Madison Avenue Securities, Llc

Allegations: WITHOUT ADMITTING OR DENYING THE FINDINGS, THE FIRM CONSENTED TO THE SANCTIONS AND TO THE ENTRY OF FINDINGS THAT IT FAILED TO HAVE EITHER WRITTEN PROCEDURES OR A SUPERVISORY SYSTEM IN PLACE PERTAINING TO THE CREATION AND DISSEMINATION OF CONSOLIDATED REPORTS. THE FINDINGS STATED THAT 39 OF THE FIRM'S APPROXIMATELY 140 REGISTERED REPRESENTATIVES USED MULTIPLE SYSTEMS TO PREPARE AND DISTRIBUTE CONSOLIDATED REPORTS TO CUSTOMERS. TEMPLATES USED BY 21 OF THE REGISTERED REPRESENTATIVES ALLOWED FOR MANUAL ENTRY OF ACCOUNT INFORMATION. THE FIRM DISTRIBUTED APPROXIMATELY 6,800 CONSOLIDATED REPORTS TO CUSTOMERS, AND APPROXIMATELY 4,500 OF THOSE CONSOLIDATED REPORTS WERE GENERATED USING TEMPLATES THAT ALLOWED FOR MANUAL ENTRIES. ALTHOUGH MOST OF THE CONSOLIDATED REPORTS CONTAINED ADEQUATE DISCLOSURE, THE TEMPLATES USED BY 7 REPRESENTATIVES DID NOT. THE FIRM IMPLEMENTED PROCEDURES RELATING TO CONSOLIDATED REPORTS THAT REQUIRED REPRESENTATIVES TO, AMONG OTHER ITEMS, SUBMIT TEMPLATES TO THE COMPLIANCE DEPARTMENT PRIOR TO USE AND PROVIDED FOR THE REVIEW OF CONSOLIDATED REPORTS DURING ANNUAL BRANCH EXAMINATIONS. THESE PROCEDURES, HOWEVER, WERE NOT CONSISTENTLY ENFORCED AND WERE INADEQUATE IN THAT THEY DID NOT PROVIDE FOR VERIFICATION OF MANUALLY ENTERED ACCOUNT ASSETS OR VALUATION INFORMATION. FURTHER, APPROXIMATELY 2,300 CONSOLIDATED REPORTS WERE NEITHER REVIEWED NOR RETAINED BY THE FIRM. Status: Final Sanction Detail: THE FIRM WAS CENSURED AND FINED $75,000 AND THE FINE WAS PAID IN FULL ON 12/5/2016.

Allegations: SEE CONSENT ORDER Status: Final Sanction Detail: FIRM IS REQUIRED TO MAKE A MONETARY PAYMENT OF $20,000 TO THE SECURITIES AUDIT AND ENFORCEMENT FUND PAYABLE TO THE SECRETARY OF STATE WITHIN 30 DAYS OF THE DATE OF ENTRY OF THE CONSENT ORDER. FOR FURTHER INFORMATION SEE CONSENT ORDER. Summary: THE NOTICE OF HEARING WAS ISSUED OCTOBER 18, 2011. AMENDED NOTICE OF HEARING WAS ISSUED MAY 23, 2014. CONSENT ORDER WAS ISSUED JUNE 19, 2015. SEE CONSENT ORDER FOR DETAILS.

