Rothschild Investment Llc

Allegations: THE SEC ALLEGED THAT ROTHSCHILD INVESTMENT CORPORATION ("ROTHSCHILD"), A DUALLY-REGISTERED INVESTMENT ADVISER AND BROKER-DEALER, VIOLATED SECTIONS 206(2) AND 206(4) OF THE INVESTMENT ADVISERS ACT OF 1940 (THE "ADVISERS ACT") AND RULE 206(4)-7 THEREUNDER BY BREACHING ITS FIDUCIARY DUTY TO ADVISORY CLIENTS BY FAILING TO DISCLOSE TWO TYPES OF COMPENSATION IT RECEIVED BASED ON ITS ADVISORY CLIENTS' INVESTMENTS AND THAT ROTHSCHILD RECEIVED FEES AS A RESULT OF CLIENT INVESTMENTS IN CERTAIN MUTUAL FUND SHARES - SPECIFICALLY 12B-1 FEES AND REVENUE SHARING PAYMENTS FROM AN UNAFFILIATED CLEARING BROKER AS A RESULT OF SWEEPING ROTHSCHILD'S ADVISORY CLIENTS' CASH INTO CERTAIN MONEY MARKET MUTUAL FUNDS. THE SEC ALLEGED THAT VARIOUS INVESTMENTS THAT RESULTED IN 12B-1 FEES OR REVENUE SHARING PAYMENTS WERE GENERALLY MORE EXPENSIVE THAN LOWER COST OPTIONS AVAILABLE TO CLIENTS, AND MADE RELATED ALLEGATIONS OF FAILURE TO SEEK BEST EXECUTION RELATED TO SAME AND FAILURE TO CONSIDER ALTERNATIVE FUNDS WITH SIMILAR STRATEGIES THAT MIGHT HAVE BEEN LESS COSTLY. ADDITIONALLY, THE SEC ALLEGED THAT ROTHSCHILD FAILED TO ADOPT AND IMPLEMENT WRITTEN COMPLIANCE POLICIES AND PROCEDURES REASONABLY DESIGNED TO PREVENT VIOLATIONS OF THE ADVISERS ACT AND THE RULES THEREUNDER IN CONNECTION WITH ITS MUTUAL FUND AND CASH SWEEP MONEY MARKET FUND SELECTION PRACTICES AND ITS DISCLOSURE OF THE ASSOCIATED CONFLICTS OF INTEREST. Status: Final Sanction Detail: FIRM WAS ORDERED TO CEASE AND DESIST FROM CAUSING VIOLATIONS OF THE NATURE IN QUESTION, PAY DISGORGEMENT OF $1,885,360.59, PREJUDGMENT INTEREST OF $186,306.41, AND A CIVIL PENALTY OF $400,000.00; AND COMPLY WITH CERTAIN DISGORGEMENT AND RELATED UNDERTAKINGS SET FORTH BY THE SEC. Summary: ALL DISGORGEMENT AND OTHER PAYMENTS AND PENALTIES REQUIRED BY THE SEC ORDER HAVE BEEN OR WILL BE PAID IN ACCORDANCE WITH THE TERMS OF THE ORDER AND WITHIN THE TIMETABLE SPECIFIED BY THE ORDER."

Allegations: MSRB RULE G-14 - ROTHSCHILD INVESTMENT CORPORATION FAILED TO REPORT INFORMATION REGARDING PURCHASE AND SALE TRANSACTIONS EFFECTED IN MUNICIPAL SECURITIES TO THE REAL-TIME TRANSACTION REPORTING SYSTEM (RTRS) IN THE MANNER PRESCRIBED BY RULE G-14 RTRS PROCEDURES AND THE RTRS USERS MANUAL; THE FIRM FAILED TO REPORT INFORMATION ABOUT THE TRANSACTIONS WITHIN 15 MINUTES OF TIME OF TRADE TO AN RTRS PORTAL. Status: Final Sanction Detail: WITHOUT ADMITTING OR DENYING THE FINDINGS, THE FIRM CONSENTED TO THE DESCRIBED SANCTION AND TO THE ENTRY OF FINDINGS; THEREFORE, THE FIRM IS FINED $5,000. Summary: ROTHSCHILD INVESTMENT CORPORATION STRIVES TO ACHIEVE COMPLIANCE DAILY WITH THE PROPER AND TIMELY REPORTING OF TRANSACTIONS IN MUNICIPAL SECURITIES. DUE TO THE RELATIVELY SMALL VOLUME OF TRADES REPORTED ON A MONTHLY BASIS, ROTHSCHILD'S REPORT CARD CAN BE NEGATIVELY AFFECTED. ROTHSCHILD WILL CONTINUE TO STRIVE TOWARDS 100% COMPLIANCE WITH MSRB RULE G-14.