FINRA

Without admitting or denying the findings, Koonce consented to the sanction and to the entry of findings that he participated in several private securities transactions without providing prior written notice to his member firm. The findings stated that among other things, Koonce solicited at least 30 prospective investors (including several firm customers) to invest in convertible promissory notes being offered by a private company, sent the prospective investors information about the private company from his firm email account, took part in arranging meetings where prospective investors could meet with representatives of the private company to obtain additional information, facilitated the movement of funds for three firm customers so they could make investments in the convertible promissory notes aggregating $175,000, and ultimately invested $50,000 of his own money in the convertible promissory notes. Separately, Koonce personally invested $50,000 to purchase shares of stock in a second private company. The findings also stated that Koonce completed firm compliance questionnaires in which he falsely denied participating in private securities transactions during the months since completing his previous questionnaire. The findings also included that Koonce provided false responses to FINRA requests for information during its investigation of this matter.

Acceptance, Waiver & Consent(AWC)

Bar (Permanent)

All capacities

Indefinite

12/14/2017

Massachusetts

On or about November 30, 2016, EKRI submitted to FINRA's Central Registration Depository (the "CRD") a Uniform Application for Securities Industry Registration or Transfer (Form U4) seeking the registration of Koonce in Massachusetts as an investment adviser representative of EKRI (the "Application"). Koonce has been the subject of seven (7) disclosable incidents between October 1995 and December 2015. Koonce was the subject of two (2) Judgment/Lien disclosures. On or about November 28, 1995, a creditor filed an action to collect an unpaid debt owed by Koonce. This debt has since been satisfied. On or about August 6, 1997, a different creditor filed an action to collect an unpaid debt owed by Koonce. This debt has since been satisfied. Koonce was the subject of an internal review, initiated on or about August 7, 1998, which led to Koonce's termination from Hornor, Townsend & Kent, Inc. on or about September 15, 1998. This termination resulted from Koonce signing client names to two client forms without authorization. Koonce was the subject of a Regulatory Action taken by FINRA (f/k/a the National Association of Securities Dealers, Inc.) on or about August 30, 1999. This action was brought to address the allegations that Koonce violated NASD Rule 2110, specifically, that he signed his customer's name to forms requesting the release of medical information and authorizing the transfer of a retirement account, and then submitted those forms for processing. As a result of this action, Koonce was suspended from associating with any member of the NASD for a period of 60 days, and fined $5,000. This regulatory action was initiated to address the same conduct which resulted in Koonce's termination from Hornor, Townsend & Kent, Inc. in 1998. On or about July 9, 2015, LPL Financial, LLC, initiated an internal review into allegations that Koonce was selling away. On or about November 18, 2015, Koonce was terminated from LPL for participating in private securities transactions, which were not approved by LPL, and which involved products not approved by LPL. This was a violation of LPL's policies and procedures concerning agent conduct. Review of the foregoing incidents involving Koonce has moved the Division to place conditions on his registration as an investment adviser representative of EKRI.

Order

Undertaking

Massachusetts

On or about December 9, 2015, EKRI submitted to FINRA's Central Registration Depository (the "CRD") a Uniform Application for Securities Industry Registration or Transfer (Form U4) seeking the registration of Koonce in Massachusetts as an agent of EKRI (the "Application"). Koonce has been the subject of seven (7) disclosable incidents between October 1995 and December 2015. Koonce was the subject of two (2) Judgment/Lien disclosures. On or about November 28, 1995, a creditor filed an action to collect an unpaid debt owed by Koonce. This debt has since been satisfied. On or about August 6, 1997, a different creditor filed an action to collect an unpaid debt owed by Koonce. This debt has since been satisfied. Koonce was the subject of an internal review, initiated on or about August 7, 1998, which led to Koonce's termination from Hornor, Townsend & Kent, Inc. on or about September 15, 1998. This termination resulted from Koonce signing client names to two client forms without authorization. Koonce was the subject of a Regulatory Action taken by FINRA (f/k/a the National Association of Securities Dealers, Inc.) on or about August 30, 1999. This action was brought to address the allegations that Koonce violated NASD Rule 2110, specifically, that he signed his customer's name to forms requesting the release of medical information and authorizing the transfer of a retirement account, and then submitted those forms for processing. As a result of this action, Koonce was suspended from associating with any member of the NASD for a period of 60 days, and fined $5,000. This regulatory action was initiated to address the same conduct which resulted in Koonce's termination from Hornor, Townsend & Kent, Inc. in 1998. On or about July 9, 2015, LPL Financial, LLC, initiated an internal review into allegations that Koonce was selling away. On or about November 18, 2015, Koonce was terminated from LPL for participating in private securities transactions, which were not approved by LPL, and which involved products not approved by LPL. This was a violation of LPL's policies and procedures concerning agent conduct. Review of the foregoing incidents involving Koonce has moved the Division to place conditions on his registration as an agent of EKRI.

