;INCORRECTLY REPORTED TO TRACE PURCHASES IN TRACE-ELIGIBLESECURITIES; FAILED TO PRESERVE FOR A PERIOD OF NOT LESS THANTHREE YEARS, THE FIRST TWO IN AN ACCESSIBLE PLACE, THEMEMORANDUM OF BROKERAGE ORDERS CONTAINING ALL OF THEINFORMATION REQUIRED BY THE APPLICABLE RULES; AND THE FIRM'SSUPERVISORY SYSTEM DID NOT PROVIDE FOR SUPERVISIONREASONABLY DESIGNED TO ACHIEVE COMPLIANCE WITH RESPECT TOAPPLICABLE SECURITIES LAWS, REGULATIONS AND NASD RULESCONCERING TRACE REPORTING.



Resolution:


No












Initiated By: NASD




CENSURE




Other Product Type(s): TRACE-ELIGIBLE SECURITIES

Allegations: SEC RULE 17A-4, NASD RULES 2110, 3010, 3110, 6230, 6230(A) - THE FIRMFAILED TO REPORT TO TRACE TRANSACTIONS IN TRACE-ELIGIBLESECURITIES EXECUTED ON A BUSINESS DAY DURING TRACE SYSTEMHOURS WITHIN 45 MINUTES OF THE TIME OF EXECUTION; INCORRECTLYREPORTED TO TRACE PURCHASES IN TRACE-ELIGIBLE SECURITIES;FAILED TO PRESERVE FOR A PERIOD OF NOT LESS THAN THREE YEARS,THE FIRST TWO IN AN ACCESSIBLE PLACE, THE MEMORANDUM OFBROKERAGE ORDERS CONTAINING ALL OF THE INFORMATION REQUIREDBY APPLICABLE RULES; AND THE FIRM'S SUPERVISORY SYSTEM DID NOTPROVIDE FOR SUPERVISION REASONABLY DESIGNED TO ACHIEVECOMPLIANCE WITH RESPECT TO APPLICABLE SECURITIES LAWS,REGULATIONS AND NASD RULES CONCERNING TRACE REPORTING.



Resolution:


Sanction Details: WITHOUT ADMITTING OR DENYING THE FINDINGS, THE FIRM CONSENTEDTO THE DESCRIBED SANCTIONS AND TO THE ENTRY OF FINDINGS; THEFIRM WAS CENSURED AND FINED $20,000.








Sanction Details: WITHOUT ADMITTING OR DENYING THE FINDINGS, THE FIRM CONSENTEDTO THE DESCRIBED SANCTIONS AND TO THE ENTRY OF FINDINGS; THEFIRM WAS CENSURED AND FINED $20,000.

Disclosure 18 of 25

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Initiated By: NASD




Docket/Case Number: CE1050004



Allegations: NASD CONDUCT RULES 2830(K) AND 2110; MAINTAINED A REVENUESHARING PROGRAM IN WHICH A NUMBER OF PARTICIPATING MUTUALFUNDS COMPLEXES PAID A FEE IN RETURN FOR CERTAIN PREFERENTIALTREATMENT, WHICH INCLUDED ENHANCED ACCESS TO THE FIRM'S SALESFORCE, PLACEMENT OF SALES MATERIAL ON THE FIRM'S INTERNALWEBSITE AND PROMOTION OF THE FUNDS' SHARES BY THE FIRM ON ABROADER BASIS THAN WASA AVAILABLE FOR OTHER FUNDS.PARTICIPATING FUND COMPLEXES PAID THEIR FEES, IN WHOLE OR PART,BY DIRECTING BROKERAGE COMMISSIONS TO THE FIRM.



Resolution:


Sanction Details: WITHOUT ADMITTING OR DENYING THE ALLEGATIONS AXA ADVISORS, LLC,CONSENTED TO THE DESCRIBED SANCTIONS AND TO THE ENTRY OFFINDINGS THEREFORE, THE FIRM IS CENSURED AND FINED $900,000.00


No







https://www.finra.org/rules-guidance/oversight-enforcement/finra-disciplinary-actions?search=CE1050004


Sanction Details: WITHOUT ADMITTING OR DENYING THE ALLEGATIONS AXA ADVISORS, LLC,CONSENTED TO THE DESCRIBED SANCTIONS AND TO THE ENTRY OFFINDINGS THEREFORE, THE FIRM IS CENSURED AND FINED $900,000.00


Initiated By: NASD




CENSURE


Docket/Case Number: CE1050004



Allegations: NASD CONDUCT RULES 2830(K) AND 2110; MAINTAINED A REVENUESHARING PROGRAM IN WHICH A NUMBER OF PARTICIPATING MUTUALFUNDS COMPLEXES PAID A FEE IN RETURN FOR CERTAIN PREFERENTIALTREATMENT, WHICH INCLUDED ENHANCED ACCESS TO THE FIRM'S SALESFORCE, PLACEMENT OF SALES MATERIAL ON THE FIRM'S INTERNALWEBSITE AND PROMPTION OF FUNDS' SHARES BY THE FIRM ON ABROADER BASIS THAT WAS AVAILABLE FOR OTHER FUNDS.PARTICIPATING FUND COMPLEXES PAID THEIR FEES, IN WHOLE OR PART,BY DIRECTING BROKERAGE COMMISSIONS TO THE FIRM.



Resolution:


Sanction Details: WITHOUT ADMITTING OR DENYING THE ALLEGATIONS THE FIRMCONSENTED TO THE DESCRIBED SANCTIONS AND TO THE ENTRY OFFINDINGS. THEREFORE THE FIRM WAS CENSURED AND FINED$900,000.00.

Firm Statement THE FIRM'S SALES FORCE, PLACEMENT OF SALES MATERIAL ON THEFIRM'S INTERNAL WEBSITE AND PROMPTION OF FUNDS' SHARES BY THEFIRM ON A BROADER BASIS THAT WAS AVAILABLE FOR OTHER FUNDS.PARTICIPATING FUND COMPLEXES PAID THEIR FEES, IN WHOLE OR PART,BY DIRECTING BROKERAGE COMMISSIONS TO THE FIRM. WITHOUTADMITTING OR DENYING THE ALLEGATIONS THE FIRM CONSENTED TOTHE DESCRIBED SANCTIONS AND TO THE ENTRY OF FINDINGS.THEREFORE THE FIRM WAS CENSURED AND FINED $900,000.00.







https://www.finra.org/rules-guidance/oversight-enforcement/finra-disciplinary-actions?search=CE1050004


THE FIRM'S SALES FORCE, PLACEMENT OF SALES MATERIAL ON THEFIRM'S INTERNAL WEBSITE AND PROMPTION OF FUNDS' SHARES BY THEFIRM ON A BROADER BASIS THAT WAS AVAILABLE FOR OTHER FUNDS.PARTICIPATING FUND COMPLEXES PAID THEIR FEES, IN WHOLE OR PART,BY DIRECTING BROKERAGE COMMISSIONS TO THE FIRM. WITHOUTADMITTING OR DENYING THE ALLEGATIONS THE FIRM CONSENTED TOTHE DESCRIBED SANCTIONS AND TO THE ENTRY OF FINDINGS.THEREFORE THE FIRM WAS CENSURED AND FINED $900,000.00.

