Npa Asset Management, 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 SECTIONS 203(E) AND 203(K) OF THE INVESTMENT ADVISERS ACT OF 1940 ("ADVISERS ACT") AGAINST NPA ASSET MANAGEMENT, LLC ("NPA," "RESPONDENT," OR THE "FIRM"). THE COMMISSION FINDS THAT THIS PROCEEDING ARISES FROM SECURITIES LAW VIOLATIONS BY NPA, A REGISTERED INVESTMENT ADVISER, THAT WERE FIRST IDENTIFIED BY STAFF OF THE COMMISSION'S DIVISION OF EXAMINATIONS ("EXAMS") IN SEPTEMBER 2019 AND WHICH THE FIRM SUBSEQUENTLY FAILED TO REMEDIATE IN AN ADEQUATE MANNER. FIRST, FROM AT LEAST APRIL 2017 THROUGH DECEMBER 2019, NPA MAINTAINED FEE-BASED ADVISORY ACCOUNTS WITHOUT MONITORING OR CONDUCTING REVIEWS FOR ACCOUNT SUITABILITY, CONTRARY TO REPRESENTATIONS IN ITS FORM ADV BROCHURES AND IN BREACH OF NPA'S DUTY OF CARE UNDER THE ADVISERS ACT. PRIOR TO OCTOBER 2019, NPA ALSO FAILED TO ADOPT POLICIES OR PROCEDURES REGARDING BOTH THE DETERMINATION OF ADVISORY ACCOUNT SUITABILITY AT THE TIME OF ACCOUNT OPENING AND ONGOING MONITORING FOR ACCOUNT SUITABILITY. AS A RESULT, FROM AT LEAST APRIL 2017 THROUGH DECEMBER 2019, NPA COLLECTED MANAGEMENT FEES ON HUNDREDS OF ADVISORY ACCOUNTS FOR WHICH SUITABILITY MONITORING DID NOT OCCUR AND IN WHICH MINIMAL, IF ANY, TRADING ACTIVITY OCCURRED (I.E., "INACTIVE ACCOUNTS"). IN 2018-19, EXAMS CONDUCTED AN EXAMINATION OF NPA THAT RESULTED IN A SEPTEMBER 2019 DEFICIENCY LETTER (THE "DEFICIENCY LETTER") AND THAT IDENTIFIED, AMONG OTHER ISSUES, INACTIVE AND HIGH-CASH BALANCE ACCOUNTS AS POTENTIAL SUITABILITY CONCERNS. IN OCTOBER 2019, FOLLOWING ITS RECEIPT OF THE DEFICIENCY LETTER, NPA ADOPTED A POLICY CONCERNING ACCOUNT SUITABILITY THAT INCLUDES A REQUIREMENT FOR THE FIRM TO REVIEW INACTIVE ACCOUNTS AND ACCOUNTS WITH HIGH-CASH BALANCES. NPA, HOWEVER, FAILED TO IMPLEMENT THIS POLICY IN AN ADEQUATE MANNER. IN ADDITION, SINCE APRIL 2017, NPA HAS ENGAGED IN APPROXIMATELY 158 FIXED INCOME TRANSACTIONS AND 220 SALES OF CERTAIN REAL ESTATE INVESTMENT TRUST ("REIT") PRODUCTS THROUGH THE PRINCIPAL ACCOUNT OF ITS AFFILIATED BROKER-DEALER WITHOUT PROVIDING ADVANCED WRITTEN NOTICE OR OBTAINING THE REQUIRED CLIENT CONSENTS. FINALLY, NPA FAILED TO ADOPT AND IMPLEMENT WRITTEN COMPLIANCE POLICIES AND PROCEDURES REASONABLY DESIGNED TO PREVENT VIOLATIONS OF THE ADVISERS ACT AND THE RULES THEREUNDER CONCERNING ACCOUNT SUITABILITY AND MONITORING, PRINCIPAL TRADING, AND THE ACCURACY OF ITS CLIENT DISCLOSURES. AS A RESULT OF THIS CONDUCT, NPA WILLFULLY VIOLATED SECTION 206(2), SECTION 206(3), AND SECTION 206(4) OF THE ADVISERS ACT AND RULE 206(4)-7 THEREUNDER. Status: Final Sanction Detail: THE FIRM SHALL CEASE AND DESIST; IS CENSURED; SHALL COMPLY WITH THE UNDERTAKINGS ENUMERATED IN THE ORDER; SHALL RETAIN THE SERVICES OF AN INDEPENDENT COMPLIANCE CONSULTANT; SHALL PAY DISGORGEMENT OF $367,874.12 AND PREJUDGMENT INTEREST OF $43,754.24; AND SHALL PAY A CIVIL MONEY PENALTY IN THE AMOUNT OF $300,000. Summary: RESPONDENT HAS SUBMITTED AN OFFER OF SETTLEMENT (THE "OFFER"), WHICH THE COMMISSION HAS DETERMINED TO ACCEPT.

