Buckman Advisory Group Llc

Allegations: THE SECURITIES AND EXCHANGE COMMISSION ("COMMISSION") DEEMS IT APPROPRIATE AND IN THE PUBLIC INTEREST THAT PUBLIC ADMINISTRATIVE AND CEASE-AND-DESIST PROCEEDINGS BE, AND HEREBY ARE, INSTITUTED PURSUANT TO SECTION 15(B) OF THE SECURITIES EXCHANGE ACT OF 1934 ("EXCHANGE ACT") AND SECTIONS 203(E), 203(F) AND 203(K) OF THE INVESTMENT ADVISERS ACT OF 1940 ("ADVISERS ACT") AGAINST BUCKMAN ADVISORY GROUP, LLC ("BAG" OR "FIRM") AND HARRY J. BUCKMAN, JR. ("BUCKMAN") (TOGETHER, "RESPONDENTS"). THE COMMISSION FINDS THAT FROM JANUARY 2012 UNTIL JUNE 2017 (THE "RELEVANT PERIOD"), BRANDER ENGAGED IN A FRAUDULENT "CHERRYPICKING" SCHEME, DISPROPORTIONATELY ALLOCATING PROFITABLE TRADES TO HIMSELF AND UNPROFITABLE TRADES TO THE ACCOUNTS OF CERTAIN CLIENTS (THE "DISFAVORED ACCOUNTS" AND "DISFAVORED CLIENTS"). BRANDER ALSO OFTEN USED SHARES OF HIGHLY-LEVERAGED AND RISKY EXCHANGE TRADED FUNDS ("ETFS") IN HIS CHERRY-PICKING SCHEME, WITHOUT PERFORMING ANY ANALYSIS TO DETERMINE WHETHER THESE ETFS WERE SUITABLE FOR THE AFFECTED CLIENTS, ALL OF WHOM WERE SEEKING MORE CONSERVATIVE INVESTMENTS. BAG FAILED TO IMPLEMENT POLICIES AND PROCEDURES REASONABLY DESIGNED TO PREVENT VIOLATIONS OF THE ADVISERS ACT AND ITS RULES, AND IT FAILED REASONABLY TO SUPERVISE BRANDER. IN PARTICULAR, IT FAILED TO CONDUCT EFFECTIVE REVIEWS OF BRANDER'S ACTIVITIES, EVEN WHEN THOSE REVIEWS WERE MANDATED BY ITS OWN WRITTEN COMPLIANCE MANUAL, AND IT FAILED TO ENFORCE AS TO BRANDER ITS OWN REQUIREMENT THAT TRADE ALLOCATIONS BE SUBMITTED AT THE SAME TIME TRADE ORDERS WERE PLACED. IN ADDITION, BAG'S FORM ADV INCLUDED STATEMENTS ABOUT ITS PRACTICES AND PROCEDURES THAT WERE FALSE OR MISLEADING IN LIGHT OF THE FIRM'S COMPLIANCE AND SUPERVISION FAILURES. UNTIL DECEMBER 2015, UNDER BAG'S POLICIES AND PROCEDURES, BUCKMAN, IN HIS CIO ROLE, WAS RESPONSIBLE FOR MONITORING BAG'S COMPLIANCE WITH CLIENTS' INVESTMENT PARAMETERS AND FOR REVIEWING TRADES AND LIMITED INVESTMENT OPPORTUNITY ALLOCATIONS, TO ENSURE THAT NO CLIENT ACCOUNT WAS SYSTEMATICALLY DISADVANTAGED. IN ADDITION, FROM 2013 TO 2017, IN BAG'S FORMS DV PART 2A, THE FIRM DISCLOSED THAT BUCKMAN, OR A COMPLIANCE OFFICER WHO REPORTED DIRECTLY TO BUCKMAN, WAS RESPONSIBLE FOR REVIEWING CLIENT ACCOUNTS FOR COMPLIANCE WITH CLIENTS' INVESTMENT GOALS AND RISK TOLERANCE LEVELS. BUCKMAN FAILED TO EFFECTIVELY CARRY OUT THESE RESPONSIBILITIES. BUCKMAN ALLOWED BRANDER TO CREATE PORTFOLIOS FOR HIS CLIENTS THAT