Disclosure 19 of 25

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Initiated By: NASD




Docket/Case Number: CAF040099



Allegations: ARTICLE V, SECTIONS 2(C) AND 3(B) OF NASD'S BY-LAWS, AND NASDRULES 2110 AND 3010 - AXA ADVISORS, LLC ("RESPONDENT FIRM") FILEDAT LEAST 210 LATE AMENDMENTS TO FORMS U4 AND U5, WHICHREPRESENTED APPROXIMATELY 31% OF THE REQUIRED AMENDMENTSRELATING TO REPORTABLE CUSTOMER COMPLAINTS, REGULATORYACTIONS, AND CRIMINAL DISCLOSURES. DURING THE RELEVANT PERIOD,THE RESPONDENT FIRM'S SUPERVISORY SYSTEM AND PROCEDURESWERE NOT REASONABLY DESIGNED TO ACHIEVE COMPLIANCE WITH ITSARTICLE V REPORTING OBLIGATIONS.



Resolution:


No









Sanction Details: WITHOUT ADMITTING OR DENYING THE ALLEGATIONS, RESPONDENT FIRMCONSENTED TO THE DESCRIBED SANCTIONS AND TO THE ENTRY OFFINDINGS, THEREFORE, IT IS CENSURED AND FINED $250,000, WHICHSHALL BE PAID WITHIN 10 DAYS OF NOTICE OF ACCEPTANCE OF THISAWC. IN ADDITION RESPONDENT FIRM SHALL COMPLY WITH THEFOLLOWING UNDERTAKINGS: (1) PROMPTLY FOLLOWING NOTICE OFACCEPTANCE OF THIS AWC, THE FIRM'S INTERNAL AUDIT DEPARTMENTOR PERSONNEL NOT DIRECTLY RESPONSIBLE FOR THE FIRM'S ARTICLE VREPORTING OBLIGATIONS AND THEIR IMMEDIATE SUPERVISORS SHALLCONDUCT AN AUDIT TO ASSESS THE EFFECTIVENESS OF ITS SYSTEM ANDPROCEDURES FOR ENSURING TIMELY FILING OF FORM U4 AND U5AMENDMENTS SUMMARIZING FINDINGS AND RECOMMENDATIONS ANDSHALL FOR THE NEXT FOUR CALENDAR QUARTERS BEGINNING FOURTHQUARTER 2004, CONDUCT A SIMILAR AUDIT AND PREPARE A SIMILARWRITTEN AUDIT REPORT. (2) NO LATER THAN 90 DAYS AFTER NOTICE OFACCEPTANCE OF THIS AWC, AN OFFICER OF THE FIRM SHALL CERTIFY INWRITING TO NASD THAT AN AUDIT WAS CONDUCTED AND THE OFFICERHAS REVIEWED THE CURRENT AUDIT REPORT. (3) NO LATER THAN 60DAYS AFTER THE DATE OF THE CURRENT AUDIT REPORT, AN OFFICERSHALL CERTIFY IN WRITING TO NASD THAT THE FIRM HAS IMPLEMENTED,OR HAS BEGUN TO IMPLEMENT, ANY RECOMMENDATIONS WITHIN ASPECIFIED TIME PERIOD. (4) NO LATER THAN 60 DAYS AFTER THE LASTDAY OF THE NEXT FOUR QUARTERS, AN OFFICER SHALL CERTIFY INWRITING TO NASD THAT AN AUDIT WAS CONDUCTED, THE CURRENT AUDITREPORT WAS REVIEWED, AND RECOMMENDATIONS IMPLEMENTED, ORBEGUN TO BE IMPLEMENTED. (5) NO LATER THAN SIX MONTHS AFTERNOTICE OF ACCEPTANCE OF THIS AWC, AN OFFICER SHALL CERTIFY INWRITING TO NASD THAT THE FIRM HAS REVIEWED ITS SYSTEM ANDPROCEDURES FOR COMPLYING WITH ITS ARTICLE V REPORTINGOBLIGATIONS AND HAS ESTABLISHED A SYSTEM AND PROCEDURESREASONABLY DESIGNED TO ACHIEVE COMPLIANCE WITH REPORTINGREQUIREMENTS SET FORTH THEREIN.



Allegations: VIOLATION OF ARTICLE V, SECTIONS 2(C) AND 3(B) OF NASD'S BY-LAWS,AND NASD RULES 2110 AND 3010 -- AXA ADVISORS, LLC FILED AT LEAST210 LATE AMENDMENTS TO FORMS U4 AND U5, WHICH REPRESENTEDAPPROXIMATELY 31% OF THE REQUIRED AMENDMENTS RELATING TOREPORTABLE CUSTOMER COMPLAINTS, REGULATORY ACTIONS, ANDCRIMINAL DISCLOSURES. DURING THE RELEVANT PERIOD, THERESPONDENT FIRM'S SUPERVISORY SYSTEM AND PROCEDURES WERENOT REASONABLY DESIGNED TO ACHIEVE COMPLIANCE WITH ITSARTICLE V REPORTING OBLIGATIONS.







Initiated By: NASD





Docket/Case Number: CAF040099



VIOLATION OF ARTICLE V, SECTIONS 2(C) AND 3(B) OF NASD'S BY-LAWS,AND NASD RULES 2110 AND 3010 -- AXA ADVISORS, LLC FILED AT LEAST210 LATE AMENDMENTS TO FORMS U4 AND U5, WHICH REPRESENTEDAPPROXIMATELY 31% OF THE REQUIRED AMENDMENTS RELATING TOREPORTABLE CUSTOMER COMPLAINTS, REGULATORY ACTIONS, ANDCRIMINAL DISCLOSURES. DURING THE RELEVANT PERIOD, THERESPONDENT FIRM'S SUPERVISORY SYSTEM AND PROCEDURES WERENOT REASONABLY DESIGNED TO ACHIEVE COMPLIANCE WITH ITSARTICLE V REPORTING OBLIGATIONS.


