FINRA

Without admitting or denying the findings, Townes consented to the sanctions and to the entry of findings that he borrowed funds from a customer without complying with the provisions of NASD Rule 2370 or the WSPs of his then member firm. The findings stated that the loans were not repaid, and the customer ultimately sought and obtained an arbitration award against Townes for failure to repay the loans. Townes did not disclose these loans to the firm or receive the firm's approval to borrow from the customer and the loan did not meet any of the exceptions found in NASD Rule 2370. Moreover, the firm's WSPs prohibited lending arrangements between associated persons and customers under any circumstances. While at the firm, Townes completed multiple activity questionnaires certifying to the firm that his activities were in compliance with the firm's policies and procedures. After accepting these loans, Townes continued to certify on activity questionnaires that his activities were in compliance with the firm's policies and procedures. The findings also stated that Townes, while associated with another member firm, used an email address that was not disclosed to his firm to send securities-related email communications to the customer, who was still his customer at the time. The emails discussed her prior loans to him and her current investments. Townes did so without the knowledge of the firm and in contravention of the firm's policies, which prohibited the use of personal email to communicate with securities customers. Townes completed an annual questionnaire in 2014 and certified that he was not using any personal email addresses to communicate with securities customers. As a result of the foregoing conduct, Townes caused his firm to maintain inaccurate books and records. The findings also included that Townes willfully failed to timely amend his Form U4 to disclose Internal Revenue Service (IRS) tax liens within thirty days of learning of them. Townes has now disclosed the liens.

Acceptance, Waiver & Consent(AWC)

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

$22,500.00

Suspension

all capacities

one year

9/19/2016

9/18/2017

Respondent understands that this settlement includes a finding that he/she willfully omitted to state a material fact on a Form U4, and that under Section 3(a)(39)(F) of the Securities Exchange Act of 1934 and Article III, Section 4 of FINRA's By-Laws, this omission makes Respondent subject to a statutory disqualification with respect to association with a member.

FINRA

Respondent Townes failed to comply with an arbitration award or settlement agreement or to satisfactorily respond to a FINRA request to provide information concerning the status of compliance.

Letter

Suspension

any capacity

N/A

3/1/2016

Pursuant to Article VI, Section 3 of FINRA By-Laws, and FINRA Rule 9554, Respondent Townes is suspended on March 1, 2016 for failure to comply with an arbitration award or settlement agreement or to satisfactorily respond to a FINRA request to provide information concerning the status of compliance.

1 COUNT MISDEMEANOR; WORTHLESS CHECK CHARGE; NO LO CONTENDRE;

MISDEMEANOR

ON 10/25/2001, DEFENDENT PLED NO LO CONTENDRE TO THE DEFENSE OF ISSUING WORTHLESS CHECK AND THE DEFENDENT PAID A FINE OF $50. THE DEFENDENT RECEIVED A JUDIFICATION OF GUILT; DEFENDENT MADE RESTITUTION AND THE CASE WAS DISMISSRED.