Allegations: THE SEC ALLEGED THAT MADISON AVENUE SECURITIES (MAS) DID NOT ADEQUATELY DISCLOSE THE CONFLICT OF INTEREST THAT EXISTED WHEN IT RECOMMENDED SWEEP ACCOUNT MONEY MARKET FUND OPTIONS TO ITS ADVISORY CLIENTS AND CERTAIN MUTUAL FUNDS, INCLUDING NO TRANSACTION FEE (NTF) MUTUAL FUNDS, THAT PAID A 12B-1 FEE OR A SHAREHOLDER SERVICE FEE, WHICH IN SOME CASES, WERE NOT REBATED BACK TO THE CLIENTS DUE TO AN OPERATIONAL ERROR. Status: Final Sanction Detail: ON 6/8/2022, MAS DEPOSITED A TOTAL OF $803,173.69, WHICH INCLUDED DISGORGEMENT OF $579,523.76 PREJUDGMENT INTEREST OF $73,649.93 AND CIVIL MONEY PENALTY OF $150,000 (THE "FAIR FUNDS") IN AN ESCROW ACCOUNT AT A FINANCIAL INSTITUTION NOT UNACCEPTABLE TO THE SEC FOR DISTRIBUTION TO AFFECTED CLIENTS AND THE SEC IN CONFORMITY WITH THE ADMINISTRATIVE ORDER. Summary: WITHOUT ADMITTING OR DENYING THE FINDINGS, MAS AGREED TO CERTAIN UNDERTAKING, A CEASE AND DESIST ORDER, A CENSURE, AND THE PAYMENT OF THE FAIR FUNDS (DESCRIBED ABOVE) OUT OF THE ESCROW ACCOUNT TO THE APPROPRIATE PARTIES IN CONFORMITY WITH ORDER.

Allegations: THE SEC ALLEGED THAT MADISON AVENUE SECURITIES (MAS) DID NOT ADEQUATELY DISCLOSE THE CONFLICT OF INTEREST THAT EXISTED WHEN IT RECOMMENDED SWEEP ACCOUNT MONEY MARKET FUND OPTIONS TO ITS ADVISORY CLIENTS AND CERTAIN MUTUAL FUNDS, INCLUDING NO TRANSACTION FEE (NTF) MUTUAL FUNDS, THAT PAID A 12B-1 FEE OR A SHAREHOLDER SERVICE FEE, WHICH, IN SOME CASES, WERE NOT REBATED BACK TO THE CLIENTS DUE TO AN OPERATIONAL ERROR. Status: Final Sanction Detail: ON 6/8/2022, MAS DEPOSITED A TOTAL OF $803,173.69, WHICH INCLUDED DISGORGEMENT OF $579,523.76, PREJUDGMENT INTEREST OF $73,649.93, AND CIVIL MONEY PENALTY OF $150,000 (THE "FAIR FUNDS") IN AN ESCROW ACCOUNT AT A FINANCIAL INSTITUTION NOT UNACCEPTABLE TO THE SEC FOR DISTRIBUTION TO AFFECTED CLIENTS AND THE SEC IN CONFORMITY WITH THE ADMINISTRATIVE ORDER. Summary: WITHOUT ADMITTING OR DENYING THE FINDINGS, MAS AGREED TO CERTAIN UNDERTAKING, A CEASE AND DESIST ORDER, A CENSURE AND THE PAYMENT OF THE FAIR FUNDS (DESCRIBED ABOVE) OUT OF THE ESCROW ACCOUNT TO THE APPROPRIATE PARTIES IN CONFORMITY WITH THE ORDER.

Allegations: FINRA RULE 2010, NASD RULES 2110, 3010, 3040(C), 3110: A REGISTERED REPRESENTATIVE OF THE FIRM PARTICIPATED IN PRIVATE SECURITIES TRANSACTIONS WHEN PARTICIPATING IN THE OFFER AND SALE OF PRIVATE PLACEMENT OFFERINGS. THE FIRM FAILED TO RECORD THE TRANSACTIONS OF THE PRIVATE PLACEMENT OFFERINGS ON ITS BOOKS AND RECORDS AND FAILED TO ADEQUATELY SUPERVISE HIS CONDUCT WITH RESPECT TO THESE PRIVATE SECURITIES TRANSACTIONS. Status: Final Sanction Detail: WITHOUT ADMITTING OR DENYING THE FINDINGS, THE FIRM CONSENTED TO THE DESCRIBED SANCTIONS AND TO THE ENTRY OF FINDINGS, THEREFORE THE FIRM IS CENSURED AND FINED $12,500.

