Planmember Securities Corporation

Allegations: NASD RULES 2110, 3010-PLANMEMBER OUTSOURCED ITS MUTUAL FUND BREAKPOINT DETERMINATIONS TO A THIRD PARTY VENDOR. DUE TO A SOFTWARE PROGRAMMING ERROR, PLANMEMBER'S VENDOR FAILED TO TAKE CERTAIN B SHARES INTO CONSIDERATION WHEN DETERMINING PLANMEMBER'S CUSTOMERS' BREAKPOINTS. AS A RESULT, THE FIRM'S CUSTOMERS WERE OVERCHARGED FOR THEIR MUTUAL FUND PURCHASES. DURING THIS PERIOD, THE FIRM DID NOT HAVE IN PLACE ANY SYSTEM OR PROCEDURES FOR SUPERVISING THE VENDOR'S BREAKPOINT DETERMINATIONS. THE FIRM'S DECISION TO OUTSOURCE BREAKPOINT DETERMINATIONS TO A THIRD PARTY DID NOT RELIEVE THE FIRM OF ITS ULTIMATE RESPONSIBILITY FOR THE OUTSOURCED ACTIVITY. DURING THE RELEVANT PERIOD, PLANMEMBER FAILED TO HAVE IN PLACE ADEQUATE POLICIES AND PROCEDURES TO MONITOR THE OUTSIDE VENDOR'S COMPLIANCE WITH THE TERMS OF ITS AGREEMENT WITH THE FIRM, AND TO ASSESS THE OUTSIDE VENDOR'S CONTINUED FITNESS AND ABILITY TO PERFORM THE OUTSOURCED ACTIVITIES. THE FIRM FAILED TO PROPERLY SUPERVISE ITS OUTSIDE VENDOR TO ENSURE THAT IT WAS ADEQUATELY CARRYING OUT THE OUTSOURCED FUNCTIONS. Status: Final Sanction Detail: WITHOUT ADMITTING OR DENYING THE FINDINGS, PLANMEMBER SECURITIES CORPORTION CONSENTED TO THE DESCRIBED SANCTIONS AND TO THE ENTRY OF FINDINGS, THEREFORE IT IS CENSURED AND FINED $20,000. Summary: WITHOUT ADMITTING OR DENYING THE FINDINGS, PLANMEMBER SECURITIES CORPORTION CONSENTED TO THE DESCRIBED SANCTIONS AND TO THE ENTRY OF FINDINGS, THEREFORE IT IS CENSURED AND FINED $20,000.

Allegations: DURING THE PERIOD JULY 2012 AND JUNE 2016, PLANMEMBER FAILED TO ESTABLISH, MAINTAIN, AND ENFORCE A SUPERVISORY SYSTEM, INCLUDING WRITTEN SUPERVISORY PROCEDURES, REASONABLY DESIGNED TO ACHIEVE COMPLIANCE WITH APPLICABLE SECURITIES LAWS AND REGULATIONS, AND WITH APPLICABLE NASD AND FINRA RULES, WITH RESPECT TO FOUR ASPECTS OF ITS BUSINESS: (1) THE REVIEW OF VARIABLE ANNUITY EXCHANGES; (2) THE REVIEW, APPROVAL, AND RETENTION OF CONSOLIDATED REPORTS; (3) THE REVIEW OF E-MAIL AND CUSTOMER CORRESPONDENCE; AND (4) THE REVIEW OF ITS REGISTERED REPRESENTATIVES' BUSINESS-RELATED WEBSITES AND SOCIAL MEDIA. Status: Final Sanction Detail: A FINE OF $90,000.00 WAS LEVIED; THIS FINE WAS PAID ON JULY 27, 2019. Summary: DURING THE PERIOD JULY 2012 TO JUNE 2016, APPLICANT IS ALLEGED TO HAVE FAILED TO ESTABLISH, MAINTAIN, AND ENFORCE A SUPERVISORY SYSTEM REASONABLY DESIGNED TO ACHIEVE COMPLIANCE WITH RESPECT TO FOUR ASPECTS OF ITS BUSINESS: THE REVIEW OF VARIABLE ANNUITY EXCHANGES; THE REVIEW, APPROVAL, AND RETENTION OF CONSOLIDATED REPORTS; THE REVIEW OR E-MAIL AND CUSTOMER CORRESPONDENCE; AND THE REVIEW OR ITS REGISTERED REPRESENTATIVES' BUSINESS-RELATED WEBSITES AND SOCIAL MEDIA IN VIOLATION OF FINRA RULES 3010, 3110, 2330(D)(1), 2210, AND 2010. ON JULY 3, 2019, THE APPLICANT, WITHOUT ADMITTING OR DENYING THE FINDINGS OF FINRA, ENTERED INTO A LETTER OF ACCEPTANCE, WAIVER, AND CONSENT ("AWC") TO SETTLE THE ALLEGED VIOLATIONS. AS CONDITIONS OF ITS SETTLEMENT, THE APPLICANT CONSENTED TO A CENSURE AND A MONETARY FINE OF $90,000.

