SECURITIES AND EXCHANGE COMMISSION

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UNITED STATES

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SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

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DIVISION OR

CORPORATION FINANCE

September 30, 2016

Matt Kitzi

Armstrong Teasdale LLP

3405 West Truman Blvd.

Suite 210

Jefferson City, MO 65109

Re:

In the Matter of Moloney Securities Co.,Inc., et al.

Waivers of Disqualification under Rule 506(d)(2)(ii) of Regulation D

and Rule 262(b)(2) of Regulation A

Securities Exchange Act of 1934 Release No. 79003,September 30,2016

Administrative Proceeding File No.3-17604

Dear Mr. Kitzi:

This letter responds to your letter dated September 21,2016("Waiver Letter"), written on behalf

of Moloney Securities Co., Inc.,("Moloney") and constituting an application for waivers of

disqualification under Rule 506(d)(2)(ii) of Regulation D and Rule 262(b)(2) of Regulation A under the

Securities Act of 1933. In the Waiver Letter, you requested relieffrom any disqualification that will arise

as to Moloney under Rule 506 of Regulation D and Rule 262 of Regulation A under the Securities Act by

virtue of the Commission's order entered September 30, 2016 in the Matter of Moloney Securities Co.,

Inc., et al., pursuant to Sections 203(e) and 203(k) ofthe Investment Advisers Act of 1940("Advisers

Act") and Section 15(b) and Section 21C ofthe Securities Exchange Act of 1934("Exchange Act"),

Release No. 79003 (the "Order").

Based on the facts and representations in the Waiver Letter and assuming Moloney complies with

the Order, the Division of Corporation Finance, acting for the Commission pursuant to delegated

authority, has determined that Moloney has made a showing of good cause under Rule 506(d)(2)(ii) of

Regulation D and Rule 262(b)(2) of Regulation A that it is not necessary under the circumstances to deny

reliance on Rule 506 of Regulation D or Regulation A by reason ofthe entry of the Order. Accordingly,

the relief requested in the Waiver Letter regarding any disqualification that may arise as to Moloney

under Rule 506 of Regulation D or Regulation A by reason of the entry of the Order is granted on the

condition that it fully complies with the terms of the Order. Any different facts from those represented or

failure to comply with the terms of the 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 those

circumstances.

Very truly yours,

Sebastian Gomez Abero

Chief, Office of Small Business Policy

Division of Corporation Finance

Matt Kith

DireC T 473.559.6707

mk~in<._}a~msironyteasdaie.tom

YsS50~A! dAMi~1 601~N►DO NEYA04 11UM0lS SNiMfNi:

September 21, 2016

VIA E-MAIL(smallbusiness@sec.gov) &OVERNIGHT MAIL

Sebastian Gomez Abero, Esq.

Chief, Office of Small Business Policy

Division of Corporation Finance

U.S. Securities and Exchange Commission

100 F Street, N.E.

Washington, O.C. 2Q549

Re;

In the Matterof Mooney Securities Co., Inc„ et al. -Waiver of~isqua(ification

Dear Mr. Gomez Abero:

This letter is submitted on behalf of our client, Moloney Securities Co., Inc.("Motaney," also sometimes

referred to herein as the "Respondent"}, a respondent agreeing to settle the subject administrative

proceeding brought by the Securities and Exchange Commission (the "Commission").

The Respondent hereby requests, pursuant to Rute 262 of Regulation A and Rute SOb of Regulation D ofthe

Commission promulgated under the Securities Act of 1433(the "Securities Act"), waivers ofany

disqualifications from relying on exemptions under Regulation Aand/or Rule 506 of Regulation 0 that will

disqualify the Respondent or otherwise be applicable as a result of fihe entry of an order in the subject

administrative proceeding against the Respondent {the "Order").

BASt~C~R0UN0

The Staff has engaged in settlement discussions with Respondent in connection with its investigation of

violations of Section 206(2), 206(3) and Section 207 of the Investment Advisers Act of 1940("Advisers

Act"}, as well as Section 206{ 4} of the Advisers Act and RuEe 206(4)-7 thereunder. As a result of these

discussions, Motaney submitted an Offer of Settlement(the "Offer"), and agreed to the Qrder, which was

presented by the staff of the Division of Enforcement of the Commission {the "Staff') to the Commission.

In the Offer, the Respondent agreed to consent to the issuance of the Order without admitting or denying

the matters set forth therein {other than those retadng to the jurisdiction of the Commission over it and the

subject matter solely for purposes of that action).