Resolution:


Sanction Details: WITHOUT ADMITTING OR DENYING THE ALLEGATIONS, RESPONDENT FIRMCONSENTED TO THE DESCRIBED SANCTIONS AND TO THE ENTRY OFFINDINGS. THEREFORE, IT WAS CENSURED AND FINED $250,000, WHICHSHALL BE PAID WITHIN 10 DAYS OF NOTICE OF ACCEPTANCE OF THISAWC. IN ADDITION, RESPONDENT FIRM SHALL COMPLY WITH THEFOLLOWING UNDERTAKINGS: (1) PROMPTLY FOLLOWING NOTICE OFACCEPTANCE OF THE AWC, THE FIRM'S INTERNAL AUDIT DEPARTMENT(OR PERSONNEL NOT DIRECTLY RESPONSIBLE FOR THE FIRM'S ARTICLE VREPORTING OBLIGATIONS AND THEIR IMMEDIATE SUPERVISOR) SHALLCONDUCT AN AUDIT TO ASSESS THE EFFECTIVENESS OF ITS SYSTEM ANDPROCEDURES FOR ENSURING TIMELY FLING OF FORM U4 AND U5AMENDMENTS SUMMARIZING FINDINGS AND RECOMMENDATIONS ANDSHALL FOR THE NEXT FOUR CALENDAR QUARTERS BEGINNING FOURTHQUARTER 2004, CONDUCT A SIMILAR AUDIT AND PREPARE A SIMILARWRITTEN AUDIT REPORT; (2) NO LATER THAN 90 DAYS AFTER NOTICE OFACCEPTANCE OF THIS AWC, AN OFFICER OF THE FIRM SHALL CERTIFY INWRITING TO NASD THAT AN AUDIT WAS CONDUCTED AND THE OFFICERHAS REVIEWED THE CURRENT AUDIT REPORT; (3) NO LATER THAN 60DAYS AFTER THE DATE OF THE CURRENT AUDIT REPORT, AN OFFICERSHALL CERTIFY IN WRITING TO NASD THAT THE FIRM HAS IMPLEMENTED,OR HAS BEGUN TO IMPLEMENT, ANY RECOMMENDATIONS WITHIN ASPECIFIED TIME PERIOD; AND (4) NO LATER THAN 60 DAYS AFTER THELAST DAY OF THE NEXT FOUR QUARTERS, AN OFFICER SHALL CERTIFY INWRITING TO NASD THAT AN AUDIT WAS CONDUCTED, THE CURRENT AUDITREPORT WAS REVIEWED, AND RECOMMENDATIONS IMPLEMENTED, ORBEGUN TO BE IMPLEMENTED. NO LATER THAN SIX MONTHS AFTERNOTICE OF ACCEPTANCE OF THIS AWC, AN OFFICER SHALL CERTIFY INWRITING TO NASD THAT THE FIRM HAS REVIEWED ITS SYSTEM ANDPROCEDURES FOR COMPLYING WITH ITS ARTICLE V REPORTINGOBLIGATIONS AND HAS ESTABLISHED A SYSTEM AND PROCEDURESREASONABLY DESIGNED TO ACHIEVE COMPLIANCE WITH REPORTINGREQUIREMENTS SET FORTH THEREIN.








WITHOUT ADMITTING OR DENYING THE ALLEGATIONS, RESPONDENT FIRMCONSENTED TO THE DESCRIBED SANCTIONS AND TO THE ENTRY OFFINDINGS. THEREFORE, IT WAS CENSURED AND FINED $250,000, WHICHSHALL BE PAID WITHIN 10 DAYS OF NOTICE OF ACCEPTANCE OF THISAWC. IN ADDITION, RESPONDENT FIRM SHALL COMPLY WITH THEFOLLOWING UNDERTAKINGS: (1) PROMPTLY FOLLOWING NOTICE OFACCEPTANCE OF THE AWC, THE FIRM'S INTERNAL AUDIT DEPARTMENT(OR PERSONNEL NOT DIRECTLY RESPONSIBLE FOR THE FIRM'S ARTICLE VREPORTING OBLIGATIONS AND THEIR IMMEDIATE SUPERVISOR) SHALLCONDUCT AN AUDIT TO ASSESS THE EFFECTIVENESS OF ITS SYSTEM ANDPROCEDURES FOR ENSURING TIMELY FLING OF FORM U4 AND U5AMENDMENTS SUMMARIZING FINDINGS AND RECOMMENDATIONS ANDSHALL FOR THE NEXT FOUR CALENDAR QUARTERS BEGINNING FOURTHQUARTER 2004, CONDUCT A SIMILAR AUDIT AND PREPARE A SIMILARWRITTEN AUDIT REPORT; (2) NO LATER THAN 90 DAYS AFTER NOTICE OFACCEPTANCE OF THIS AWC, AN OFFICER OF THE FIRM SHALL CERTIFY INWRITING TO NASD THAT AN AUDIT WAS CONDUCTED AND THE OFFICERHAS REVIEWED THE CURRENT AUDIT REPORT; (3) NO LATER THAN 60DAYS AFTER THE DATE OF THE CURRENT AUDIT REPORT, AN OFFICERSHALL CERTIFY IN WRITING TO NASD THAT THE FIRM HAS IMPLEMENTED,OR HAS BEGUN TO IMPLEMENT, ANY RECOMMENDATIONS WITHIN ASPECIFIED TIME PERIOD; AND (4) NO LATER THAN 60 DAYS AFTER THELAST DAY OF THE NEXT FOUR QUARTERS, AN OFFICER SHALL CERTIFY INWRITING TO NASD THAT AN AUDIT WAS CONDUCTED, THE CURRENT AUDITREPORT WAS REVIEWED, AND RECOMMENDATIONS IMPLEMENTED, ORBEGUN TO BE IMPLEMENTED. NO LATER THAN SIX MONTHS AFTERNOTICE OF ACCEPTANCE OF THIS AWC, AN OFFICER SHALL CERTIFY INWRITING TO NASD THAT THE FIRM HAS REVIEWED ITS SYSTEM ANDPROCEDURES FOR COMPLYING WITH ITS ARTICLE V REPORTINGOBLIGATIONS AND HAS ESTABLISHED A SYSTEM AND PROCEDURESREASONABLY DESIGNED TO ACHIEVE COMPLIANCE WITH REPORTINGREQUIREMENTS SET FORTH THEREIN.

Disclosure 20 of 25

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Initiated By: NASD




Docket/Case Number: C10040012



Allegations: NASD RULES 1021, 2110 - RESPONDENT MEMBER ALLOWED AN INDIVIDUALWHILE NOT REGISTERED WITH NASD AS A PRINCIPAL TO ACT IN THATCAPACITY BY ACTIVELY ENGAGING IN THE MANAGEMENT OF THE FIRM.



Resolution:


No









Sanction Details: WITHOUT ADMITTING OR DENYING THE ALLEGATIONS, AXA ADVISORS, LLCCONSENTED TO THE DESCRIBED SANCTIONS AND TO THE ENTRY OFFINDINGS, THEREFORE, THE FIRM IS CENSURED AND FINED $15,000,$7,500 OF WHICH IS JOINTLY AND SEVERALLY.



Initiated By: NASD


Censure


FINE





Allegations: NASD RULES 1021, 2110 - THE FIRM ALLOWED AN INDIVIDUAL WHILE NOTREGISTERED WITH THE NASD AS A PRINCIPAL TO ACT IN THAT CAPACITYBY ACTIVELY ENGAGING IN THE MANAGEMENT OF THE FIRM.