Allegations: SEC RULE 17A-3, NASD RULES 2830(M)(1), 3110 - APPLICANT RECEIVED CHECKS FROM PUBLIC CUSTOMERS FOR PAYMENT OF DIRECT RETAIL TRANSACTIONS FOR INVESTMENT COMPANY SHARES; SOME OF THE CHECKS WERE NOT TRANSMITTED BY EITHER THE END OF THE THIRD BUSINESS DAY FOLLOWING RECEIPT OF A CUSTOMER'S ORDER TO PURCHASE SUCH SHARES OR BY THE END OF ONE BUSINESS DAY FOLLOWING RECEIPT OF A CUSTOMER'S PAYMENT FOR SUCH SHARES, WHICHEVER WAS THE LATER DATE. WITH RESPECT TO SOME OF TBE CHECKS, THE FIRM FAILED TO MAINTAIN ADEQUATE BOOKS AND RECORDS TO EVIDENCE THE DATE ON WHICH A REGISTERED REPRESENTATIVE BOTH RECEIVED THE CHECK FROM THE CUSTOMER AND FORWARDED THE CHECK TO THE FIRM'S MAIN OFFICE. Status: Final Sanction Detail: WITHOUT ADMITTING OR DENYING THE FINDINGS, THE FIRM CONSENTED TO THE DESCRIBED SANCTION AND TO THE ENTRY OF FINDINGS, THEREFORE, THE FIRM WAS FINED $5,000. Summary: WITHOUT ADMITTING OR DENYING THE FINDINGS, THE FIRM CONSENTED TO THE DESCRIBED SANCTION AND TO THE ENTRY OF FINDINGS, THEREFORE, THE FIRM WAS FINED $5,000.