DIFFERED FROM THE PRE-APPROVED PORTFOLIOS THAT OTHER BAG INVESTMENT ADVISER REPRESENTATIVES WERE REQUIRED TO USE AND WAS ON NOTICE THAT BRANDER DID NOT ALWAYS ALLOCATE TRADES AT THE TIME ORDERS WERE PLACED, AND HE FAILED TO IMPLEMENT POLICIES AND PROCEDURES REASONABLY DESIGNED TO PREVENT ADVISERS ACT VIOLATIONS ASSOCIATED WITH BRANDER'S MISCONDUCT. HE ALSO FAILED REASONABLY TO SUPERVISE BRANDER. AS A RESULT OF THE CONDUCT DESCRIBED HEREIN, BUCKMAN CAUSED BAG'S VIOLATIONS OF SECTION 206(2) OF THE ADVISERS ACT, WILLFULLY AIDED AND ABETTED AND CAUSED BAG'S VIOLATIONS OF SECTION 206(4) OF THE ADVISERS ACT AND RULE 206(4)-7 THEREUNDER, AND FAILED REASONABLY TO SUPERVISE BRANDER WITHIN THE MEANING OF SECTIONS 203(E)(6) AND 203(F) OF THE ADVISERS ACT WITH A VIEW TO PREVENTING BRANDER'S VIOLATIONS OF SECTION 17(A)(1) OF THE SECURITIES ACT, SECTION 10(B) OF THE EXCHANGE ACT AND RULES 10B-5(A) AND (C) THEREUNDER, AND SECTIONS 206(1) AND 206(2) OF THE ADVISERS ACT. Status: Final Sanction Detail: SUSPENDED FROM SUPERVISORY CAPACITY FOR 12 MONTHS FROM 09/13/2022 TO 09/13/2023 Summary: THE SECURITIES AND EXCHANGE COMMISSION ("COMMISSION") DEEMS IT APPROPRIATE AND IN THE PUBLIC INTEREST THAT PUBLIC ADMINISTRATIVE AND CEASE-AND-DESIST PROCEEDINGS BE, AND HEREBY ARE, INSTITUTED PURSUANT TO SECTION 15(B) OF THE SECURITIES EXCHANGE ACT OF 1934 ("EXCHANGE ACT") AND SECTIONS 203(E), 203(F) AND 203(K) OF THE INVESTMENT ADVISERS ACT OF 1940 ("ADVISERS ACT") AGAINST BUCKMAN ADVISORY GROUP, LLC ("BAG" OR "FIRM") AND HARRY J. BUCKMAN, JR. ("BUCKMAN") (TOGETHER, "RESPONDENTS"). THE COMMISSION FINDS THAT FROM JANUARY 2012 UNTIL JUNE 2017 (THE "RELEVANT PERIOD"), BRANDER ENGAGED IN A FRAUDULENT "CHERRYPICKING" SCHEME, DISPROPORTIONATELY ALLOCATING PROFITABLE TRADES TO HIMSELF AND UNPROFITABLE TRADES TO THE ACCOUNTS OF CERTAIN CLIENTS (THE "DISFAVORED ACCOUNTS" AND "DISFAVORED CLIENTS"). BRANDER ALSO OFTEN USED SHARES OF HIGHLY-LEVERAGED AND RISKY EXCHANGE TRADED FUNDS ("ETFS") IN HIS CHERRY-PICKING SCHEME, WITHOUT PERFORMING ANY ANALYSIS TO DETERMINE WHETHER THESE ETFS WERE SUITABLE FOR THE AFFECTED CLIENTS, ALL OF WHOM WERE SEEKING MORE CONSERVATIVE INVESTMENTS. BAG FAILED TO IMPLEMENT POLICIES AND PROCEDURES REASONABLY DESIGNED TO PREVENT VIOLATIONS OF THE ADVISERS ACT AND ITS RULES, AND IT FAILED REASONABLY TO SUPERVISE BRANDER. IN PARTICULAR, IT FAILED TO CONDUCT EFFECTIVE REVIEWS OF BRANDER'S ACTIVITIES, EVEN WHEN THOSE REVIEWS WERE MANDATED BY ITS