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the Order, ai7iong other Chings, states ~i7at ~tolar~ev ~~~~ `u ty'.~uEated ~ectian 20ti(2), Section 206(3),

~e~iio~, ~v; a~iu aklliUil ~uo(4j of rile A~i~isers r~r.[, ,3nd Kule LGbt-.l-7 thereunder. 5pecific3(ly, Che

C}rder states that Moloney repeatedly vio~at~d the Acivitiers Act foiloii~tng i~he issuance of rnuitiple

deficiency letters concerning the deficiencies identified by the staff of the Cammissiori's Office of

Compliance Inspections and Examination (herei~iafi:e~, "exa~z~ stiff"). according to 'the Order, the exam

staff conducted three examinations of Mol~,~ey and i55uer d~ficie~7cy (et~ers folto~ring each and giving

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procedures for ;ts

2009 ieiter

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for its advisory business, it had noC adequately implemented those policies and further had not properly

conducted principal transactions. Fo{.towing these exams, Motaney represented to the exam stafFthat it

would correct certain noted deficiencies, including but +got limited to its method of documenting principal

transacfions and its best execution practices.

The Order also states that Moloney received another deficiency letter in 2012 which identified that the

deficiencies regarding principal transactions and irnptementation of the firm's compliance policies and

procedures were angaing. The 2012 deficiency Letter noted that h1oloney continued to fait to:(i) properly

conduct principal transactions; {ii) accurately disclose its practices regarding principal transactions; and

(iii) implement the firm's compliance policies and procedures regarding principal transactions and best

execution.

It should be Hated that none of the conduct in the Order involved a scienker-based viotatian, and that the

cpnduct described in the Order did not give rise to any criminal charges or conviction.

The Order requires Respondent to cease and desist from committing any violations and any future violations

of Sections 206(2), zQ6(3}, 207 and 2Q6(4} of the Advisers Act {and Rute 206(4)-7 thereunder} and

requires that Moloney pay a civil monetary penalty of $34,000. Moloney is also ordered to comply with

certain undertakings, including retaining an independent comptiante tonsuttant. Finally, the Order

censured Maloney.

DISCUSSION

Moloney understands that the entry of the Qrder will disqualify it, affiLialed entities, arRt~ ~ther'issuers from

retying on certain exempfions under Regulation A andjor under Rute 506 of Regulation q promulgated

under the Securities Act. Moloney is concerned that, should it or any of its affiliated entities be deemed to

be an issuer, predecessor of the issuer, affiliated issuer, general partner or managing member of issuer,

promoter, underwriter of securities or in any other capacity described in Securities Act Rute 262 andjar Rufe

S06 for the purposes of Securities Act route 262(b}(3) and Rute 506{d)(l}(iv}, Moloney, its affiliated issuers,

and other issuers v~rith which it rs associated in one Qf those listed capacities ar~d which rely upon at may

rely upon these offering exemptions when issuing securities would be prohibited from doing so. The

Commission has the authority to waive khe Regulation A and Regulation D exemption disqualifications upon

a showing of gpod causeLhat such disqualifications are not necessary under the circumstances. See 17

C.F.R. §g 230.262 and 230.506(d)(2)(iii}.

ARMSIRUNGIEASDAtEi.LN

Mr. Gomez Aberc~

U.S. Securities and Excha~~ge Cornmissiun

September 21, 2016

Page 3

Moloney requests that the Cornmission waive anv disqualifying effects that the Order will have under

Regulation A and Rute 506 of Regulation L~ as a result ~f its entry as to Moloney on the following grounds:

Nature of Conduct. The Respondents' conduct addressed in the Order pertains to failure to properly

1.

conduct principal transactions. The conduct in the Order relates to certain failures to disclose practitesand

implement policies in the firm's investment advisory line of business concerning principal trades and/or

best execution. Further, and as noted above, the conduct did not involve scienter, and the Order does nat

require or' order any disgorgement or restitutic~~~ to any customer.

Ourah'on ofand RespansrCrfiry/orConduct.

Duration. Though the Order cites the "relevant period" as September 2009 to September

a.

the

2011,

actual conduct at issue began with the first exam staFt examination in 200b, welt before the

current president of Motoney's investrTrent advisory business, Ron Medley, was in a position of leadership,

and i~ctuded as a material event the second exam staff examination wfiich occurred in early 2Q09,just

months after Mr. Medley assumed his rote with the Moloney investment advisory business. Mr. Medley

covered

continued in his role as president of the advisory business throughout the "relevant period" and as

in the Order.

