UNITED STATES OF AMERICA

Before the

SECURITIES AND EXCHANGE COMMISSION

SECURITIES ACT OF 1933

Release No. 11270 / February 9, 2024

In the Matter of

 

 Certain 

 Broker-Dealer

 Practices, 

 

 

 

Respondents.

 

 ORDER UNDER RULES 262(b)(2), 

 506(d)(2)(ii), AND 602(e) OF THE 

 SECURITIES ACT OF 1933 AND RULE 

 503(b)(2) OF REGULATION 

 CROWDFUNDING GRANTING 

 WAIVERS OF THE DISQUALIFICATION 

 PROVISIONS OF RULES 262(a)(4)(ii),

 506(d)(1)(iv)(B), AND 602(c)(3) OF THE 

 SECURITIES ACT OF 1933 AND RULE 

 503(a)(4)(ii) OF REGULATION 

 CROWDFUNDING

 

I.

Pursuant to the Broker-Dealer Off-Channel Communications Initiative,

1 the Division of 

Enforcement determined to recommend that the Securities and Exchange Commission 

(“Commission”) accept settlement offers from eight SEC registered broker-dealers (“BrokerDealers”), four SEC registered investment advisers (“Investment Advisers”), and four dualregistered broker-dealer and investment advisers (“Dual-Registered Entities”) (together, the 

“Firms”) that committed certain non-scienter based record-keeping violations of the federal 

securities laws and agreed to consent to certain standardized settlement terms. 

II.

 

The Commission has issued separate orders (“Record-Keeping Orders”) instituting 

administrative and cease-and-desist proceedings against the Firms.2

 These proceedings are 

1 The Broker-Dealer Off-Channel Communications Initiative is an investigative initiative conducted by the Division 

of Enforcement. 

2 The 16 Firms subject to this Order are named in the Appendix to this Order. Cambridge Investment Research, 

Inc., KeyBanc Capital Markets Inc., Huntington Securities, Inc., Capstone Capital Markets LLC, and Guggenheim 

Securities LLC are Commission-registered broker-dealers; Cambridge Investment Research Advisors, Inc., 

Northwestern Mutual Investment Management Company, LLC, Mason Street Advisors, LLC, and Guggenheim 

Partners Investment Management LLC are Commission-registered investment advisers; and Key Investment 

Services LLC, Lincoln Financial Advisors Corporation, Lincoln Financial Securities Corporation, Northwestern 
2 

consistent with previously-accepted settlement terms and are brought pursuant to Sections 15(b) 

and 21C of the Securities Exchange Act of 1934 (“Exchange Act”) and Sections 203(e) and 

203(k) of the Investment Advisers Act of 1940 (“Advisers Act”) for willful violations of Section 

17(a) of the Exchange Act and Rule 17a-4(b)(4) thereunder by the Dual-Registered Entities and 

Broker-Dealers and for willful violations of Section 204 of the Advisers Act and Rule 204-

2(a)(7) thereunder by the Dual-Registered Entities and Investment Advisers for their failure to 

comply with the recordkeeping requirements on broker-dealers and investment advisers to ensure 

that they responsibly discharge their crucial roles in our markets. Specifically, the Firms failed

to keep for prescribed periods, and furnish copies of, such business–related records as necessary 

or appropriate in the public interest or for the protection of investors. The Firms admit to facts 

set forth in their respective Record-Keeping Orders and acknowledge that their conduct violated 

the federal securities laws. The Record-Keeping Orders will require the Dual-Registered Entities 

and Broker-Dealers to cease and desist from committing or causing any violations and any future 

violations of Section 17(a) of the Exchange Act and Rule 17a-4 thereunder, require the DualRegistered Entities and Investment Advisers to cease and desist from committing or causing any 

violations and any future violations of Section 204 of the Advisers Act and Rule 204-2 

thereunder, and require the Firms to, among other things, undertake to retain a compliance 

consultant to conduct a comprehensive review of their supervisory, compliance, and other 

policies and procedures designed to ensure that all relevant electronic communications are 

preserved in accordance with the requirements of the federal securities laws. The RecordKeeping Orders will trigger certain disqualifications from exemptions from registration available 

under the Securities Act of 1933 (“Securities Act”) for the Firms. 

III.