Allegations: THE SECURITIES AND EXCHANGE COMMISSION DEEMS IT APPROPRIATE AND IN THE PUBLIC INTEREST THAT PUBLIC ADMINISTRATIVE AND CEASE-AND-DESIST PROCEEDINGS BE, AND HEREBY ARE, INSTITUTED AGAINST NATIONWIDE PLANNING ASSOCIATES, INC. (NATIONWIDE), NPA ASSET MANAGEMENT, LLC (NPA), AND BLUE POINT STRATEGIC WEALTH MANAGEMENT, LLC (BLUE POINT), COLLECTIVELY RESPONDENTS. IN ANTICIPATION OF THE INSTITUTION OF THESE PROCEEDINGS, RESPONDENTS HAVE SUBMITTED AN OFFER OF SETTLEMENT WHICH THE COMMISSION HAS DETERMINED TO ACCEPT. THE COMMISSION FINDS THAT THIS MATTER RELATES TO RESPONDENTS' VIOLATIONS OF THE WHISTLEBLOWER PROTECTIONS AFFORDED UNDER EXCHANGE ACT RULE 21F-17(A). FROM MAY 2021 THROUGH FEBRUARY 2024, RESPONDENTS ASKED ELEVEN BROKERAGE CUSTOMERS AND ADVISORY CLIENTS (COLLECTIVELY REFERRED TO AS CLIENTS) TO SIGN CONFIDENTIALITY AGREEMENTS IN CONNECTION WITH COMPENSATORY PAYMENTS AUTHORIZED BY RESPONDENTS TO BE MADE TO THE CLIENTS' INVESTMENT ACCOUNTS. THESE AGREEMENTS CONTAINED PROVISIONS THAT IMPEDED CLIENTS FROM REPORTING POTENTIAL SECURITIES LAW VIOLATIONS TO THE COMMISSION OR ANY OTHER FEDERAL, STATE, OR SELF-REGULATORY SECURITIES COMMISSION OR AUTHORITY, PERMITTING COMMUNICATION ONLY WHERE THE COMMISSION OR OTHER REGULATOR FIRST INITIATED AN INQUIRY. SOME OF THE AGREEMENTS FURTHER REQUIRED THE CLIENTS TO REPRESENT THAT THEY HAD NOT REPORTED THE UNDERLYING DISPUTE TO THE COMMISSION OR TO ANOTHER SECURITIES REGULATOR AND WOULD FOREVER REFRAIN FROM SUCH REPORTING. AS A RESULT OF ITS CONDUCT, RESPONDENTS WILLFULLY VIOLATED EXCHANGE ACT RULE 21F-17(A). Status: Final Sanction Detail: THE FIRM IS ORDERED TO CEASE AND DESIST FROM COMMITTING OR CAUSING ANY VIOLATIONS AND ANY FUTURE VIOLATIONS OF EXCHANGE ACT RULE 21F-17(A), IS CENSURED, AND SHALL PAY A CIVIL MONETARY PENALTY OF $160,000. Summary: RESPONDENTS WILLFULLY VIOLATED EXCHANGE ACT RULE 21F-17(A). ACCORDINGLY, IT IS ORDERED THAT RESPONDENTS CEASE AND DESIST FROM COMMITTING OR CAUSING ANY VIOLATIONS AND ANY FUTURE VIOLATIONS OF EXCHANGE ACT RULE 21F-17(A), ARE CENSURED, AND NATIONWIDE SHALL PAY A CIVIL MONETARY PENALTY OF $160,000.