Resolution:


Sanction Details: WITHOUT ADMITTING OR DENYING THE ALLEGATIONS, THE FIRMCONSENTED TO THE DESCRIBED SANCTIONS AND TO THE ENTRY OFFINDINGS. THEREFORE THE FIRM WAS CENSURED AND FINED $15,000,$7,500 OF WHICH WAS JOINTLY AND SEVERALLY.



Disclosure 21 of 25

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Initiated By: NASD







Allegations: NASD RULES 2110, 2310, 3010 - RESPONDENT MEMBER FAILED TO ENSURETHAT INVESTORS WHO QUALIFIED TO PURCHASE CLASS A SHARES OFMUTUAL FUNDS AT NET ASSET VALUE (NAV) THROUGH THE FUNDS NAVTRANSFER PROGRAM RECEIVED THIS BENEFIT; FIRM REPRESENTATIVESRECOMMENDED UNSUITABLE PURCHASES OF CLASS B SHARES OFMUTUAL FUNDS TO INVESTORS WHO COULD HAVE QUALIFIED FOR THENAV TRANSFER PROGRAM HAD THEY PURCHASED CLASS A SHARES; ANDTHE FIRM, ACTING THROUGH AN INDIVIDUAL, FAILED TO ESTABLISH,MAINTAIN, AND ENFORCE A SUPERVISORY SYSTEM REASONABLYDESIGNED TO IDENTIFY ALL CATEGORIES OF OPPORTUNITIES FORINVESTORS TO PURCHASE MUTUAL FUNDS AT NAV.



Resolution:


Sanction Details: WITHOUT ADMITTING OR DENYING THE ALLEGATIONS, THE FIRMCONSENTED TO THE DESCRIBED SNACTIONS AND TO THE ENTRY OFFINDINGS, THEREFORE, THE FIRM IS CENSURED, FINED $250,000, $50,000OF WHICH IS JOINTLY AND SEVERALLY, AND REQUIRED WITHIN 30 DAYSOF THE EFFECTIVE DATE OF THE AWC TO RETAIN AN INDEPENDENTCONSULTANT TO CONDUCT A COMPREHENSIVE REVIEW OF, AND MAKEWRITTEN RECOMMENDATIONS FOR, THE REVISION OF THE FIRM'SSUPERVISORY AND COMPLIANCE PROCEDURES AND SYSTEMS INCONNECTION WITH THE FIRM'S INVESTMENT COMPANY SECURITIESBUSINESS, INCLUDING ITS DUE DILIGENCE REVIEW OF PRODUCTS; ANDASSESS, EVALUATE, AND CONFIRM THE ADEQUACY OF THE FIRM'SMETHODOLOGY USED TO IDENTIFY AND COMPENSATE INVESTORS WHOQUALIFIED FOR BUT DID NOT RECEIVE THE BENEFIT OF ANY AVAILABLENAV TRANSFER PROGRAM AND ASSESS, EVALUATE, AND CONFIRM THEFIRM'S DETERMINATIONS OF RESTITUTION AMTS IN ACCORDANCE WITHPARAMETERS SET IN THE AWC. WITHIN 90 DAYS THE CONSULTANT SHALLPROVIDE NASD WITH AN INITIAL WRITTEN REPORT; WITHIN 90 DAYS, THECONSULTANT SHALL COMPLETE ITS REVIEW AND PREPARE WRITTENRECOMMENDATIONS; WITHIN 150 DAYS, THE CONSULTANT SHALLPROVIDE NASD WITH A FINAL REPORT SETTING FORTH THE RESULTS OFIMPLEMENTATION OF THE RESTITUTION PLAN.


No







https://www.finra.org/rules-guidance/oversight-enforcement/finra-disciplinary-actions?search=C10040013

www.finra.org/brokercheck User GuidanceWITHOUT ADMITTING OR DENYING THE ALLEGATIONS, THE FIRMCONSENTED TO THE DESCRIBED SNACTIONS AND TO THE ENTRY OFFINDINGS, THEREFORE, THE FIRM IS CENSURED, FINED $250,000, $50,000OF WHICH IS JOINTLY AND SEVERALLY, AND REQUIRED WITHIN 30 DAYSOF THE EFFECTIVE DATE OF THE AWC TO RETAIN AN INDEPENDENTCONSULTANT TO CONDUCT A COMPREHENSIVE REVIEW OF, AND MAKEWRITTEN RECOMMENDATIONS FOR, THE REVISION OF THE FIRM'SSUPERVISORY AND COMPLIANCE PROCEDURES AND SYSTEMS INCONNECTION WITH THE FIRM'S INVESTMENT COMPANY SECURITIESBUSINESS, INCLUDING ITS DUE DILIGENCE REVIEW OF PRODUCTS; ANDASSESS, EVALUATE, AND CONFIRM THE ADEQUACY OF THE FIRM'SMETHODOLOGY USED TO IDENTIFY AND COMPENSATE INVESTORS WHOQUALIFIED FOR BUT DID NOT RECEIVE THE BENEFIT OF ANY AVAILABLENAV TRANSFER PROGRAM AND ASSESS, EVALUATE, AND CONFIRM THEFIRM'S DETERMINATIONS OF RESTITUTION AMTS IN ACCORDANCE WITHPARAMETERS SET IN THE AWC. WITHIN 90 DAYS THE CONSULTANT SHALLPROVIDE NASD WITH AN INITIAL WRITTEN REPORT; WITHIN 90 DAYS, THECONSULTANT SHALL COMPLETE ITS REVIEW AND PREPARE WRITTENRECOMMENDATIONS; WITHIN 150 DAYS, THE CONSULTANT SHALLPROVIDE NASD WITH A FINAL REPORT SETTING FORTH THE RESULTS OFIMPLEMENTATION OF THE RESTITUTION PLAN.


Initiated By: NASD




CENSURE AND UNDERTAKINGS





Allegations: NASD RULES 2110, 2310, 3010 - THE FIRM FAILED TO ENSURE THATINVESTORS WHO QUALIFIED TO PURCHASE CLASS A SHARES OF MUTUALFUNDS AT NET ASSET VALUE (NAV) THROUGH THE FUNDS' NAV TRANSFERPROGRAM RECEIVED THIS BENEFIT; FIRM REPRESENTATIVESRECOMMENDED UNSUITABLE PURCHASES OF CLASS B SHARES OFMUTUAL FUNDS TO INVESTORS WHO COULD HAVE QUALIFIED FOR THENAV TRANSFER PROGRAM HAD THEY PURCHASED CLASS A SHARES; ANDTHE FIRM, ACTING THROUGH AN INDIVIDUAL, FAILED TO ESTABLISH,MAINTAIN AND ENFORCE A SUPERVISORY SYSTEM REASONABLYDESIGNED TO IDENTIFY ALL CATEGORIES OF OPPORTUNITIES FORINVESTORS TO PURCHASE MUTUAL FUNDS AT NAV.






https://www.finra.org/rules-guidance/oversight-enforcement/finra-disciplinary-actions?search=C10040013



Resolution:


Sanction Details: WITHOUT ADMITTING OR DENYING THE ALLEGATIONS, THE FIRMCONSENTED TO THE DESCRIBED SANCTIONS AND TO THE ENTRY OFFINDINGS. THEREFORE THE FIRM IS CENSURED, FINED $250,000, $50,000OF WHICH IS JOINTLY AND SEVERALLY, AND REQUIRED WITHIN 30 DAYSOF THE EFFECTIVE DATE OF THE AWC TO RETAIN AN INDEPENDENTCONSULTANT TO CONDUCT A COMPREHENSIVE REVIEW OF, AND MAKEWRITTEN RECOMMENDATIONS FOR, THE REVISION OF THE FIRM'SSUPERVISORY AND COMPLIANCE PROCEDURES AND SYSTEMS INCONNECTION WITH THE FIRM'S INVESTMENT COMPANY SECURITIESBUSINESS, INCLUDING ITS DUE DILIGENCE REVIEW OF PRODUCTS; ANDASSESS, EVALUATE AND CONFIRM THE ADEQUACY OF THE FIRM'SMETHODOLOGY USED TO IDENTIFY AND COMPENSATE INVESTORS WHOQUALIFIED FOR BUT DID NOT RECEIVE THE BENEFIT OF ANY AVAILABLENAV TRANSFER PROGRAM AND ASSESS, EVALUATE AND CONFIRM THEFIRM'S DETERMINATIONS OF RESTITUTION AMOUNTS IN ACCORDANCEWITH PARAMATERS SET IN THE AWC. WITHIN 90 DAYS THE CONSULTANTSHALL PROVIDE NASD WITH AN INITIAL WRITTEN REPORT; WITHIN 90DAYS, THE CONSULTANT SHALL COMPLETE ITS REVIEW AND PREPAREWRITTEN RECOMMENDATIONS; WITHIN 150 DAYS, THE CONSULTANTSHALL PROVIDE NASD WITH A FINAL REPORT SETTING FORTH THERESULTS OF IMPLEMENTATION OF THE RESTITUTION PLAN.



Disclosure 22 of 25

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Initiated By: VERMONT SECURITIES DIVISION


Docket/Case Number: 02-029-S

Allegations: ALLEGATIONS ARE THAT (1) AXA ADVISORS, LLC EMPLOYED ANDSUPERVISED AN INVESTMENT ADVISER REPRESENTATIVE (CHARLES N.DINKLAGE) WHO WAS NOT REGISTERED IN VERMONT, NOR EXEMPT FROMREGISTRATION; AND (2) FAILED TO MAKE A NOTICE FILING TO THEVERMONT SECURITIES DIVISION THAT INCLUDED INFORMATION ABOUTITS BRANCH OFFICES.










NONE.



Other Product Type(s): AXA ADVISORS, LLC IS A FEDERAL COVERED INVESTMENT ADVISER THATPROVIDES NUMEROUS PRODUCTS AND SERVICES RELATED TOFINANCIAL PLANNING AND INVESTMENT ADVICE.


Resolution:

Other Sanctions Ordered: NONE.

Sanction Details: NOT APPLICABLE

Regulator Statement SEE ABOVE OR CONTACT THE VERMONT SECURITIES DIVISION FORFURTHER DETAILS


Order


Initiated By: VERMONT SECURITIES DIVISION




NONE


Docket/Case Number: 02-029-S


Other Product Type(s): AXA ADVISORS, LLC IS A FEDERAL COVERED INVESTMENT ADVISER THATPROVIDES NUMEROUS PRODUCTS AND SERVICES RELATED TOFINANCIAL PLANNING AND INVESTMENT ADVICE.

Allegations: ALLEGATIONS ARE THAT (1) AXA ADVISORS, LLC EMPLOYED ANDSUPERVISED AN INVESTMENT ADVISER REPRESENTATIVE (CHARLES N.DINKLAGE) WHO WAS NOT REGISTERED IN VERMONT, NOR EXEMPT FROMREGISTRATION; AND (2) FAILED TO MAKE A NOTICE FILING TO THEVERMONT SECURITIES DIVISION THAT INCLUDED INFORMATION ABOUTITS BRANCH OFFICES








NONE


Resolution:

Other Sanctions Ordered: NONE

Sanction Details: NOT APPLICABLE

Firm Statement PLEASE SEE ITEM 7.


Order

Disclosure 23 of 25

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Initiated By: NATIONAL ASSOCIATION OF SECURITIES DEALERS, INC.







Allegations: NASD RULES 1021(A) AND 2110 - RESPONDENT MEMBER ALLOWED APERSON ENGAGED IN THE INVESTMENT BANKING OR SECURITIESBUSINESS OF THE FIRM TO FUNCTION AS A PRINCIPAL, EVEN THOUGHSUCH PERSON WAS NOT REGISTERED WITH NASD IN ANY PRINCIPALCAPACITY).



Resolution:


Sanction Details: WITHOUT ADMITTING OR DENYING THE ALLEGATIONS, EQ FINANCIALCONSULTANTS, INC. CONSENTED TO THE DESCRIBED SANCTIONS AND TOTHE ENTRY OF FINDINGS, THEREFORE, THE FIRM IS CENSURED ANDFINED $2,500.








Sanction Details: WITHOUT ADMITTING OR DENYING THE ALLEGATIONS, EQ FINANCIALCONSULTANTS, INC. CONSENTED TO THE DESCRIBED SANCTIONS AND TOTHE ENTRY OF FINDINGS, THEREFORE, THE FIRM IS CENSURED ANDFINED $2,500.


Initiated By: NATIONAL ASSOCIATION OF SECURITIES DEALERS, INC.


Censure






Allegations: THE NATIONAL ASSOCIATION OF SECURITIES DEALERS ALLEGED THATDURING THE PERIOD FROM ON OR ABOUT 11/26/1996 THROUGH ON ORABOUT 11/01/1997 REGISTRANT ALLOWED A PERSON ENGAGED IN THEINVESTMENT BANKING OR SECURITIES BUSINESS OF THE FIRM TOFUNCTION AS A PRINCIPAL, EVEN THOUGH SUCH PERSON WAS NOTREGISTERED WITH THE ASSOCIATION IN ANY PRINCIPAL CAPACITY INVIOLATION OF RULES 1021(A) AND 2110.



Resolution:


Sanction Details: THE INDIVIDUAL INVOLVED WAS RELIEVED OF ALL SUPERVISORYRESPONSIBILITIES UNTIL SUCH TIME AS THE INDIVIDUAL BECAMEQUALIFIED TO ACT AS A REGISTERED PRINCIPAL. THE FINE OF $2,500.00WAS PAID ON 03/02/1999.