Allegations: WITHOUT ADMITTING OR DENYING THE FINDINGS, THE FIRM CONSENTED TO THE SANCTIONS AND TO THE ENTRY OF FINDINGS THAT IT FAILED TO ESTABLISH, MAINTAIN, AND ENFORCE A SUPERVISORY SYSTEM, INCLUDING WSPS, REASONABLY DESIGNED TO SUPERVISE MUTUAL FUND TRANSACTIONS THAT THE FIRM'S REPRESENTATIVES EFFECTED THROUGH ITS ELECTRONIC ORDER ENTRY SYSTEM TO CONFIRM THE SUITABILITY OF THE TRANSACTIONS REGARDING POTENTIAL AVAILABLE SALES CHARGE DISCOUNTS. THE FINDINGS STATED THAT THE FIRM USED A PROCESS CALLED A T-PLUS 1 REVIEW WHERE FIRM PRINCIPALS MANUALLY REVIEWED MUTUAL FUND TRANSACTIONS SUBMITTED THROUGH THE ELECTRONIC ORDER ENTRY SYSTEM THE DAY AFTER THE TRANSACTION. THE FIRM USED AN ELECTRONIC TRADE MONITORING PROGRAM FOR THE FIRM'S SUITABILITY REVIEW OF TRANSACTIONS ENTERED INTO THE ELECTRONIC ORDER ENTRY SYSTEM, ALONG WITH A PRINCIPAL'S REVIEW OF THE TRADE MONITORING PROGRAM'S SURVEILLANCE ALERTS, INCLUDING FOR "FUND FAMILY DIVERSIFICATION." NEITHER THE T-PLUS-1 OR SURVEILLANCE ALERT REVIEW PROCESS ALLOWED FOR REASONABLE REVIEW OF THE SUITABILITY OF CUSTOMERS' PURCHASES OF MUTUAL FUNDS IN MULTIPLE DIFFERENT MUTUAL FUND FAMILIES, EITHER SIMULTANEOUSLY OR SEQUENTIALLY, RESULTING IN MISSED SALES CHARGE DISCOUNTS. NEITHER PROCESS INCLUDED A REVIEW OF CUSTOMERS' MUTUAL FUNDS HOLDINGS PURCHASED AWAY FROM THE FIRM THAT COULD HAVE BEEN USED TO ACHIEVE SALES CHARGE DISCOUNTS THROUGH A RIGHT OF ACCUMULATION. FURTHER, 12 FIRM CUSTOMER HOUSEHOLDS PURCHASED MUTUAL FUNDS IN MULTIPLE DIFFERENT MUTUAL FUND FAMILIES, EITHER SIMULTANEOUSLY OR SEQUENTIALLY, IN TRANSACTIONS SUBMITTED THROUGH THE THE ELECTRONIC ORDER ENTRY SYSTEM. THESE CUSTOMERS' SALES CHARGES WOULD HAVE BEEN REDUCED HAD THEY PURCHASED MUTUAL FUNS ALL WITHIN ONE MUTUAL FUND FAMILY, RATHER THAN AMONG SEVER FUND FAMILIES. IN ADDITION TO THOSE CUSTOMERS, ANOTHER CUSTOMER SIMULTANEOUSLY PURCHASED SIX MUTUAL FUNDS IN FIVE DIFFERENT MUTUAL FUND FAMILIES AT THE RECOMMENDATION OF A FIRM REGISTERED REPRESENTATIVE IN TRANSACTIONS SUBMITTED VIA THE FIRM'S ELECTRONIC ORDER ENTRY SYSTEM. AT THE TIME, THE CUSTOMER ALREADY HELD MUTUAL FUNDS AWAY FROM THE FIRM. ALTHOUGH THE STRATEGY INVOLVED HIGHLY-RATED FUNDS, THE CUSTOMER'S SALES CHARGES WOULD HAVE BEEN REDUCED IF HE HAD PURCHASED MUTUAL FUNDS IN ONE MUTUAL FUND FAMILY AND REDUCED EVEN FURTHER IF HE HAD INVESTED IN THE MUTUAL FUND FAMILY OF THE FUNDS HE HELD AWAY FROM THE FIRM. THIS CUSTOMER WAS COMPENSATED FOR THE MISSED SALES CHARGES DISCOUNTS THROUGH A SEPARATE SETTLEMENT. THE FIRM HAS SINCE REVISED ITS SUPERVISORY SYSTEM, INCLUDING WSPS, REGARDING MUTUAL FUND SUPERVISION, INCLUDING FURTHER DESCRIBING THE T-PLUS-1 AND SURVEILLANCE ALERT REVIEW PROCESSES FOR MUTUAL FUND TRANSACTIONS. Status: Final Sanction Detail: THE FIRM WAS CENSURED, FINED $50,000 AND ORDERED TO PAY $63,296, PLUS INTEREST, IN RESTITUTION TO CUSTOMERS. Summary: THIS MATTER INVOLVED 13 ACCOUNTS (THE FIRM HAD OVER 15,000 ACCOUNTS AT THE TIME OF THE ACTIVITY) AND TRANSACTIONS THAT TOOK PLACE MORE THAN FIVE YEARS AGO. AS DESCRIBED IN THE AWC, THE FIRM HAS SINCE TAKEN CORRECTIVE ACTION RELATED TO ITS SUPERVISORY SYSTEM REGARDING MUTUAL FUND SALES.

