Bbva Global Wealth Advisors, Inc.

Allegations: BANCO BILBAO VIZCAYA ARGENTARIA, S.A. (BBVA), A U.S. BANK HOLDING COMPANY, THROUGH ITS SUBSIDIARY, BBVA SECURITIES INC. (BSI) ENGAGES IN LIMITED SECURITIES UNDERWRITING AND DEALING ACTIVITIES AS AUTHORIZED BY THE BOARD OF GOVERNORS OF THE FEDERAL RESERVE SYSTEM (BOARD) UNDER THE BANK HOLDING COMPANY ACT. UNDER THAT LIMITED AUTHORITY, A U.S. BANK HOLDING COMPANY MAY ENGAGE IN SECURITIES UNDERWRITING AND DEALING ACTIVITIES SUBJECT TO RESTRICTIONS ON THE AMOUNT OF GROSS REVENUES DERIVED FROM THOSE ACTIVITIES AND SUBJECT TO CERTAIN OTHER REGULATORY CONDITIONS AND REQUIREMENTS. THE CONSENT ORDER RELATES TO THE BOARD'S FINDINGS THAT (A) DURING CERTAIN PERIODS, BBVA AND BSI IMPROPERLY CLASSIFIED CERTAIN TYPES OF REVENUES FROM SECURITIES UNDERWRITING AND DEALING ACTIVITIES (RESULTING IN VIOLATIONS OF THE APPLICABLE REVENUE LIMIT), FILED INACCURATE REPORTS WITH THE BOARD, FAILED TO ABIDE BY CERTAIN LEGAL AND REGULATORY REQUIREMENTS IN CONNECTION WITH INTERAFFILIATE LENDING TRANSACTIONS, AND FAILED TO ADEQUATELY CONTROL AND SUPERVISE THE FOREGOING ACTIVITIES, AND (B) DURING CERTAIN PERIODS BBVA ENGAGED IN IMPERMISSIBLE SECURITIES UNDERWRITING AND DEALING ACTIVITIES IN THE UNITED STATES WITH THE REQUIRED BOARD APPROVAL Status: Final Sanction Detail: CIVIL MONEY PENALTY PAID TO THE BOARD OF GOVERNORS OF THE FEDERAL RESERVE SYSTEM, ASSESSED AGAINST APPLICANT (BBVA SECURITIES INC. AND ITS ULTIMATE PARENT COMPANY, BBVA S.A.). RESOLUTION DATE OF THE MATTER WAS DEC 19TH 2016. Summary: ON DECEMBER 19, 2016, BANCO BILBAO ARGENTARIA, S.A., BILBAO, SPAIN (BBVA) AND ITS SUBSIDIARY, BBVA SECURITIES INC. (BSI) ENTERED INTO A CONSENT ORDER OF ASSESSMENT OF A CIVIL MONEY PENALTY WITH THE BOARD OF GOVERNORS OF THE FEDERAL RESERVE SYSTEM (BOARD), UNDER WITH THE BOARD ASSESSED A CIVIL MONEY PENALTY OF $27 MILLION AGAINST BBVA AND BSI . BBVA, A U.S. BANK HOLDING COMPANY, ENGAGES IN LIMITED SECURITIES UNDERWRITING AND DEALING ACTIVITIES, THROUGH BSI, PURSUANT TO AUTHORITY GRANTED BY THE BOARD UNDER THE BANK HOLDING COMPANY ACT (BHC ACT), AND SUBJECT TO, AMONG OTHER THINGS, RESTRICTIONS ON THE AMOUNT OF GROSS REVENUES DERIVED FROM THOSE ACTIVITIES AND CERTAIN OTHER CONDITIONS AND REQUIREMENTS IMPOSED BY THE BOARD BY ORDER (THE OPERATING STANDARDS) OR UNDER BOARD REGULATIONS. THE CIVIL MONEY PENALTY WAS ASSESSED JOINTLY AND SEVERALLY AGAINST BBVA AND BSI. THE CONSENT ORDER RELATED TO THE FOLLOWING FINDINGS OF THE BOARD (WHICH THE BOARD DETERMINED RESULTED IN UNSAFE AND UNSOUND PRACTICES, VIOLATIONS OF SECTION 4 OF THE BHC ACT, SECTION 5(C) OF THE BHC ACT, BOARD OPERATING STANDARD 8 (AND RELATED PROVISIONS OF THE FEDERAL RESERVE ACT), THE BOARD'S REGULATION K AND CONDITIONS AND COMMITMENTS APPLICABLE TO BBVA UNDER BOARD ORDERS): (A) (1) DURING THE PERIOD FROM JULY 1, 2008 AND CONTINUING THROUGH MARCH 31, 2013, BBVA AND BSI IMPROPERLY CLASSIFIED CERTAIN TYPES OF REVENUES, RESULTING IN VIOLATIONS OF THE APPLICABLE REVENUE LIMITS ON THEIR SECURITIES UNDERWRITING AND DEALING ACTIVITIES UNDER FEDERAL BANKING LAWS, (2) FOR THE PERIOD INCLUDING AT LEAST JULY 1, 2008 UNTIL JUNE 30, 2012, BBVA AND BSI FILED INACCURATE REPORTS WITH THE BOARD RELATING TO ITS COMPLIANCE WITH THE REVENUE LIMITS, (3) BSI RECEIVED SEVERAL EXTENSIONS OF CREDIT FROM BBVA'S NEW YORK BRANCH DURING 2010 AND 2011 WERE NOT PROPERLY COLLATERALIZED AND BSI FAILED TO PAY INTERCOMPANY FEES ON MARKET TERMS, AND (4) DURING THE FOREGOING PERIODS, BBVA AND BSI FAILED TO HAVE ADEQUATE MANAGEMENT OVERSIGHT, CORPORATE GOVERNANCE, RISK MANAGEMENT, AND INTERNAL CONTROLS WITH RESPECT TO APPLICABLE REVENUE LIMITS AND THE BOARD'S OPERATING STANDARDS; AND (B) BBVA DIRECTLY ENGAGED IN IMPERMISSIBLE UNDERWRITING AND DEALING ACTIVITIES IN THE UNITED STATES BETWEEN JULY 2011 AND OCTOBER 2011 WITHOUT THE REQUIRED REGULATORY APPROVAL OF THE BOARD. AS NOTED IN THE CONSENT ORDER, BBVA AND BSI TOOK CORRECTIVE ACTION AND RESTORED COMPLIANCE WITH THE REVENUE LIMITS AND REPORTING REQUIREMENTS AS OF APRIL 1, 2013.