Trustmont Advisory Group, Inc.

Allegations: FINRA RULE 2010, NASD RULES 2110, 3011(C), 3012, MSRB RULE G-27: A MEMBER FIRM, ACTING THROUGH DOCHINEZ, THE FIRM'S PRESIDENT, CHIEF EXECUTIVE OFFICER (CEO) AND PRINCIPAL, FAILED TO ESTABLISH, MAINTAIN AND ENFORCE AN ADEQUATE SYSTEM OF SUPERVISORY CONTROL POLICIES AND PROCEDURES THAT (A) TESTED AND VERIFIED THAT ITS SUPERVISORY PROCEDURES WERE REASONABLY DESIGNED WITH RESPECT TO THE ACTIVITIES OF THE FIRM AND ITS REGISTERED REPRESENTATIVES AND ASSOCIATED PERSONS TO ACHIEVE COMPLIANCE WITH APPLICABLE SECURITIES LAWS AND REGULATIONS AND (B) CREATED ADDITIONAL OR AMENDED SUPERVISORY PROCEDURES WHERE THE NEED WAS IDENTIFIED BY SUCH TESTING AND VERIFICATION. SPECIFICALLY, THE FIRM'S SUPERVISORY CONTROL POLICIES AND PROCEDURES FAILED TO ADDRESS THESE REQUIREMENTS: DESIGNATING A PRINCIPAL RESPONSIBLE FOR THE FIRM'S SUPERVISORY CONTROL POLICIES AND PROCEDURES; TESTING AND VERIFICATION TO ENSURE REASONABLY-DESIGNED SUPERVISORY PROCEDURES; UPDATING THE FIRM'S WRITTEN SUPERVISORY PROCEDURES TO ADDRESS DEFICIENCIES NOTED DURING TESTING; DESIGNATING A PRINCIPAL RESPONSIBLE FOR THE ANNUAL REPORT TO SENIOR MANAGEMENT ON THE FIRM'S SYSTEM OF SUPERVISORY CONTROLS PROCEDURES, SUMMARY OF TEST RESULTS, SIGNIFICANT IDENTIFIED EXCEPTIONS, AND ANY ADDITIONAL OR AMENDED PROCEDURES; IDENTIFYING PRODUCING MANAGERS AND ASSIGNING QUALIFIED PRINCIPALS TO SUPERVISE SUCH MANAGERS; USING THE "LIMITED SIZE AND RESOURCES" EXCEPTION FOR PRODUCING MANAGERS' SUPERVISION, INCLUDING DOCUMENTING THE FACTORS RELIED ON IN DETERMINING THAT THE EXCEPTION IS NECESSARY; ELECTRONICALLY NOTIFYING FINRA OF ITS RELIANCE ON THE "LIMITED SIZE AND RESOURCES" EXCEPTION; REVIEWING AND MONITORING ALL TRANSMITTALS OF CUSTOMER FUNDS AND SECURITIES; REVIEWING, MONITORING AND VALIDATING CUSTOMER CHANGES OF ADDRESS AND CUSTOMER CHANGES OF INVESTMENT OBJECTIVES; AND PROVIDING HEIGHTENED SUPERVISION OVER THE ACTIVITIES OF EACH PRODUCING MANAGER. IN ADDITION, THE FIRM, ACTING THROUGH DOCHINEZ, FAILED TO CONDUCT INDEPENDENT TESTS OF THE FIRM'S ANTI-MONEY LAUNDERING COMPLIANCE PROGRAM (AMLCP) IN 2007 AND 2008, AS REQUIRED BY NASD RULE 3011. Status: Final Sanction Detail: IF DISPOSITION RESULTED IN A FINE, PENALTY, RESTITUTION, DISGORGEMENT OR MONETARY COMPENSATION, PROVIDE: MONETARY RELATED SANCTION TYPE: CIVIL AND ADMINISTRATIVE PENALTY(IES)/FINE(S) TOTAL AMOUNT: $ 10,000.00 PORTION LEVIED AGAINST THE SUBJECT: $ 10,000.00 PAYMENT