Responsibility. The majority of the Order focuses on principal trades, and in 2008 the firm

b.

for

separated, by virtue of voluntary resignations, from the two representatives who were responsible

staff's

exam

in

the

identified

effecting a large majority of the actual principal trade transactions that were

advisory

of

the

president

as

role

in

exams and deficiency letters. Similarly, while Mc. Medley continued his

business throughout the relevant period of the order, it should be noted that the firm has undergone

founder and

significant leadership changes in the past several years. In 2011 and likely earlier, the firm's

intreasingty

that

illness

worse

ly

long

progressive

and

a

battling

chief executive, John Moianey, Sr., began

2014. In

Juty

in

away

passed

eventually

he

until

duties

oversight

and

took him away from his leadership

time

appreciable

any

spend

longer

no

could

he

that

severe

so

became

illness

late 2013, when Mr. Motoney's

the

at

2013,

December

at the office, he determined to transfer leadership of the company to a successor. In

Executive

Chief

new

of

a

firm's annual compliance meeting, Mr. Moloney announced the appointment

Officer of the firm, Don Nancock. Additionally, in Juty 2015 the firm appointed a new Chief Compliance

Officer, Carrie Wrisberg. Finally and as a result of the changes described here and the corporate

has no

restructuring described in section 3, below, concerning remedial efforts, Mr. Medley currently

changed

now

has

leadership

firm`s

The

activities.

advisory

leadership or executive title related to the firm's

period."

"relevant

during

the

significantly from those who led it

by

Extensive Remedial Efforts - Prior to or~d As Part of the Order. The combination of steps taken

3.

Maloney

that

e

demonstrat

Moloney prior to issuance of the Order, and the dre er's required undertakings,

such conduct From

has taken material steps to address the conduct in the Order and to prevent similar

certain principat

for

clients

reimbursed

occurring in the future. As noted directly in the Qrder, Moloney

on began,

investigati

Staffs

the

before

years

several

in

fact,

transactions before the Order was issued and,

segregation

the

including

exams,

staffs

exam

in

the

identified

issues

Moloney also took steps to remediate

a year

of the firm's brokerage accounts from its advisory's accounts. In addition in April 2014, more than

Maloney, the firm

before the Order was issued and before the StafFs concerns were first communicated to

and

hired an independent compliance consultant to review the firm's written supervisory policies

Motaney

consulting,

procedures as well as its overall compliance structure. As a result of this review and

ARMS'Hi3N6 (EASOhtf ltP

tr. Gc,r„ez ghar~~

U.S. SE'CUIl~1PS al t1C~ EXCI18tlt:iF COt;1(11±s;ion

September 21, 2016

Page 4

adopted a revised and er~hanceci can,p(iance manual, and its net~~ l`Jritten Supervisory Policies and

...~~uu 1:u5 i~ica$cu iii r~Niil [.V i J. ~~~C ~V~':~UllUlil J P~`u~K ~isu ieei iiie r~irm co more cioseiy

inspect its supervision of outside investment ~3dvist~rs dncl their AUVS, trading attivities and documentation,

and to impternent. features by which those advisers a•.outd be more accountable to the firm through more

frequent reports, reviews and audits. These outside advisers notiv arcs required to engage third-party

consultants who tiviit facilitate super~~ision over their advisory activity.

I le Ilffll tld$ i1tS0 ell~ldflCE'Ci C~'(Cif!Il C+~it'i;j1 :It:,'i'-u~t•:;i•t_, •.,:'iill(1 [rt( i?tilt U~IfI

t(T1~COVLC~ CC'C~111U~Q~V,

SOC'C1f1Cd«4+includi!iyimprovement,111 tilt' 't~_•, p' ~?~t~t ~tpitlC ~OI11'lll.!(?{ii??10(!, CQ(~1fTlUiti!'u'Z1~1! f~;~i~:;' iJli~

(::Ui11fT11ti11C7 1:`.)R Si~':t';~OP. Illi'~.-_• i~ilf~t~ - '!'c_.;tit..,

..

.`t•;. ! CU .: :,,.~,

~nr•~'..

,~ ;,'!: 1U;`.P.l~~e;~"C.

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is

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system, and will ensure better and mare timely reviews and communications. The firm naw uses Global

Relay, a message archiving vendor featured in FINRA's Compliance Resource Provider Program to assist the

firm in satisfying FINRA and Commission rules. The firm has also worked to upgrade its overall surveillance

program, both in terms oftechnalogy and close adherence to related processes. The firm is using

Protegenti" Survei!Lance (ProSun~), an application fo; compliance and surveillance that organizes trades,

applies filters to support supervisory review responsibilities, and raptures/records supervisor's actions

regarding review and resolution. The technology enhancements should help the firm better track principal

trades and confirm proper documentation, and wilt improve processes for identifying gaps in processes and

repairing the same. These improvements wilt also add efficiencies to communications and supervision

regarding best execution, including through improved reports and greater and better recorded access to

and communication with the firm's clearing service.