Allegations: AT TIMES DURING THE PERIOD JANUARY 1, 2014 TO JUNE 30, 2018 (THE "RELEVANT PERIOD"), RESPONDENT PURCHASED, RECOMMENDED, OR HELD FOR ADVISORY CLIENTS MUTUAL FUND SHARE CLASSES THAT CHARGED 12B-1 FEES INSTEAD OF LOWER-COST SHARE CLASSES OF THE SAME FUNDS FOR WHICH THE CLIENTS WERE ELIGIBLE. RESPONDENT AND ITS ASSOCIATED PERSONS RECEIVED 12B-1 FEES IN CONNECTION WITH THESE INVESTMENTS. RESPONDENT FAILED TO DISCLOSE IN ITS FORM ADV OR OTHERWISE THE CONFLICTS OF INTEREST RELATED TO (A) ITS RECEIPT OF 12B-1 FEES, AND/OR (B) ITS SELECTION OF MUTUAL FUND SHARE CLASSES THAT PAY SUCH FEES. DURING THE RELEVANT PERIOD, RESPONDENT AND ITS ASSOCIATED PERSONS RECEIVED 12B-1 FEES FOR ADVISING CLIENTS TO INVEST IN OR HOLD SUCH MUTUAL FUND SHARE CLASSES. Status: Final Sanction Detail: DISGORGEMENT OF $3,168,810.93 AND PREJUDGMENT INTEREST OF $381,849.55 (TOTAL: $3,550,660.48) TO BE PAID TO CLIENTS THROUGH A DISTRIBUTION FUND ESTABLISHED PURSUANT TO THE TERMS OF THE ORDER. THE TOTAL AMOUNT WAS DEPOSITED WITH AN ESCROW AGENT FOR THE DISTRIBUTION FUND ON MARCH 15, 2019. NO CIVIL PENALTY WAS IMPOSED BASED UPON THE APPLICANT'S SELF-REPORT IN THE SCSD INITIATIVE. Summary: AT TIMES DURING THE PERIOD JANUARY 1, 2014 TO JUNE 30, 2018 (THE "RELEVANT PERIOD"), RESPONDENT PURCHASED, RECOMMENDED, OR HELD FOR ADVISORY CLIENTS MUTUAL FUND SHARE CLASSES THAT CHARGED 12B-1 FEES INSTEAD OF LOWER-COST SHARE CLASSES OF THE SAME FUNDS FOR WHICH THE CLIENTS WERE ELIGIBLE. RESPONDENT AND ITS ASSOCIATED PERSONS RECEIVED 12B-1 FEES IN CONNECTION WITH THESE INVESTMENTS. RESPONDENT FAILED TO DISCLOSE IN ITS FORM ADV OR OTHERWISE THE CONFLICTS OF INTEREST RELATED TO (A) ITS RECEIPT OF 12B-1 FEES, AND/OR (B) ITS SELECTION OF MUTUAL FUND SHARE CLASSES THAT PAY SUCH FEES. DURING THE RELEVANT PERIOD, RESPONDENT AND ITS ASSOCIATED PERSONS RECEIVED 12B-1 FEES FOR ADVISING CLIENTS TO INVEST IN OR HOLD SUCH MUTUAL FUND SHARE CLASSES. THE APPLICANT, WITHOUT ADMITTING OR DENYING THE FINDINGS OF THE SEC, SUBMITTED AN OFFER OF SETTLEMENT, WHICH THE SEC ACCEPTED. THE APPLICANT CONSENTED TO THE ENTRY OF AN ORDER INSTITUTING ADMINISTRATIVE AND CEASE-AND-DESIST PROCEEDINGS. PURSUANT TO SECTIONS 203(E) AND 203(K) OF THE INVESTMENT ADVISERS ACT OF 1940, MAKING FINDINGS, AND IMPOSING REMEDIAL SANCTIONS AND A CEASE-AND-DESIST ORDER ON MARCH 22, 2019. AS CONDITIONS OF ITS SETTLEMENT, THE APPLICANT CONSENTED TO THE SANCTIONS DESCRIBED IN ITEM 12, ABOVE.

Allegations: DURING THE PERIOD OCTOBER 2, 2015, THROUGH DECEMBER 31, 2015, APPLICANT IS ALLEGED TO HAVE COMMITTED MUNICIPAL SECURITIES FAIR PRICING AND RELATED SUPERVISION VIOLATIONS WITH RESPECT TO 8 TRANSACTION IN 3 ACCOUNTS, IN VIOLATION OF MUNICIPAL SECURITIES RULEMAKING BOARD ("MSRB") RULES G-17, G-27, AND G-30. Status: Final Sanction Detail: A FINE OF $18,500 ($12,500 FOR THE FAIR PRICING VIOLATIONS AND $6,000 FOR THE SUPERVISION VIOLATIONS) AND RESTITUTION IN THE AMOUNT OF $5,808.25, PLUS INTEREST, WAS LEVIED AGAINST THE APPLICANT. THE TOTAL AMOUNT WAS PAID ON JANUARY 18, 2018. Summary: DURING THE PERIOD OCTOBER 1, 2015, THROUGH DECEMBER 31, 2015, APPLICANT IS ALLEGED TO HAVE COMMITTED MUNICIPAL SECURITIES FAIR PRICING AND RELATED SUPERVISION VIOLATIONS WITH RESPECT TO 8 TRANSACTIONS IN 3 ACCOUNTS, IN VIOLATION OF MSRB RULES G-17, G-27, AND G-30. ON JANUARY 18, 2018, THE APPLICANT, WITHOUT ADMITTING OR DENYING THE FINDINGS OF FINRA, ENTERED INTO A LETTER OF ACCEPTANCE, WAIVER, AND CONSENT ("AWC") TO SETTLE THE ALLEGED VIOLATIONS. AS CONDITIONS OF ITS SETTLEMENT, THE APPLICANT CONSENTED TO THE SANCTIONS DESCRIBED IN ITEM 12., ABOVE.