FAILURE TO SUPERVISE

$171,548.00

$100,000.00

THE ARBITRATION PANEL ASSESSED THE AWARD AS FOLLOWS: $80,000.00 JOINTLY & SEVERALLY AGAINST RESPONDENTS EKN & OTTIMO, $10,000.00 AGAINST RESPONDENT BENTIVEGNA AND $10,000.00 AGAINST RESPONDENT BORGNER

FINRA

FINRA RULE 2010 AND NASD RULE 3010: AS CCO OF HIS MEMBER FIRM, BORGNER WAS AT ALL RELEVANT TIMES RESPONSIBLE FOR SUPERVISING THE FIRM'S FILING AND AMENDING OF UNIFORM APPLICATIONS FOR SECURITIES INDUSTRY REGISTRATION (FORMS U4) OR UNIFORM TERMINATION NOTICES FOR SECURITIES INDUSTRY REGULATION (FORMS U5) TO ENSURE THE ACCURATE AND TIMELY REPORTING OF CUSTOMER COMPLAINTS AGAINST ITS REGISTERED REPRESENTATIVES. BORGNER FAILED TO IMPLEMENT AN ADEQUATE SUPERVISORY SYSTEM TO ENSURE THE FILING OF AMENDED FORMS U4 AND U5 TO DISCLOSE CUSTOMER COMPLAINT. SPECIFICALLY, BORGNER DID NOT FILE AMENDMENTS TO REGISTERED REPRESENTATIVES' FORMS U4 OR U5 TO REFLECT CUSTOMER COMPLAINTS OF UNAUTHORIZED TRADING IN CUSTOMERS' ACCOUNTS WHEN BORGNER BELIEVED THAT THE CUSTOMER INITIALLY APPROVED AND THEN CANCELED THE TRANSACTION. ON AT LEAST FOUR OCCASIONS, BORGNER FAILED TO TIMELY FILE AMENDED FORMS U4 AND U5 TO REFLECT CUSTOMER COMPLAINTS WITH COMPENSATORY DAMAGES OF $5,000 OR MORE. AS CCO OF HIS FIRM, BORGNER WAS RESPONSIBLE FOR THE REGISTRATIONS OF THE FIRM'S ASSOCIATED PERSONS, INCLUDING ENSURING THAT UNREGISTERED INDIVIDUALS DID NOT PERFORM FUNCTIONS AT THE FIRM THAT REQUIRE REGISTRATION. FOR MORE THAN A YEAR, AN UNREGISTERED AN UNPAID INTERN WORKING FOR THE FIRM PERFORMED WORK REQUIRING REGISTRATION. THE INDIVIDUAL CONDUCTED DUE DILIGENCE ON A FIRM OFFERING, WHERE THE FIRM WAS TO ACT AS A STOCK PROMOTER FOR A PUBLICLY TRADED COMPANY, CONDUCTED BY THE FIRM'S INVESTMENT BANKING DEPARTMENT, INCLUDING DRAFTING THE ADVISORY AGREEMENT AND DUE DILIGENCE CERTIFICATE. ALTHOUGH THE INDIVIDUAL WAS AN UNPAID INTERN AT THE FIRM, HE RECEIVED $2,000 FROM THE INITIAL $25,000 ADVISORY FEE, AND EXPECTED TO RECEIVE A GRANT OF 15,000 SHARES OF RESTRICTED STOCK AS FURTHER COMPENSATION FOR HIS DUE DILIGENCE WORK. ALTHOUGH BORGNER KNEW THAT THE INDIVIDUAL WAS UNREGISTERED, HE NEVERTHELESS PERMITTED HIM TO PERFORM DUTIES THAT REQUIRED REGISTRATION. BORGNER FAILED TO MAINTAIN AND IMPLEMENT A SUPERVISORY SYSTEM REASONABLY DESIGNED TO PREVENT UNREGISTERED EMPLOYEES FROM PERFORMING FUNCTIONS REQUIRING REGISTRATION.

Acceptance, Waiver & Consent(AWC)

Civil and Administrative Penalty(ies)/Fine(s)

$5,000.00

Suspension

ANY PRINCIPAL CAPACITY

10 BUSINESS DAYS

3/18/2013

4/1/2013

WITHOUT ADMITTING OR DENYING THE FINDINGS, BORGNER CONSENTED TO THE DESCRIBED SANCTIONS AND TO THE ENTRY OF FINDINGS, THEREFORE HE FINED $5,000 AND SUSPENDED FROM ASSOCIATION WITH ANY FINRA MEMBER IN ANY PRINCIPAL CAPACITY FOR 10 BUSINESS DAYS. IN LIGHT OF HIS FINANCIAL STATUS, A LOWER FINE WAS IMPOSED. THE FINE SHALL BE DUE AND PAYABLE EITHER IMMEDIATELY UPON REASSOCIATION WITH A MEMBER FIRM FOLLOWING THE SUSPENSION, OR PRIOR TO ANY APPLICATION OR REQUEST FOR RELIEF FROM ANY STATUTORY DISQUALIFICATION RESULTING FROM THIS OR ANY OTHER EVENT OR PROCEEDINGS, WHICHEVER IS EARLIER. THE SUSPENSION IS IN EFFECT FROM MARCH 18, 2013, THROUGH APRIL 1, 2013. FINE PAID IN FULL 10/04/13.

WITHOUT ADMITTING OR DENYING THE FINDINGS, BORGNER CONSENTED TO THE DESCRIBED SANCTIONS AND TO THE ENTRY OF FINDINGS, THEREFORE HE FINED $5,000 AND SUSPENDED FROM ASSOCIATION WITH ANY FINRA MEMBER IN ANY PRINCIPAL CAPACITY FOR 10 BUSINESS DAYS. IN LIGHT OF HIS FINANCIAL STATUS, A LOWER FINE WAS IMPOSED. THE FINE SHALL BE DUE AND PAYABLE EITHER IMMEDIATELY UPON REASSOCIATION WITH A MEMBER FIRM FOLLOWING THE SUSPENSION, OR PRIOR TO ANY APPLICATION OR REQUEST FOR RELIEF FROM ANY STATUTORY DISQUALIFICATION RESULTING FROM THIS OR ANY OTHER EVENT OR PROCEEDINGS, WHICHEVER IS EARLIER. THE SUSPENSION IS IN EFFECT FROM MARCH 18, 2013, THROUGH APRIL 1, 2013.