More recently, the firm unilaterally and without direction from the Commission determined to hire another

consultant to focus more narrowly on its advisory business. This independent consultant completed a full

review of the advisory business in September 2015 that included, without limitation, analysis of principal

transaction and best execution issues. The consultant preliminary findings indicated no compliance

concerns Specific to principal transactions and best execution. As a result of preliminary findings and

expected additional recommendations, Moloney is in the process of revising its advisory's compliance

manuals and ADV. Moloney also determined to alter its registration so that it is nolonger actual-registered

firm —Moloney Securities Ca., Inc., is now in the process of becoming solely a registered broker-dealer, and

a successorinvestment odviserfirm, Moloney Securities Asset Management, ILC, and an affiliated but nonsuccessorinvestment adviser firm, Moloney Investment Advisory LLC, have both become registered with the

Commission. Further, the firm has atsohired a full-time senior level advisory business specialist to add

depth to its advisory management structure.

h

Fi~alty, as noted above, the personnel involved with the actual principal trade transactions which were a

material component o#the Order separated from the firm seve~at years ago, and new leadership was

recentlyinstatledond immediately revised and enhanced the firm's compliance program.

In addition to the remedial measures and work engaged by Moloney on a unilateral and voluntary basis, the

Order requires Moloney to comply with certain undertakings including, among other things:(a)engaging

for one year an independent compliance consultant to assist Moloney in developing and implementing

policies and procedures to promote the firm`s compliance with its principal transactions, best execution,

andJor disclosure requirements to advisory clients under the Advisers Act; and (b)certifying, in writing,

compliance with the undertaking(s). the work with Che consultant required by the Order wilt he in addition

ARMSTRONGTEASUALEt.I.P

Mr. Gomez Abero

U.S. Securities and Exchange ComiTjissior,

September 21, 20:6

Page 5

to that completed with the consultants hired in 2014 and 2015, and the consultant hired pursuant to the

Order will be different than those engaged for the previous work.

Material Negative Impact of Disquolifrcation. The disqualification of Moloney and any of its affiliates

4.

from retying on the exemptions under Regulation Aand/or Rule 506 of Regulation p would, we believe,

have a significant adverse impact on third parties that have recently retained, and may retain in the future,

Moianey and its affiliates in connection with transactions that rely on these exemptions. Moloney is quite

active in this space and, given its recent activity, pending offerings, recent additions to the Moloney

Securities broker ranks, and the final promulgation of Regulation A enhancements in mid-June 2015,

Regulation A and Regulation D activity in this year and/or next could rise to represent as much as 5%-10°!0

of the firm's overact revenue, or possibly even more.

For example, in 20]4 Moloney participated in one of the nation's few Regulation A transactions as a

placement agent, assisting with a successful five million dollar offering (Motoney continues to work with

the issuer in that matter qn items related to the offering). Moloney is currently involved with frur offers

under the revised Regulation A exemption in the 2012 Jumpstart Our Business Startups Act {the "JOBS

Act"); those four offerings have a projected combined value of more than S120 million. Further, Moloney

has recently sought to organize and lead conferences and events geared toward increased awareness and

use of the revised Reyutatiori A exemption, and has been active in commenting upon the same in

conjunction with regulatory rule-makings. The disqualifying impact of the Order would undermine these

past and current efforts to expand Moloney's role in the growing Regulation A community.

As to Regulation D, Rule Sib offerings, Moloney has paficipated in multiple transactions that relied on that

exemption in past years, including four recent Regulation D offerings with a combined value of

approximately 18 million - S12 million. Moloney is also working with issuers on six pending Regulation D

matters that could raise in excess of $60 million. In late 2015, Moloney also finalized an affiliation with a

large independent broker located on the West Caast which is extremely active in the Regulation d space and

which seeks to serve as the primary placement agent or a managing broker-dealer for multiple large Rute

506 offerings. This new affitiatian will greatly expand Motoney's Regulation D, Rule 506 activity in the

coming months (and has already led to the firm serving as the managing broker for two of the Regulation Q

offers), but would also be materially impacted, in a negative manner, were the Order's disqualifying efFect

to apply. Given this level of recent and current Regulation A and Regulation 0 activity, the disqualification

that would arise once the Order is issued would have a drastic effect on both Moloney and third parties that

have retained ar may retain Moloney in connection with transactions that rely an these exemptions.

