Chip Buckman Suspended from Supervisory Activities by SEC
Chip Buckman (CRD #: 2202467), a broker registered with Buckman, Buckman & Reid, has been suspended by the SEC, according to his BrokerCheck record, accessed on December 14, 2022. Investors may have also engaged his services through Buckman Advisory Group. If you have questions about his alleged conduct as a broker, keep reading.
On September 13, 2022, the Securities and Exchange Commission initiated cease-and-desist proceedings against Chip Buckman and Buckman Advisory Group.
The SEC alleged that, from January 2012 to June 2017, Buckman Advisory Group failed to implement policies and procedures to reasonably prevent violations of the Investment Advisers Act of 1940. Buckman Advisory Group allegedly also failed to reasonably supervise a representative who allegedly engaged in a fraudulent “cherry-picking” scheme involving exchange-traded funds (ETFs).
Specifically, the SEC alleged that Buckman Advisory Group failed to conduct reviews of this representative’s activities and failed to enforce the firm’s own rule that trade allocations must be submitted at the same time trade orders are placed.
Further, Buckman Advisory Group’s Form ADV allegedly contained statements that were made false or misleading by the firm’s supervision and compliance failures. Notably, Chip Buckman, as Chief Information Officer, was allegedly responsible for the following:
- Monitoring the firm’s compliance with clients’ investment parameters
- Reviewing trades and limited investment opportunity allocations to ensure client accounts were not being purposefully disadvantaged
- Reviewing client accounts to ensure compliance with their investment goals and degrees of risk tolerance
The SEC alleged that Chip Buckman failed to carry out these responsibilities by allowing the representative to create portfolios for clients that were not the pre-approved portfolios required for other representatives at the firm, and by failing to reasonably prevent the representative’s violations of the Investment Advisers Act.
The SEC alleged that Chip Buckman caused Buckman Advisory Group’s violations of Section 206(2) of the Investment Advisers Act of 1940, and willfully aided and abetted and caused the firm’s violations of Section 206(4) of the Investment Advisers Act and Rule 206(4)-7 thereunder.
The SEC further alleged that Chip Buckman failed to reasonably supervise the representative within the meaning of Sections 203(e)(6) and 203(f) of the Advisers Act in order to prevent his violations of the Securities Act of 1933, the Securities Exchange Act of 1934, and the Investment Advisers Act.
The Investment Advisers Act of 1940
Section 206 of the Investment Advisers Act prohibits the use of manipulative, deceptive, and otherwise fraudulent practices.
Rule 206(4)-7 requires investment advisers to establish and implement policies and procedures designed to prevent violations of the Investment Advisers Act, conduct annual reviews of these policies and procedures, and appoint a chief compliance officer.
Section 203(e)(6) states that sanctions may be applied upon anyone who willfully aids and abets violations of other federal securities regulations or who fails to reasonably supervise another person who violates these regulations.
Section 203(f) states that the SEC can bar or suspend violators of Section 203 from associating with investment advisers, broker-dealers, and other organizations.
Chip Buckman was subject to the following sanctions:
- Order to cease and desist from violations of the Investment Advisers Act
- $75,000 fine
- Unspecified undertaking
On April 25, 2019, Chip Buckman consented to the entry of findings that he and his firm, Buckman, Buckman, & Reid (BBR) allegedly failed to reasonably supervise two brokers who recommended excessive and unsuitable trades in multiple client accounts from January 2013 through April 2017.
During this time, Chip Buckman was allegedly the firm’s Senior Vice President and designated principal responsible for reviewing the suitability of recommendations in clients’ accounts.
According to a Letter of Acceptance, Waiver & Consent (AWC), BBR allegedly failed to establish and implement a supervisory system, including written supervisory procedures (WSPs), in order to maintain compliance with FINRA Rule 2111.
The AWC alleged that Chip Buckman failed to conduct suitability reviews and claimed that he relied on the Compliance Department to perform these, proof of which the AWC alleged was not evident in the firm’s WSPs.
Chip Buckman allegedly failed to supervise the recommendations made by two brokers.
The AWC concluded that BBR and Chip Buckman allegedly violated NASD Rule 3010 (for conduct before December 1, 2014), FINRA Rule 3110 (for conduct on or after December 1, 2014), and FINRA 2010.
FINRA Rule 3110
FINRA Rule 3110 requires that firms establish systems of supervision to maintain their compliance with securities regulations. This includes appointing supervisors and providing them with Written Supervisory Procedures (WSPs).
FINRA Rule 2010
FINRA Rule 2010 holds brokers to high standards of commercial honor and just and equitable principles of trade.
Chip Buckman consented to the following sanctions:
- $20,000 fine
- 3-month suspension
- Completion of 40 hours of continuing education regarding supervisory responsibilities within 90 days of Notice of Acceptance of the AWC
Chip Buckman’s suspension ran from May 20 to August 19, 2019.
You can read a copy of the AWC here.
Chip Buckman has passed the following exams:
- Series 66 – Uniform Combined State Law Examination
- Series 63 – Uniform Securities Agent State Law Examination
- SIE – Securities Industry Essentials Examination
- Series 7 – General Securities Representative Examination
- Series 4 – Registered Options Principal Examination
- Series 24 – General Securities Principal Examination
Chip Buckman is a registered broker in 31 states, the District of Columbia, and the Virgin Islands. He is also a registered investment adviser in New Jersey and Texas.
He has also worked for Halpert and Company (CRD#:7094).
Kurta Law Can Help
If you worked with Chip Buckman and you have concerns about your investments, please contact us today at 877-600-0098 or firstname.lastname@example.org for a free consultation.
For over 20 years, Kurta Law has advocated on behalf of investors who want to recover their investment losses from brokers and brokerage firms. Kurta Law is a nationally recognized law firm and exclusively represents investors against brokers and brokerage firms on a contingency basis. This means that the firm only earns a fee if our securities attorneys recover money on your behalf.