USA Financial has two disclosures that both resulted from a Civil and Administrative Penalties issued by the state of Florida.
On January 30, 2017, after conducting a branch office examination, the State of Florida Office of Financial Regulation alleged
that we did not follow our written supervisory procedures, as one of our registered representative's Form U4s did not accurately
reflect the name through which the state concluded that he conducted investment related activities. The registered representative
failed to accurately disclose his form of business organization and his affiliation in another entity, as required by our firm's
Outside Business Activity procedures. The State of Florida issued a fine of $7,500, stating that the undisclosed business name
should have been disclosed on appropriate branch office regulatory documents. The state also reported the registered representative's
failure to disclose his outside business activity as a "reportable event."
We believe that the registered representative's business name was accurately reported to us, and that he conducted business through
a variation of his corporate brand — not his business name. We also believe that there was no meaningful risk that the
representative's clients, or the public could be confused by the nuance in the corporate name that had changed. We also believe
that the registered representative's failure to disclose the outside business activity was not the firm's violation of its written
supervisory procedure, but the representative's error. We also believe that such a failure is not necessarily a "reportable event."
USA Financial paid the fine immediately.
On May 8, 2008, the state of Florida Office of Financial Regulation also entered an order finding that USA Financial failed to
properly register eight locations through which securities business was transacted in the state of Florida and levied a $10,000
administrative fine. The state alleged that our branch offices were not registered through the WEBCRD System, shortly after branch
office registration became an electronic process. This error resulted from a technical misunderstanding of the newly instituted
electronic registration process. Our firm was always properly registered as a Broker-Dealer and Registered Investment Advisor,
and the financial professionals who conducted business out of these branch offices were also appropriately registered. USA
Financial promptly paid the fine.
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