Disclosure. Moloney wilt Furnish (or cause to be furnished), aver the one-year period during which

5.

it engages the independent compliance consultant as required try the Order, to each purchaser in a

Regulation A or Rule 506 offering that would otherwise be subject to disquatificationunder Rute 262(b)(3)

or Rute 506(d)(t) as a result of the Order, a description in writing of the Order a reasonable time prior to

sale.

Akr.steo!;~~ zc:sc~,t i~c

<i;. ~o~nez ~~~es;

..

~.~~. a«U+it~C~ dI1J C:«t:d 11 C:i' l.:J'f`i1!15~I'lil

~eptembe~ ? i.I.01•v

N~t~f~ b

6,

f'no; Refiejin Sirr~rtorCir,-c,:ns:nrrces. (he Commission sa~~. fit to vfaive the disqualifying impart of an

order in a matter with quite similar fi~idings and violations less than two years ago.i 7n addition Co that

recent analogous case, the Commission has granted relief undEr Rule 262 of Regulation A and Rule 506 of

Regulation D for similar reasons dr in similar circumstances to that at issue in this apptication.~ It snoutd

also be noted that this is the first ar:d only application for waiver of exemation dis~ualificatians ever made

h„

.J a:i„i,,,,o„

.._ .... ~

-..

In ~inl~t of t!~e :~r:,~~~eric -,~ •~i; ~* r~ 5r _,.,s _f,7 .~.__v~.

_. ~:2~ _. _ iii.,_ u S: u~. i` Coiivri i5 riuC riet:e5,<t";t is ic~r: ,.'a

circumstances and that Maloney has shown good cause that relief should 6e granted. Accordingly, we

respectfully urge the Commission, pursuant to Rute 262 of Regulation A and Rule 506(d)(2(ii) of Regulation

D, to waive the disqualification provisions in Regulation A and Rule 506 of Regutafion Q to the extent they

may be applicable as a result of the entry of the Order as to Moloney.

Please do not hesitate to cat( me at the number listed above if you have any que~tians.

Sincerely,

~~~~~

~'1

Matthew D. Kitzi

MDKJsIh

~ See Dominick &Dominick k.LC, S.E.C. No-A~C~or: Letter tpu6. avail. July 23. 2414). In the Dominick& Qamrnick

matter, the respondent was found to have violated Sections 206(2}, 246(3), 206(4 (and Rute 206(4)-7 thereunder

and 207 of the Advisers Act,just as Moloney was charged. In the Dominick &Dominick matter, however, the

respondent was ordered to pay a civil monetary penalty that was mare than double that required of Moloney (Dominick

& Dominick paid a X75,000 penalty, wh+te Moloney has only been ordered to pay X34,000). further, Dominick &

Dominick was required to pay nearly S 150,004 in disgorgement and interest to ttients, white Moloney was not required

to pay any disgorgement whatsoever. The Commission granted the waiver in Dominick &Dominick.

z See, e.g., Royal Alliance Associates, Inc.. SagePoint ~inanrial. Inc. and f5C Securities Corporation. S.E.C, Np-A~tias,

Lettar {pub. avail. Mar. 4, 2Q1ti); Meri t, lynch. Pierce, Feiner artd Smith Intorpor~ted, S.E.C. No-Action letter(pub.

avail. June i, ZOi5?: BiackRock Advisers, ILC. S.E.C. Na-Action letter fpi~b. ava=(. Aorit 20, 201.5 j; N.D. Vest

[nvestment Sec;~rik~es, I;7r., S.E.C. Nr Ac!~or: i.et~er (p~ib. ava+t. March 4, 20t5); Jefferies LLC, S.E.C. tvo-Action Letter

{pub. avail. Marsh 12, 20t=,;t; f.re~~~t~r 5 r.ss~e Grc~i.,p AC,, S.E.C. No-Act~~n letter {pub. avail, ~ebru~ry 21, 20i~4); Instinet

Ll.l, S.E.C. No-Action ~ette~ ;dub. a~ra=~, Oec. 26< 2023); R$S Securities Irt., S.E.C. No-Action Letter (pub. avail Nay.

25, 2013}; A.R. SchmeiGier & Co., S.E.C. No-Actian Letter (pub. avail ,luly 31, 2013}; ~.p. Morgan Securities LLC, et

aL, S.E.C. No-Action letter {pub. ava~L Jan. 8, 2013); and J.P. Turner 8, Company, LLC and Witham L. Meto, S.E.C. NoAction letter (puh. avaiE. Sept. ?0, 21312).

aRMSfRCNGfE~SD~tE<~