Securities Law Blog

S.Cheryl Bauman and Atlanta-based broker-dealer J.P. Turner & Company, LLC, were charged with having violated Rule 30(a) of Regulation S-P ("Safeguard Rule") between 2001 to 2006. The SEC specifically noted that JP Turner:

• failed to failed to adopt and implement policies and procedures designed reasonably to safeguard customer records and information as required by Rule 30(a);
• because it allegedly never complied with Rule 30(a), among other things, the firm never gave its managers or brokers guidance on how to protect customer records or how to dispose properly of such records when they no longer are needed.
• in September 2006, the account records of over 5,000 brokerage customers were left abandoned for several weeks at curbside outside the former home of a JP Turner RR in Alpharetta, GA.

About J.P. Turner & Co. and Ms. Bauman. The B/D has been registered with the SEC since 1997. It has 488 brokers, and over 150 branches located throughout the U.S. During the relevant period, Ms. Bauman served as either chief compliance officer or assistant chief compliance officer. As a compliance officer, the SEC notes that Ms. Bauman had been delegated responsibility for ensuring that the firm complied with the above Safeguard Rule requirements. Having failed to carry out those responsibilities, Ms. Bauman herself was herself deemed to have violated the Safeguard Rule.

Abandoned Customer Records. JP Turner's failure to comply became apparent in September 2006. In connection with a residence change, a then-RR placed records of more than 5,000 current and former JP Turner customers curbside at his residence in suburban Atlanta, for pick up by a trash hauler with whom he had contracted to retrieve and destroy the records. The customer records contained names, addresses, DOBs, SSNs, bank account numbers and account statements. However, the hauler never collected the records, which remained abandoned until JP Turner retrieved them two weeks later. To date, there's been no indication any customer has become a victim of identity or other financial crime.

Ms. Bauman, among other things, will cooperate fully with the SEC in any and all investigations, litigations or other proceedings relating to or arising from these matters. [SEC Administrative Proceeding 3-13551, 7/17]