Firm Statement THE NATIONAL ASSOCIATION OF SECURITIES DEALERS ALLEGED THAT ANINDIVIDUAL ASSIGNED WITH SUPERVISORY RESPONSIBILITIES AT ONE OFTHE REGISTRANT'S BRANCH OFFICES HAD BEEN PERMITTED TOFUNCTION AS A PRINCIPAL EVEN THOUGH THE INDIVIDUAL WAS NOTPROPERLY REGISTERED WITH THE ASSOCIATION AS A PRINCIPAL ANDTHUS WAS NOT QUALIFIED TO ACT AS SUCH. THE REGISTRANT AGREEDTO RESOLVE THE MATTER AS DESCRIBED ABOVE.







www.finra.org/brokercheck User GuidanceTHE NATIONAL ASSOCIATION OF SECURITIES DEALERS ALLEGED THAT ANINDIVIDUAL ASSIGNED WITH SUPERVISORY RESPONSIBILITIES AT ONE OFTHE REGISTRANT'S BRANCH OFFICES HAD BEEN PERMITTED TOFUNCTION AS A PRINCIPAL EVEN THOUGH THE INDIVIDUAL WAS NOTPROPERLY REGISTERED WITH THE ASSOCIATION AS A PRINCIPAL ANDTHUS WAS NOT QUALIFIED TO ACT AS SUCH. THE REGISTRANT AGREEDTO RESOLVE THE MATTER AS DESCRIBED ABOVE.

Disclosure 24 of 25

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Initiated By: Kentucky Dept. of Financial Institutions




Docket/Case Number: V97005


Principal Product Type:


Allegations: Failure to Supervise



Resolution:


Sanction Details: Not Provided

Regulator Statement On September 21, 1998, the Department ofFinancial Institutions entered into an agreement with EQFinancial Consultants, Inc. ("EQFC"), an investment advisoryservice and broker-dealer, (formally Equico Securities) and awholly owned subsidiary of Equitable Life Assurance Society ofthe United States ("Equitable") wherein all regulatoryliability EQFC had, or may have had, in connection with theactions of former agent, Lew Perrin McGee(CRD 327535) wasdischarged. McGee had sold promissory notes to his clientswhile employed by EQFC. In the agreement, the Departmentterminated all investigations and any potential proceedingsconcerning supervisory issues wuth EQFC as it related to thesupervision of Mr. McGee. EQFC agreed to take certain steps toimprove its supervisory procedures including periodic on-siteannounced and unannounced examinations of agents offices inKentucky annually. EQFC also agreed to refund the amount ofmoney provided by each investor to Lew Perrin McGee, while hewas employed by the firm, in return for a promissory note, lessany interest paid and any repayments of principal made byMcGee. The compensation to be made to investors by EQFC underthe agreement is around $1.5 million. CONTACT: WILLIAM E. DOYLE(502) 573-3390

Sanctions Ordered: Disgorgement/Restitution

Consent






On September 21, 1998, the Department ofFinancial Institutions entered into an agreement with EQFinancial Consultants, Inc. ("EQFC"), an investment advisoryservice and broker-dealer, (formally Equico Securities) and awholly owned subsidiary of Equitable Life Assurance Society ofthe United States ("Equitable") wherein all regulatoryliability EQFC had, or may have had, in connection with theactions of former agent, Lew Perrin McGee(CRD 327535) wasdischarged. McGee had sold promissory notes to his clientswhile employed by EQFC. In the agreement, the Departmentterminated all investigations and any potential proceedingsconcerning supervisory issues wuth EQFC as it related to thesupervision of Mr. McGee. EQFC agreed to take certain steps toimprove its supervisory procedures including periodic on-siteannounced and unannounced examinations of agents offices inKentucky annually. EQFC also agreed to refund the amount ofmoney provided by each investor to Lew Perrin McGee, while hewas employed by the firm, in return for a promissory note, lessany interest paid and any repayments of principal made byMcGee. The compensation to be made to investors by EQFC underthe agreement is around $1.5 million. CONTACT: WILLIAM E. DOYLE(502) 573-3390


Initiated By: KENTUCKY DEPARTMENT OF FINANCIAL INSTITUTIONS


Undertaking



Docket/Case Number:



Allegations: FAILURE TO SUPERVISE THE ACTIVITIES OF A KENTUCKY RESIDENTREGISTERED REPRESENTATIVE.



Resolution:

Other Sanctions Ordered: WITHOUT ADMITTING ANY WRONGDOING REGISTRANT AGREED TO OFFERCERTAIN INVESTORS PAYMENT OF THE PRINCIPAL AMOUNT OF THEIRINVESTMENT WITH LEW PERRIN MCGEE, A FORMER REGISTEREDREPRESENTATIVE. REGISTRANT ALSO AGREED TO IMPLEMENT CERTAINSUPERVISORY AND REPORTING PROCEDURES RELATING TO KENTUCKYRESIDENT REGISTERED REPRESENTATIVES.

Sanction Details: REGISTRANT OFFERED TO ALL KNOWN PERSONS WHO PURCHASEDSECURITIES FROM ITS FORMER REPRESENTATIVE PRIOR TO MAY 12, 1995TO PAY THE PRINCIPAL AMOUNT OF SUCH INVESTMENT (LESS ANYPAYMENTS OF PRINCIPAL AND/OR INTEREST MADE BY THEREPRESENTATIVE) IN RETURN FOR A RELEASE AND ASSIGNMENT OFCLAIMS. IN ADDITION, REGISTRANT AGREED TO IMPLEMENT CERTAINSUPERVISORY AND REPORTING PROCEDURES RELATING TO KENTUCKYRESIDENT REGISTERED REPRESENTATIVES, INCLUDING UNANNOUNCEDEXAMINATIONS OF EACH REGISTERED REPRESENTATIVE NOT LOCATED INA REGISTERED BRANCH OFFICE, AS WELL AS ANNUAL DISCLOSURE TOTHE KENTUCKY DEPARTMENT OF FINANCIAL INSTITUTIONS OF THENAMES AND ADDRESSES OF EACH REGISTERED REPRESENTATIVE INKENTUCKY, AND THE TERMINATION OF ANY KENTUCKY REPRESENTATIVEBASED ON A FINDING OF UNETHICAL SALES PRACTICES OR OTHER ACTSIN VIOLATION OF A FIDUCIARY OR OTHER PROFESSIONAL OBLIGATION.

Sanctions Ordered:

Settled





www.finra.org/brokercheck User GuidanceREGISTRANT OFFERED TO ALL KNOWN PERSONS WHO PURCHASEDSECURITIES FROM ITS FORMER REPRESENTATIVE PRIOR TO MAY 12, 1995TO PAY THE PRINCIPAL AMOUNT OF SUCH INVESTMENT (LESS ANYPAYMENTS OF PRINCIPAL AND/OR INTEREST MADE BY THEREPRESENTATIVE) IN RETURN FOR A RELEASE AND ASSIGNMENT OFCLAIMS. IN ADDITION, REGISTRANT AGREED TO IMPLEMENT CERTAINSUPERVISORY AND REPORTING PROCEDURES RELATING TO KENTUCKYRESIDENT REGISTERED REPRESENTATIVES, INCLUDING UNANNOUNCEDEXAMINATIONS OF EACH REGISTERED REPRESENTATIVE NOT LOCATED INA REGISTERED BRANCH OFFICE, AS WELL AS ANNUAL DISCLOSURE TOTHE KENTUCKY DEPARTMENT OF FINANCIAL INSTITUTIONS OF THENAMES AND ADDRESSES OF EACH REGISTERED REPRESENTATIVE INKENTUCKY, AND THE TERMINATION OF ANY KENTUCKY REPRESENTATIVEBASED ON A FINDING OF UNETHICAL SALES PRACTICES OR OTHER ACTSIN VIOLATION OF A FIDUCIARY OR OTHER PROFESSIONAL OBLIGATION.