Order

Undertaking

The Division approved Koonce's application for registration in Massachusetts as an agent of EKRI upon the conditions set forth below, which are effective for five (5) years from the date of entry of the order: a) Koonce shall provide financial services to only one Massachusetts customer, and members of that customer's family; b) Koonce shall be supervised, on a heightened basis; c) EKRI shall not permit Koonce to have any principal, supervisory, or managerial duties while associated with EKRI; d) Koonce shall not be allowed to exercise discretion over individual Massachusetts customer accounts; e) should Koonce become the subject of any written or oral customer complaint, any regulatory investigation, internal investigation, arbitration proceeding, or securities-related litigation concerning allegations arising from his conduct of securities business, EKRI shall notify the Director, in writing, within fifteen (15) business days of the event; f) Koonce shall notify his supervisor of the following events, within five (5) business days of their occurrence, concerning allegations arising from his conduct of securities business, the receipt of any customer complaint, oral or written, the initiation of any arbitration proceeding, regulatory investigation, or securities-related litigation; g) Koonce shall notify his supervisor of any inaccuracy in any representation made to the Division herein, or the breach of any provision of his Undertakings and Representations; and h) twenty-four (24) months after the entry of the Order, Koonce shall submit to EKRI and the Director an affidavit stating that he has fully complied with all conditions of the Order referenced in Part 11 of the Undertakings, or, in the event that Koonce cannot submit the required affidavit, he shall instead submit a statement explaining why.

LPL Financial LLC

Discharged

Participated in private securities transactions without firm approval. Directed clients to unapproved investments, in violation to Firm policy.

Mr. Koonce encourages any prospective or current client that has concerns regarding the above to speak with him personally.

NATIONAL ASSOCIATION OF SECURITIES DEALERS, INC.

RESPONDENT: SIGNED CUSTOMER'S NAME TO AN AUTHORIZATION TO RELEASE MEDICAL INFORMATION AND SUBMITTED THAT AUTHORIZATION; SIGNED CUSTOMER'S NAME TO AN AUTHORIZATION TO AN AUTHORIZATION TO TRANSFER RETIREMENT ACCOUNT AND SUBMITTED IT. (NASD RULE 2110)

Acceptance, Waiver & Consent(AWC)

Monetary/Fine

$5,000.00

Suspension

SUSPENSION FROM ASSOCIATION WITH ANY MEMBER OF THE NASD IN ANY CAPACITY FOR 60 DAYS; $5,000.00 FINE 09-07-00, $5,000 PAID 11/10/99, INVOICE #99-01-883

ACTING AS GENERAL AGENT, A RELATIVELY NEW AGENT ASKED MY HELP IN WORKING WITH THESE NEW CLIENTS. SOME 2 YEARS LATER (1998) IT BECAME APPARENT THE 401(K) PLAN WAS NOT ESTABLISHED PROPERLY , A THIRD PARTY ADMINISTRATOR. THIS LED TO THE COMPLAINT BY THE CLIENTS AND A COMPLETE INVESTIGATION OF ALL TRANSACTIONS. IT WAS SHOWN AND CONFIRMED BY NASD THAT NO MONEY WAS DISPLACED OR CLIENT WISHES TAKEN ADVANTAGE OF. THE SIGNATURES WERE HOWEVER NOT THOSE OF THE CLIENT. I DO NOT REMEMBER THE SIGNATURES OR THE CIRCUMSTANCES-IT'S POSSIBLE I GOT THEIR APPROVAL BUT NO NOTES WERE IN THE FILE TO THAT EFFECT. THE INSURER AND B/D FELT I COULD NO LONGER BE ON THEIR E&O-THUS THE TERMINATION. SIMPLY COULD NOT GET THE NASD TO ACT QUICKER, THUS WAS 14 MONTHS WITHOUT LICENSE. NO OTHER ISSUES IN 20 YEARS OF BUSINESS.

HORNOR, TOWNSEND & KENT

Discharged

HTK ALLEGED I HAD SIGNED TWO FORMS WITHOUT CLIENTS' KNOWLEDGE. THE PRODUCT INVOLVED WAS A VARIABLE UNIVERSAL LIFE.

ALONG WITH A AGENT (NEW), LES MET WITH A CLIENT THAT RESULTED IN TAKING A CLIENT APPLICATION ON TWO VARIABLE UNIVERSAL POLICIES. SOME TWO YEARS LATER (1998), THE CLIENTS HAD A PROBLEM WITH THE TAXATION OF THE ARRANGEMENT. THEY ASKED PENN MUTUAL TO BEGIN AN INVESTIGATION. THEY DISCOVERED THAT TWO OUT OF THE 35 SIGNATURES REQUIRED, WERE IN LES' HANDWRITING. HE COULD NOT PROVE THESE SIGNATURES WERE AUTHORIZED BY THE CLIENT. THUS THE DECISION WAS TO DISCHARGE HIM. ABSOLUTELY NO MONEY WAS LOST AND THE CLIENT WAS NOT COMPROMISED. TO HIS KNOWLEDGE, THE POLICIES ARE STILL EXISTING.