 Rule 262(a) of Regulation A provides for disqualification from the Regulation A 

exemption from registration under the Securities Act for offerings if, among other things, the 

relevant entity is subject to a Commission order pursuant to Section 15(b) of the Exchange Act

that places limitations on that entity’s activities, functions, or operations. See 17 CFR § 

230.262(a)(4)(ii). Similarly, Rules 506(d) of Regulation D and 503(a) of Regulation 

Crowdfunding provide for disqualification from the Regulation D and Regulation Crowdfunding 

exemptions from registration under the Securities Act for certain offerings if, among other 

things, the relevant entity is subject to a Commission order pursuant to Section 15(b) of the 

Exchange Act that places limitations on that entity’s activities, functions, or operations. See 17 

CFR §§ 230.506(d)(1)(iv)(B) and 227.503(a)(4)(ii). 

Rule 602(a) of Regulation E provides an exemption from registration under the Securities 

Act, subject to certain conditions, for securities issued by certain small business investment 

companies and business development companies. See 17 CFR § 230.602(a). Rule 602(c)(3) of 

Regulation E makes this exemption unavailable for the securities of an issuer if, among other 

things, any investment adviser or any underwriter of the securities to be offered is subject to an 

Mutual Investment Services, LLC, U.S. Bancorp Investments, Inc., Oppenheimer & Co. Inc., and The Huntington 

Investment Company are dual-registered broker-dealers and investment advisers. While dual-registered entities, 

Northwestern Mutual Investment Services, LLC, U.S. Bancorp Investments, Inc., and Oppenheimer & Co. Inc. are 

treated as Broker-Dealers for purposes of this Order. 
3

order of the Commission entered pursuant to Section 15(b) of the Exchange Act. See 17 CFR § 

230.602(c)(3). 

The Commission has the authority to waive the disqualifications of Regulations A, D, E, 

and Crowdfunding upon a showing of good cause and without prejudice to any other action by 

the Commission, if the Commission determines that it is not necessary under the circumstances 

that an exemption be denied. See 17 CFR. §§ 230.262(b)(2), 230.506(d)(2)(ii), 230.602(e), and 

227.503(b)(2).

In light of the Firms’ participation in the Broker-Dealer Off-Channel Communications 

Initiative, assuming the Firms comply with the terms of the Record-Keeping Orders, and in light 

of the benefits of the Broker-Dealer Off-Channel Communications Initiative, the Commission 

has determined that, pursuant to Rules 262(b)(2), 506(d)(2)(ii), and 602(e) of the Securities Act 

and Rule 503(b)(2) of Regulation Crowdfunding, good cause exists for not denying the various 

exemptions from registration discussed herein.

IV.

Accordingly, IT IS ORDERED, pursuant to Rules 262(b)(2), 506(d)(2)(ii), and 602(e) of 

the Securities Act and Rule 503(b)(2) of Regulation Crowdfunding, that waivers from the 

application of the disqualification provisions of Rules 262(a)(4)(ii), 506(d)(1)(iv)(B), and 

602(c)(3) of the Securities Act and Rule 503(a)(4)(ii) of Regulation Crowdfunding, resulting 

from the entry of the Record-Keeping Orders against the Firms are hereby granted to the Firms

as reflected in the attached appendix. Nothing in this Order shall affect any pre-existing 

disqualification under the above provisions and nothing in this Order shall be interpreted to 

waive or limit any conditions or undertakings which are in place as a result of any prior waiver 

granted to any Firm. Failure to comply with terms of a Record-Keeping Order would require us 

to revisit our determination that good cause has been shown and could constitute grounds to 

revoke or further condition the waiver. The Commission reserves the right, in its sole discretion, 

to revoke or further condition the waiver under these circumstances.

Because of the unique nature of the Broker-Dealer Off-Channel Communications

Initiative, this Order and the circumstances under which it was issued shall not be relied upon by 

any entity that may seek a waiver in the future from the disqualifications discussed herein.

By the Commission.

Vanessa Countryman

Secretary

Appendix: Firms
4

Appendix

(Waivers from disqualification under Regulations A, D, E, and Crowdfunding)

Cambridge Investment Research, Inc.

Cambridge Investment Research Advisors, Inc.

Capstone Capital Markets LLC

Guggenheim Partners Investment Management LLC 

Guggenheim Securities LLC 

Huntington Securities, Inc. 

Key Investment Services LLC

KeyBanc Capital Markets Inc.

Lincoln Financial Advisors Corporation

Lincoln Financial Securities Corporation 

Mason Street Advisors, LLC

Northwestern Mutual Investment Management Company, LLC

Northwestern Mutual Investment Services, LLC

Oppenheimer & Co. Inc.

The Huntington Investment Company 

U.S. Bancorp Investments, Inc.