Firm Statement IN APRIL 1995, REGISTRANT TERMINATED LEW PERRIN MCGEE UPONDISCOVERING THAT MCGEE HAD ISSUED PERSONAL PROMISSORY NOTESTO A NUMBER OF INDIVIDUALS IN EXCHANGE FOR CASH, AND HADCONCEALED HIS ACTIVITIES FROM REGISTRANT. MCGEE SUBSEQUENTLYDECLARED BANKRUPTCY, WAS CHARGED WITH CRIMINAL VIOLATIONS,AND WAS SENTENCED TO INCARCERATION FOLLOWING A PLEA OFGUILTY. FOLLOWING ITS INVESTIGATION INTO MCGEE'S CONDUCT, THEKENTUCKY DEPARTMENT OF FINANCIAL INSTITUTIONS ALSO DETERMINEDTHAT MCGEE COMMITTED SECURITIES FRAUD, AND ORDERED MCGEE TOOFFER RESTITUTION, AND ALLEGED THAT REGISTRANT FAILED TOPROPERLY SUPERVISE MCGEE. WITHOUT ADMITTING THE ALLEGATIONS,REGISTRANT AGREED TO RESOLVE THIS AS DESCRIBED ABOVE.

Disclosure 25 of 25

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Initiated By: CONNECTICUT DEPARTMENT OF BANKING




Docket/Case Number: 92-09-2306-BX


Principal Product Type:


Allegations: AGENTS ASSOCIATED WITH THE FIRM ALLEGEDLYEFFECTED SECURITIES TRANSACTIONS THAT WERE NOT RECORDED ONTHEFIRM'S BOOKS.









Resolution:


Sanction Details: PER STIPULATION AND AGREEMENT,THE FIRM AGREED TO1)REVISE AND REVIEW ITS SUPERVISORY PROCEDURES; 2)HIRE A CHIEFCOMPLIANCE OFFICER TO REVIEW FIRM PROCEDURES AND PREPARE AREPORT; 3)IMPLEMENT THE REPORT'S RECOMMENDATIONS ;4)REIMBURSETHE AGENCY FOR THE COSTS OF AN EXAM AND $7,500 IN INVESTIGATIVECOSTS; AND 5) PAY A $17,500 CIVIL PENALTY.

Regulator Statement Not Provided

Sanctions Ordered:



Initiated By: CONNECTICUT DEPARTMENT OF BANKING


Other


FINE AND PAYMENT OF CERTAIN EXPENSES ASSOCIATED WITHINVESTIGATIVE COSTS AND REEXAMINATION.


Docket/Case Number: 92-09-2306-2306-BX

Principal Product Type: Direct Investment(s) - DPP & LP Interest(s)


Allegations: THE CONNECTICUT DEPARTMENT OF BANKING ALLEGED THAT AGENTSASSOCIATED WITH THE REGISTRANT EFFECTED SECURITIESTRANSACTIONS WHICH WERE NOT RECORDED ON THE REGISTRANT'SBOOKS AND RECORDS.



Resolution:

Other Sanctions Ordered: REVIEW FIRM PROCEDURES RELATING TO SALES PRACTICES, ADOPTRECOMMENDATIONS RESULTING FROM THE REVIEW AND SUBMIT AWRITTEN REPORT RELATING TO THE REVIEW TO THE DIRECTOR OF THESECURITIES AND BUSINESS INVESTMENT DIVISION OF THE DEPARTMENTOF BANKING, STATE OF CONNECTICUT.








Other Sanctions Ordered: REVIEW FIRM PROCEDURES RELATING TO SALES PRACTICES, ADOPTRECOMMENDATIONS RESULTING FROM THE REVIEW AND SUBMIT AWRITTEN REPORT RELATING TO THE REVIEW TO THE DIRECTOR OF THESECURITIES AND BUSINESS INVESTMENT DIVISION OF THE DEPARTMENTOF BANKING, STATE OF CONNECTICUT.

Sanction Details: THE FIRM PAID A CIVIL PENALTY OF $17,500.00 ON OR ABOUT 1/4/1993.

Firm Statement THE CONNECTICUT DEPARTMENT OF BANKING ALLEGED THAT CERTAINAGENTS ASSOCIATED WITH THE REGISTRANT EFFECTED LIMITEDPARTNERSHIP SOLICITATIONS AND SALES WHICH WERE NOT RECORDEDON THE REGISTRANT'S BOOKS AND RECORDS. THE FIRM PAID A CIVILPENALTY OF $17,500.00 ON OR ABOUT 1/4/1993 AND AGREED TO REVIEWFIRM PROCEDURES RELATING TO SALES PRACTICES, ADOPTRECOMMENDATIONS RESULTING FROM THE REVIEW AND SUBMIT AWRITTEN REPORT RELATING TO THE REVIEW TO THE DIRECTOR OF THESECURITIES AND BUSINESS INVESTMENT DIVISION OF THE DEPARTMENTOF BANKING, STATE OF CONNECTICUT.






Arbitration Award - Award / Judgment

Brokerage firms are not required to report arbitration claims filed against them by customers; however, BrokerCheckprovides summary information regarding FINRA arbitration awards involving securities and commodities disputesbetween public customers and registered securities firms in this section of the report. The full text of arbitration awards issued by FINRA is available at www.finra.org/awardsonline.

Disclosure 1 of 11


Type of Event: ARBITRATION

Arbitration Forum:

Case Initiated:

Case Number:

Allegations:

Disputed Product Type:

Sum of All Relief Requested:

Disposition:

Disposition Date:

Sum of All Relief Awarded:

NASD

04/10/2000

00-00772

ACCOUNT ACTIVITY-BRCH OF FIDUCIARY DT; ACCOUNT ACTIVITY-OMISSION OF FACTS; ACCOUNT RELATED-BREACH OF CONTRACT;ACCOUNT RELATED-FAILURE TO SUPERVISE

ANNUITIES; DO NOT USE-NO OTHER TYPE OF SEC INVOLVE

$170,000.00

AWARD AGAINST PARTY

05/02/2001

$30,000.00

There may be a non-monetary award associated with this arbitration.Please select the Case Number above to view more detailed information.