Allegations: SURING THE PERIOD 2014 THROUGH 2017, MADISON AVENUE SECURITIES, LLC FAILED TO ESTABLISH, MAINTAIN AND ENFORCE A SUPERVISORY SYSTEM TO SUPERVISE THE ACTIVITIES OF ITS AGENTS RELATING TO THE SALE OF CERTAIN ALTERNATIVE INVESTMENTS. SPECIFICALLY, AFTER ADOPTING DIFFERENT BRANCH OFFICE SPECIFIC GUIDELINES FOR ONE FORM AGENT, THE FIRM DID NOT CONSISTENTLY APPLY AN ALTERNATIVE INVESTMENT ACCOUNT SCORE WORKSHEET, WHICH WAS USED TO ASSESS COMPLIANCE FOR PURCHASES OF ALTERNATIVE INVESTMENT SALES. THE FIRM ALSO FAILED TO CREATE A NEW TOOL TO MONITOR FOR THE BRANCH-OFFICE SPECIFIC COMPLIANCE OF ALTERNATIVE INVESTMENT SALES. PURSUANT TO SECTION 4007.106 (A)(3) OF THE TEXAS SECURITIES ACT, THE FIRM'S VIOLATIONS OF 115.10 OF THE BOARD RULES CONSTITUTE A BASIS FOR THE ASSESSMENT OF AN ADMINISTRATIVE FINE AGAINST THE FIRM. IT WAS ORDERED THAT MADISON AVENUE SECURITIES, LLC PAY AN ADMINISTRATIVE FINE IN THE AMOUNT OF $20,000 TO THE GENERAL FUND OF THE STATE OF TEXAS WITHIN 10 DAYS OF THE ORDER. IT WAS ALSO ORDERED THAT MADISON AVENUE SECURITIES, LLC COMPLY WITH THE TERMS OF AN UNDERTAKING WITH THE TEXAS STATE SECURITIES BOARD. Status: Final Sanction Detail: NONE Summary: NONE

Allegations: THE INDIANA SECRETARY OF STATE, SECURITIES DIVISION ALLEGES THAT FROM APPROXIMATELY AUGUST TO NOVEMBER 2010, MADISON AVENUE SECURITIES, INC. ("MAS") ENGAGED IN A DISHONEST AND UNETHICAL PRACTICE BY FAILING TO SUPERVISE AGENT KEITH D. ROBINSON ("ROBINSON") WHEN IT APPROVED THE ADVERTISEMENTS AND/OR INVITATIONS OF ROBINSON FOR SEMINARS TO POTENTIAL CLIENTS WHICH STATED THAT ROBINSON WAS A "SEASONED INVESTMENT ADVISOR," ALTHOUGH ROBINSON HAS NEVER BEEN REGISTERED AS AN INVESTMENT ADVISER OR INVESTMENT ADVISER REPRESENTATIVE IN THE STATE OF INDIANA IN VIOLATION OF IND. CODE § 23-19-4-12(D)(13) AND 710 IAC 4-10-1(22). Status: Final Sanction Detail: MAS PAID A CIVIL PENALTY OF $1,500 ON OR ABOUT JUNE 22, 2011.