Commonwealth of Pennsylvania Department of Banking and Securities v. Venn Wealth & Benefit Services, LLC

COMMONWEALTH OF PENNSYLVANIA
DEPARTMENT OF BANKING AND SECURITIES
:
COMMONWEALTH OF PENNSYLVANIA :
DEPARTMENT OF BANKING AND :
SECURITIES, BUREAU OF SECURITIES :
COMPLIANCE AND EXAMINATIONS : Docket No.: 240034 (SEC-OSC) :
v. :
:
VENN WEALTH & BENEFIT :
SERVICES, LLC1 :
MICHAEL SCHULTZ :
CONSENT AGREEMENT AND ORDER
The Commonwealth of Pennsylvania, acting through the Department of Banking and Securities (“Department”), Bureau of Securities Compliance and Examinations (“Bureau”), has conducted an investigation of the business practices of Venn Wealth & Benefit Services, LLC and its officers and employees. Based on the results of its investigation, the Bureau has concluded that Venn Wealth & Benefit Services, LLC has operated in violation of the Pennsylvania Securities Act of 1972, 70 P.S. § 1-101 et seq. (“1972 Act”). Venn Wealth & Benefit Services, LLC, in lieu of litigation, and without admitting or denying the allegations herein, and intending to be legally bound, hereby agrees to the terms of this Consent Agreement and Order (“Order”). BACKGROUND

1. The Department is the Commonwealth of Pennsylvania’s administrative agency
   authorized and empowered to administer and enforce the 1972 Act.

2. The Bureau is primarily responsible for administering and enforcing the 1972 Act
   for the Department.
   This Consent Agreement Order is only applicable to Venn Wealth & Benefit Services, LLC. FILED 2025 JAN 10 PM 3:04 PA DEPARTMENT OF BANKING AND SECURITIES

3. Respondent Venn Wealth & Benefit Services, LLC (“VWBS”), CRD # 129865,
   was, at all material times herein, a Pennsylvania limited liability company with an address of 210 E. Plank Road, Suite 1C, Altoona, Pennsylvania 16602.

4. From on or about March 8, 2004 until the present, VWBS was registered pursuant
   to Section 301(c) of the 1972 Act, 70 P.S. § 1-301(c), as an investment adviser.

5. From in or about March 8, 2004 until the present, VWBS did not maintain a
   reasonable system for applying and enforcing written procedures pertaining to the purchase, sale and exchange of inverse and leveraged exchange-traded funds (“ETFs”) on behalf of its clients who were residents of Pennsylvania. VIOLATION

6. By engaging in the acts and conduct set forth in paragraphs 3 through 5 above,
   VWBS failed to establish and maintain written procedures with respect to leveraged ETFs and a system for applying and enforcing those written procedures which are reasonably designed to achieve compliance with the 1972 Act and other securities laws and regulations, and failed to keep a copy of the written procedures with respect to leveraged ETFs at each location where it conducted business, which acts and conduct form a basis to deny, suspend, revoke, or condition the registration of VWBS or to censure VWBS pursuant to Section 305(a)(v) of the 1972 Act, 70 P.S. § 1-305(a)(v), and Regulation 305.011(a), (c), 10 Pa. Code § 305.011(a), (c), promulgated thereunder. RELIEF

7. VWBS shall pay the Department an administrative assessment in the amount of
   $20,000.00. Payment shall be made by certified check or money order made payable to the “Department of Banking and Securities” and shall be mailed or delivered in person to the Bureau of Securities Compliance and Examinations located at 17 N. Second Street, Suite 1300, Harrisburg,

Pennsylvania 17101. The assessment shall be paid as follows:

a. $2,500.00 on or before January 31, 2025; b. $2,500.00 on or before April 31, 2025;
c. $2,500.00 on or before July 31, 2025;
d. $2,500.00 on or before October 31, 2025; e. $2,500.00 on or before January 31, 2026; f. $2,500.00 on or before April 31, 2026; g. $2,500.00 on or before July 31, 2026; and h. $2,500.00 on or before October 31, 2026.
8. This Order is not intended to indicate that VWBS or any of its affiliates or current
or former employees should be subject to any disqualification contained in the federal securities laws, the rules and regulations thereunder, the rules and regulations of self-regulatory organizations or various states’ securities laws, including the provisions of the 1972 Act and regulations promulgated thereunder; and any disqualification from relying upon the registration exemptions or safe harbor provisions, and this Order is not intended to form the basis of any such disqualification.
9. VWBS is ORDERED to comply with the 1972 Act, and Regulations adopted by
the Department, and in particular Section 305(a)(v) of the 1972 Act, 70 P.S. § 1-305(a)(v).
10. Should VWBS fail to pay the assessment as set forth in paragraph 7 above, the
sanctions set forth elsewhere in the Order shall continue in full force and effect until full payment is made. However, this provision shall not be construed as affording VWBS the option of either paying the assessment or being indefinitely subject to the sanctions.
11. Should VWBS fail to comply with any and/or all provisions of this Order, the

Department may impose additional sanctions and costs and seek other appropriate relief subject to VWBS’s right to a hearing pursuant to the 1972 Act. FURTHER PROVISIONS
12. Consent. VWBS hereby knowingly, willingly, voluntarily and irrevocably
consents to the entry of this Order pursuant to the Bureau’s authority under the 1972 Act and agrees that it understands all of the terms and conditions contained herein. VWBS, by voluntarily entering into this Order, waives any right to a hearing or appeal concerning the terms, conditions, and/or penalties set forth in this Order.
13. Entire Agreement. This Order contains the entire agreement between the
Department and VWBS. There are no other terms, obligations, covenants, representations, statements, conditions, or otherwise, of any kind whatsoever concerning this Order. This Order may be amended in writing by mutual agreement by the Department and VWBS.
14. Binding Nature. The Department, VWBS, and all officers, owners, directors
employees, heirs and assigns of VWBS intend to be and are legally bound by the terms of this Order.
15. Counsel. This Order is entered into by the parties upon full opportunity for legal
advice from legal counsel.

16. Effectiveness. VWBS hereby stipulates and agrees that the Order shall become
    effective on the date the Bureau executes the Order (“Effective Date”).
17. Other Enforcement Action.
    (a) The Department reserves all of its rights, duties, and authority to enforce all statutes, rules, and regulations under its jurisdiction against VWBS in the future regarding all matters not resolved by this Order. (b) VWBS acknowledges and agrees that this Order is only binding upon the Department and not any other local, state or federal agency, department, or office regarding matters within this Order.
18. Authorization. The parties below are authorized to execute this Order and legally
    bind their respective parties.
19. Counterparts. This Order may be executed in separate counterparts, by facsimile
    and/or by PDF.
20. Titles. The titles used to identify the paragraphs of this document are for the
    convenience of reference only and do not control the interpretation of this document.
21. Finding. The Department finds that it is necessary and appropriate in the public
    interest and for the protection of investors, and consistent with the purposes fairly intended by the policy and provisions of the 1972 Act to issue this Order.