Allegations: WITHOUT ADMITTING OR DENYING THE FINDINGS, NPA ASSET MANAGEMENT, LLC CONSENTED TO THE SANCTIONS AND TO THE ENTRY OF FINDINGS THAT IT FAILED TO REASONABLY SUPERVISE NOR ADDRESS AN INVESTMENT ADVISER REPRESENTATIVE'S DECEPTIVE PRACTICE OF MAKING UNSUITABLE RECOMMENDATIONS AND NON-COMPLIANCE WITH FIDUCIARY DUTY IN LIGHT OF THE INFORMATION OBTAINED FROM THE CUSTOMER AT THE INVESTMENT ADVISER. THE FIRM ALSO FAILED TO IDENTIFY THAT THE INVESTMENT ADVISER REPRESENTATIVE WAS ENGAGING IN THE DECEPTIVE PRACTICE OF GUARANTEEING ACCOUNTS OF CLIENTS AGAINST LOSSES IN ANY SECURITIES AT THE INVESTMENT ADVISER. AS A RESULT OF THESE SUPERVISORY FAILURES, THE AGENT ENGAGED IN SPECULATIVE TRADING IN STOCKS, INCLUDING MEME INVESTING, PENNY STOCKS, LOW-PRICED SECURITIES, LEVERAGED AND INVERSE EXCHANGE-TRADED FUNDS, AND/OR OPTIONS TRADING, MOST OF THEM ON A DISCRETIONARY BASIS, WITHOUT A REASONABLE BASIS TO BELIEVE THE TRANSACTIONS WERE SUITABLE FOR THE CUSTOMERS IN LIGHT OF THE INFORMATION OBTAINED FROM THEM. MOST OF THE CUSTOMERS' ACCOUNTS WERE IRA OR PENSION PLAN ACCOUNTS OF CLIENTS OVER 60 YEARS OLD, AT OR NEAR RETIREMENT, WITH ANNUAL INCOME BELOW $50,000.00, NET WORTH AND LIQUID NET WORTH BETWEEN $100,000.00 AND $500,000.00, AND MONTHLY WITHDRAWAL INSTRUCTIONS IN PLACE, WHICH WAS INDICATIVE OF A NEED TO DRAW MONTHLY RETIREMENT INCOME FROM INVESTMENTS. Status: Final Sanction Detail: FOR ALL OF THE ABOVE-MENTIONED VIOLATIVE CONDUCT OF NPA, NPAAM, MR. COLLEARY AND MR. SUÁREZ, NPA AND/OR NPAAM, SEVERALLY, AS PROVIDED BELOW, AND NOT JOINTLY, SHALL PAY TO THE OCFI THE TOTAL FINE OF THREE HUNDRED FIFTY THOUSAND DOLLARS ($350,000.00), PAYABLE TO THE OCFI IN EQUAL QUARTERLY PAYMENTS FOR A PERIOD THAT SHALL NOT EXCEED DECEMBER 19, 2025, COUNTED FROM THE DATE OF THIS CONSENT ORDER. NPAAM SHALL BE RESPONSIBLE FOR 90% OF THE FINE AMOUNT ($315,000.00) AND NPA SHALL INDEPENDENTLY BE RESPONSIBLE FOR 10% OF THE FINE AMOUNT ($35,000.00). Summary: WITHOUT ADMITTING OR DENYING THE FINDINGS, NPA ASSET MANAGEMENT, LLC CONSENTED TO THE SANCTIONS AND TO THE ENTRY OF FINDINGS THAT IT FAILED TO REASONABLY SUPERVISE NOR ADDRESS AN INVESTMENT ADVISER REPRESENTATIVE'S DECEPTIVE PRACTICE OF MAKING UNSUITABLE RECOMMENDATIONS AND NON-COMPLIANCE WITH FIDUCIARY DUTY IN LIGHT OF THE INFORMATION OBTAINED FROM THE CUSTOMER AT THE INVESTMENT ADVISER. THE FIRM ALSO FAILED TO IDENTIFY THAT THE INVESTMENT ADVISER REPRESENTATIVE WAS ENGAGING IN THE DECEPTIVE PRACTICE OF GUARANTEEING ACCOUNTS OF CLIENTS AGAINST LOSSES IN ANY SECURITIES AT THE INVESTMENT ADVISER. AS A RESULT OF THESE SUPERVISORY FAILURES, THE AGENT ENGAGED IN SPECULATIVE TRADING IN STOCKS, INCLUDING MEME INVESTING, PENNY STOCKS, LOW-PRICED SECURITIES, LEVERAGED AND INVERSE EXCHANGE-TRADED FUNDS, AND/OR OPTIONS TRADING, MOST OF THEM ON A DISCRETIONARY BASIS, WITHOUT A REASONABLE BASIS TO BELIEVE THE TRANSACTIONS WERE SUITABLE FOR THE CUSTOMERS IN LIGHT OF THE INFORMATION OBTAINED FROM THEM. MOST OF THE CUSTOMERS' ACCOUNTS WERE IRA OR PENSION PLAN ACCOUNTS OF CLIENTS OVER 60 YEARS OLD, AT OR NEAR RETIREMENT, WITH ANNUAL INCOME BELOW $50,000.00, NET WORTH AND LIQUID NET WORTH BETWEEN $100,000.00 AND $500,000.00, AND MONTHLY WITHDRAWAL INSTRUCTIONS IN PLACE, WHICH WAS INDICATIVE OF A NEED TO DRAW MONTHLY RETIREMENT INCOME FROM INVESTMENTS.