OWN WRITTEN COMPLIANCE MANUAL, AND IT FAILED TO ENFORCE AS TO BRANDER ITS OWN REQUIREMENT THAT TRADE ALLOCATIONS BE SUBMITTED AT THE SAME TIME TRADE ORDERS WERE PLACED. IN ADDITION, BAG'S FORM ADV INCLUDED STATEMENTS ABOUT ITS PRACTICES AND PROCEDURES THAT WERE FALSE OR MISLEADING IN LIGHT OF THE FIRM'S COMPLIANCE AND SUPERVISION FAILURES. UNTIL DECEMBER 2015, UNDER BAG'S POLICIES AND PROCEDURES, BUCKMAN, IN HIS CIO ROLE, WAS RESPONSIBLE FOR MONITORING BAG'S COMPLIANCE WITH CLIENTS' INVESTMENT PARAMETERS AND FOR REVIEWING TRADES AND LIMITED INVESTMENT OPPORTUNITY ALLOCATIONS, TO ENSURE THAT NO CLIENT ACCOUNT WAS SYSTEMATICALLY DISADVANTAGED. IN ADDITION, FROM 2013 TO 2017, IN BAG'S FORMS DV PART 2A, THE FIRM DISCLOSED THAT BUCKMAN, OR A COMPLIANCE OFFICER WHO REPORTED DIRECTLY TO BUCKMAN, WAS RESPONSIBLE FOR REVIEWING CLIENT ACCOUNTS FOR COMPLIANCE WITH CLIENTS' INVESTMENT GOALS AND RISK TOLERANCE LEVELS. BUCKMAN FAILED TO EFFECTIVELY CARRY OUT THESE RESPONSIBILITIES. BUCKMAN ALLOWED BRANDER TO CREATE PORTFOLIOS FOR HIS CLIENTS THAT DIFFERED FROM THE PRE-APPROVED PORTFOLIOS THAT OTHER BAG INVESTMENT ADVISER REPRESENTATIVES WERE REQUIRED TO USE AND WAS ON NOTICE THAT BRANDER DID NOT ALWAYS ALLOCATE TRADES AT THE TIME ORDERS WERE PLACED, AND HE FAILED TO IMPLEMENT POLICIES AND PROCEDURES REASONABLY DESIGNED TO PREVENT ADVISERS ACT VIOLATIONS ASSOCIATED WITH BRANDER'S MISCONDUCT. HE ALSO FAILED REASONABLY TO SUPERVISE BRANDER. AS A RESULT OF THE CONDUCT DESCRIBED HEREIN, BUCKMAN CAUSED BAG'S VIOLATIONS OF SECTION 206(2) OF THE ADVISERS ACT, WILLFULLY AIDED AND ABETTED AND CAUSED BAG'S VIOLATIONS OF SECTION 206(4) OF THE ADVISERS ACT AND RULE 206(4)-7 THEREUNDER, AND FAILED REASONABLY TO SUPERVISE BRANDER WITHIN THE MEANING OF SECTIONS 203(E)(6) AND 203(F) OF THE ADVISERS ACT WITH A VIEW TO PREVENTING BRANDER'S VIOLATIONS OF SECTION 17(A)(1) OF THE SECURITIES ACT, SECTION 10(B) OF THE EXCHANGE ACT AND RULES 10B-5(A) AND (C) THEREUNDER, AND SECTIONS 206(1) AND 206(2) OF THE ADVISERS ACT.

Allegations: VIOLATED SECTION 206(2) OF THE ADVISERS ACT,VIOLATED SECTION 206(4) OF THE ADVISERS ACT AND RULE 206(4)-7, SECTION 206(2), SECTIONS 203(E)(6) AND 203(F) Status: Final Sanction Detail: NONE Summary: FROM JANUARY 2012 UNTIL JUNE 2017 FAILED TO REASONABLY IMPLEMENT ITS WRITTEN POLICIES AND PROCEDURES WITH REGARD TO ACCOUNT AND TRADE REVIEWS, AND IN PARTICULAR WITH REGARD TO REVIEWS AS TO EQUITABLE ALLOCATION OF TRADES AND SUITABILITY.