Disclosure 2 of 11

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Arbitration Forum:

Case Initiated:

Case Number:

Allegations:


NASD

08/29/2002

02-04831

ACCOUNT ACTIVITY-BRCH OF FIDUCIARY DT; ACCOUNT ACTIVITY-OMISSION OF FACTS; ACCOUNT ACTIVITY-SUITABILITY; ACCOUNTRELATED-FAILURE TO SUPERVISE

ANNUITIES; DO NOT USE-NO OTHER TYPE OF SEC INVOLVE; MUTUALFUNDS 91©2020 FINRA. All rights reserved. Report about AXA ADVISORS, LLC




www.finra.org/awardsonline

https://www.finra.org/arbitration-mediation/arbitration-awards-online?search=00-00772





Disposition:

Disposition Date:


ANNUITIES; DO NOT USE-NO OTHER TYPE OF SEC INVOLVE; MUTUALFUNDS

$250,000.00

AWARD AGAINST PARTY

06/06/2003

$104,000.01


Disclosure 3 of 11

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Arbitration Forum:

Case Initiated:

Case Number:

Allegations:



Disposition:

Disposition Date:


NASD

10/08/2002

02-05063

ACCOUNT ACTIVITY-BRCH OF FIDUCIARY DT; ACCOUNT ACTIVITY-MISREPRESENTATION; ACCOUNT ACTIVITY-OMISSION OF FACTS;ACCOUNT ACTIVITY-SUITABILITY


Unspecified Damages

AWARD AGAINST PARTY

12/08/2003

$17,750.01


Disclosure 4 of 11

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Arbitration Forum:

Allegations:

NASD

ACCOUNT ACTIVITY-BRCH OF FIDUCIARY DT; ACCOUNT ACTIVITY-MISREPRESENTATION; ACCOUNT ACTIVITY-OMISSION OF FACTS;ACCOUNT ACTIVITY-SUITABILITY







Arbitration Forum:

Case Initiated:

Case Number:



Disposition:

Disposition Date:


NASD

01/12/2004

04-00110


$216,076.00

AWARD AGAINST PARTY

03/11/2005

$198,491.12


Disclosure 5 of 11

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Arbitration Forum:

Case Initiated:

Case Number:

Allegations:



Disposition:

Disposition Date:


NASD

12/10/2004

04-07933

ACCOUNT ACTIVITY-BRCH OF FIDUCIARY DT; ACCOUNT ACTIVITY-OMISSION OF FACTS; ACCOUNT RELATED-FAILURE TO SUPERVISE;ACCOUNT RELATED-NEGLIGENCE

DO NOT USE-NO OTHER TYPE OF SEC INVOLVE; UNKNOWN TYPE OFSECURITIES

$13,504,126.00

AWARD AGAINST PARTY

08/31/2006

$842,745.78


Disclosure 6 of 11

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Arbitration Forum:

Case Initiated:

Case Number:

Allegations:



Disposition:

Disposition Date:


FINRA

08/20/2009

09-04142

ACCOUNT ACTIVITY-BRCH OF FIDUCIARY DT; ACCOUNT ACTIVITY-SUITABILITY; ACCOUNT RELATED-FAILURE TO SUPERVISE

COLLATERALIZED MORTGAGE OBLIGATIONS; COMMON STOCK; MUTUALFUNDS; VARIABLE ANNUITIES

$152,701.67

AWARD AGAINST PARTY

05/27/2010

$34,670.44


Disclosure 7 of 11

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Arbitration Forum:

Case Initiated:

Case Number:

Allegations:



Disposition:

Disposition Date:


FINRA

02/13/2015

14-02724

ACCOUNT ACTIVITY-BRCH OF FIDUCIARY DT; ACCOUNT ACTIVITY-CHURNING; ACCOUNT ACTIVITY-MISREPRESENTATION; ACCOUNTACTIVITY-OMISSION OF FACTS; ACCOUNT RELATED-BREACH OFCONTRACT; ACCOUNT RELATED-FAILURE TO SUPERVISE; ACCOUNTRELATED-NEGLIGENCE; ACCOUNT RELATED-OTHER

VARIABLE ANNUITIES

$15,173.22

AWARD AGAINST PARTY

07/28/2015

$9,038.13

There may be a non-monetary award associated with this arbitration.








Please select the Case Number above to view more detailed information.

Disclosure 8 of 11

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Arbitration Forum:

Case Initiated:

Case Number:

Allegations:



Disposition:

Disposition Date:


FINRA

11/30/2016

16-03454

ACCOUNT ACTIVITY-BRCH OF FIDUCIARY DT; ACCOUNT ACTIVITY-MISREPRESENTATION; ACCOUNT ACTIVITY-OMISSION OF FACTS;ACCOUNT RELATED-NEGLIGENCE

ANNUITIES; VARIABLE ANNUITIES

Unspecified Damages

AWARD AGAINST PARTY

04/25/2019

$3,181,834.37


Disclosure 9 of 11

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Arbitration Forum:

Case Initiated:

Case Number:

Allegations:



Disposition:

Disposition Date:

NASD

07/24/1991

91-02214

ACCOUNT ACTIVITY-BRCH OF FIDUCIARY DT; ACCOUNT ACTIVITY-MISREPRESENTATION; ACCOUNT ACTIVITY-SUITABILITY; DO NOT USE-NOOTHER CONTROVERSY INVOLVED

CORPORATE BONDS; DO NOT USE-NO OTHER TYPE OF SEC INVOLVE;MUTUAL FUNDS

$100,000.00

AWARD AGAINST PARTY

08/31/199295©2020 FINRA. All rights reserved. Report about AXA ADVISORS, LLC







Disposition Date:


08/31/1992

$55,000.00


Disclosure 10 of 11

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Arbitration Forum:

Case Initiated:

Case Number:

Allegations:



Disposition:

Disposition Date:


NASD

07/26/1993

93-00921

ACCOUNT ACTIVITY-BRCH OF FIDUCIARY DT; ACCOUNT ACTIVITY-MISREPRESENTATION; ACCOUNT ACTIVITY-OMISSION OF FACTS;ACCOUNT RELATED-NEGLIGENCE

DO NOT USE-NO OTHER TYPE OF SEC INVOLVE; LIMITED PARTNERSHIPS;MUTUAL FUNDS

$395,000.00

AWARD AGAINST PARTY

06/14/1994

$55,200.00


Disclosure 11 of 11

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Arbitration Forum:

Case Initiated:

Case Number:

Allegations:


NASD

07/07/1995

95-03127

ACCOUNT ACTIVITY-BRCH OF FIDUCIARY DT; ACCOUNT ACTIVITY-MISREPRESENTATION; ACCOUNT ACTIVITY-SUITABILITY; ACCOUNTRELATED-FAILURE TO SUPERVISE

DO NOT USE-NO OTHER TYPE OF SEC INVOLVE; LIMITED PARTNERSHIPS96©2020 FINRA. All rights reserved. Report about AXA ADVISORS, LLC









Disposition:

Disposition Date:


DO NOT USE-NO OTHER TYPE OF SEC INVOLVE; LIMITED PARTNERSHIPS

$400,000.00

AWARD AGAINST PARTY

11/01/1996

$212,500.00







End of Report

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