UNITED STATES SECURITIES AND EXCHANGE COMMISSION

The Securities and Exchange Commission ("Commission") deems it appropriate and in the public interest that public administrative proceedings be, and hereby are, instituted pursuant to Section 15(b) of the Securities Exchange Act of 1934 ("Exchange Act") and Section 203(f) of the Investment Advisers Act of 1940 ("Advisers Act") against Jonathan Dax Cooke ("Respondent" or "Cooke"). The Commission finds that on March 21, 2022, after a nine day trial in the civil action styled Securities and Exchange Commission v. Jonathan Dax Cooke, et al., Civil Action Number 1:17-CV-02873-JSA, in the United States District Court for the Northern District of Georgia, a jury returned a verdict finding that Cooke had (a) violated, and aided and abetted violations of, Section 17(a) of the Securities Act of 1933 ("Securities Act"), Section 10(b) of the Exchange Act and Rule 10b-5 promulgated thereunder, and (b) aided and abetted violations of Section 17(a) of the Exchange Act and Rule 17a-4(b)(4) promulgated thereunder. The jury also found Cooke liable as a control person for Keystone Capital Partners, Inc. d/b/a Federal Employees Benefits Counselors' ("FEBC") violations of Section 10(b) of the Exchange Act and Rule 10b-5 thereunder. On August 19, 2022, the Court entered a final judgment by consent against Cooke that, among other things, permanently enjoined Cooke from future violations of Sections 17(a) of the Securities Act, Section 10(b) of the Exchange Act and Rule 10b-5 promulgated thereunder, and from aiding and abetting future violations of Section 17(a) of the Exchange Act and Rule 17a-4(b)(4) promulgated thereunder. The Commission's complaint alleged that, between approximately March 2012 and November 2014, Cooke and others fraudulently induced federal employees to rollover significant funds from their federal retirement accounts, referred to as Thrift Savings Plan ("TSP") accounts, into variable annuity products promoted under the banner of FEBC.

Order

Bar (Permanent)

association with a broker, dealer, investment adviser, municipal securities dealer, municipal advisor, transfer agent, or NRSRO

Indefinite

8/29/2022

Participating in any offering of a penny stock

Indefinite

8/29/2022

CUSTOMER ALLEGES THAT REPRESENTATIVE MISREPRESENTED HIMSELF AS A FEDERAL EMPLOYEE, THAT CUSTOMER WAS MISLED IN THE PURCHASE OF A VARIABLE ANNUITY, AND THAT INVESTMENT WAS UNSUITABLE. CUSTOMER SEEKS RECOVERY OF ALL FEES AND WAIVER OF SURRENDER CHARGES. ACTIVITY PERIOD - JANUARY 2014 THROUGH APRIL 2014.

$20,254.87

UNITED STATES SECURITIES AND EXCHANGE COMMISSION

Between approximately March 2012 and November 2014, (the "Relevant Period"), Jonathan Cooke and three others, each of whom were registered representatives of a broker dealer (collectively, the "Representatives"), fraudulently induced federal employees to rollover significant funds from their federal retirement accounts, referred to as Thrift Savings Plan ("TSP") accounts, into variable annuity products promoted under the banner of an entity called Keystone Capital Partners, Inc. d/b/a Federal Employee Benefits Counselors. Motivated by the prospect of high commissions associated with the variable annuities, the Representatives targeted federal employees, age 59 1/2 and over, who had significant TSP account holdings that could be rolled over on a tax-free basis into variable annuities held in qualified plans at annuity carriers. Defendants employed several tactics calculated to mislead federal employees into believing that Defendants and their recommended investment (that is, a variable annuity) were affiliated with or approved by the federal government. For example, despite the fact that their recommended investments had no connection to the TSP, the Representatives, in recommending this investment: (a) made misleading comparisons between their recommended investment and the life annuity offered through the TSP by omitting key information or falsely describing the actual fee structure and surrender fees related to their recommended investment; (b) used an eagle-encircled insignia on other documents given to customers and on their website that resembled the official seal of various agencies of the federal government; and (c) used a name, Federal Employee Benefits Counselors, that insinuated that they were affiliated with the federal government while obscuring the fact that they were associated with a broker dealer. During the Relevant Period, Defendants sold approximately 200 variable annuities with a total face value of over approximately $40 million to federal employees, who used monies rolled over from their TSP accounts to fund their purchases, and the Representatives collectively earned approximately $1.7 million in commissions on these sales. Further obscuring that Defendants and their recommended investments were unaffiliated with the TSP and the federal government, some of the Defendants also opened accounts with their broker dealer in these five investors' names without the investors' knowledge or consent. The broker dealer that employed the Representatives required that an account be opened in an investor's name before the Representatives could place a variable annuity order on the investor's behalf. But some of the investors did not learn of the creation or existence of these accounts in their names until after their TSP accounts had been liquidated (that is, the underlying securities were sold) and the funds transferred to purchase the variable annuity. Defendants also did not give these five investors the prospectuses for those investments, even though this was required by the broker dealer that employed the Representatives. This also veiled the fact that the investment option they recommended to these investors was a variable annuity issued by a private insurance company that had no connection to, and had not been specifically approved or vetted by, the TSP or the federal government.

Judgment Rendered

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

Disgorgement

$396,409.00

Injunction

officer/director prohibition

CUSTOMER ALLEGES THAT ANNUITY PRODUCTS WERE NOT FULLY EXPLAINED.

The annuity at issue was not sold by [Third Party] while employed by LPL Financial. Mr. Cooke did offer or sell this annuity to [Customer]. Mr. Cooke is listed as the agent of record only because [Third Party] is no longer affiliated with either LPL Financial or BCG Securities and the account had to be transferred to another agent for servicing. To the best of our knowledge, [Third Party] is employed by another member firm and the complaint should be directed him and his current firm.

LPL FINANCIAL LLC

Discharged

CONCERNS REGARDING BUSINESS PRACTICES, INCLUDING COMMUNICATIONS WITH CUSTOMERS.

UPON INFORMATION AND BELIEF, MR. COOKE DID NOTHING IMPROPER AND WAS TERMINATED DUE TO HIS NOTICE TO VOLUNTARILY RESIGN.