PLAN: IS PAYMENT PLAN CURRENT? RADIO BUTTON NOT SELECTED YES RADIO BUTTON NOT SELECTED NO DATE PAID BY THE SUBJECT (MM/DD/YYYY): 06/21/2011 RADIO BUTTON SELECTED EXACT RADIO BUTTON NOT SELECTED EXPLANATION IF NOT EXACT, PROVIDE EXPLANATION: WAS ANY PORTION OF PENALTY WAIVED? RADIO BUTTON NOT SELECTED YES RADIO BUTTON SELECTED NO Summary: FINRA RULE 2010, NASD RULES 2110, 3011(C), 3012, MSRB RULE G-27: A MEMBER FIRM, ACTING THROUGH DOCHINEZ, THE FIRM'S PRESIDENT, CHIEF EXECUTIVE OFFICER (CEO) AND PRINCIPAL, FAILED TO ESTABLISH, MAINTAIN AND ENFORCE AN ADEQUATE SYSTEM OF SUPERVISORY CONTROL POLICIES AND PROCEDURES THAT (A) TESTED AND VERIFIED THAT ITS SUPERVISORY PROCEDURES WERE REASONABLY DESIGNED WITH RESPECT TO THE ACTIVITIES OF THE FIRM AND ITS REGISTERED REPRESENTATIVES AND ASSOCIATED PERSONS TO ACHIEVE COMPLIANCE WITH APPLICABLE SECURITIES LAWS AND REGULATIONS AND (B) CREATED ADDITIONAL OR AMENDED SUPERVISORY PROCEDURES WHERE THE NEED WAS IDENTIFIED BY SUCH TESTING AND VERIFICATION. SPECIFICALLY, THE FIRM'S SUPERVISORY CONTROL POLICIES AND PROCEDURES FAILED TO ADDRESS THESE REQUIREMENTS: DESIGNATING A PRINCIPAL RESPONSIBLE FOR THE FIRM'S SUPERVISORY CONTROL POLICIES AND PROCEDURES; TESTING AND VERIFICATION TO ENSURE REASONABLY-DESIGNED SUPERVISORY PROCEDURES; UPDATING THE FIRM'S WRITTEN SUPERVISORY PROCEDURES TO ADDRESS DEFICIENCIES NOTED DURING TESTING; DESIGNATING A PRINCIPAL RESPONSIBLE FOR THE ANNUAL REPORT TO SENIOR MANAGEMENT ON THE FIRM'S SYSTEM OF SUPERVISORY CONTROLS PROCEDURES, SUMMARY OF TEST RESULTS, SIGNIFICANT IDENTIFIED EXCEPTIONS, AND ANY ADDITIONAL OR AMENDED PROCEDURES; IDENTIFYING PRODUCING MANAGERS AND ASSIGNING QUALIFIED PRINCIPALS TO SUPERVISE SUCH MANAGERS; USING THE "LIMITED SIZE AND RESOURCES" EXCEPTION FOR PRODUCING MANAGERS' SUPERVISION, INCLUDING DOCUMENTING THE FACTORS RELIED ON IN DETERMINING THAT THE EXCEPTION IS NECESSARY; ELECTRONICALLY NOTIFYING FINRA OF ITS RELIANCE ON THE "LIMITED SIZE AND RESOURCES" EXCEPTION; REVIEWING AND MONITORING ALL TRANSMITTALS OF CUSTOMER FUNDS AND SECURITIES; REVIEWING, MONITORING AND VALIDATING CUSTOMER CHANGES OF ADDRESS AND CUSTOMER CHANGES OF INVESTMENT OBJECTIVES; AND PROVIDING HEIGHTENED SUPERVISION OVER THE ACTIVITIES OF EACH PRODUCING MANAGER. IN ADDITION, THE FIRM, ACTING THROUGH DOCHINEZ, FAILED TO CONDUCT INDEPENDENT TESTS OF THE FIRM'S ANTI-MONEY LAUNDERING COMPLIANCE PROGRAM (AMLCP) IN 2007 AND 2008, AS REQUIRED BY NASD RULE 3011.