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  • BrokerCheck Report

    PIPER JAFFRAY & CO.

    Section Title

    Report Summary

    Firm History

    CRD# 665

    1

    9

    Firm Profile 2 - 8

    Page(s)

    Firm Operations 10 - 20

    Disclosure Events 21

    http://www.finra.org

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    brokercheck.finra.org

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  • PIPER JAFFRAY & CO.

    CRD# 665

    SEC# 8-15204

    Main Office Location

    800 NICOLLET MALLMINNEAPOLIS, MN 55402-7020Regulated by FINRA Kansas City Office

    Mailing Address

    800 NICOLLET MALLSUITE 1000MINNEAPOLIS, MN 55402-7020

    This firm is a brokerage firm and an investmentadviser firm. For more information aboutinvestment adviser firms, visit the SEC'sInvestment Adviser Public Disclosure website at:

    Business Telephone Number

    612-303-6000

    https://www.adviserinfo.sec.gov

    Report Summary for this Firm

    This report summary provides an overview of the brokerage firm. Additional information for this firm can be foundin the detailed report.

    Disclosure Events

    Brokerage firms are required to disclose certaincriminal matters, regulatory actions, civil judicialproceedings and financial matters in which the firm orone of its control affiliates has been involved.

    Are there events disclosed about this firm? Yes

    The following types of disclosures have beenreported:

    Type Count

    Regulatory Event 134

    Civil Event 1

    Arbitration 55

    Firm Profile

    This firm is classified as a corporation.

    This firm was formed in Delaware on 07/28/1969.

    Its fiscal year ends in December.

    Firm History

    Information relating to the brokerage firm's historysuch as other business names and successions(e.g., mergers, acquisitions) can be found in thedetailed report.

    Firm Operations

    Is this brokerage firm currently suspended with anyregulator? No

    This firm conducts 16 types of businesses.

    This firm is affiliated with financial or investmentinstitutions.

    This firm has referral or financial arrangements withother brokers or dealers.

    This firm is registered with:

    the SEC 10 Self-Regulatory Organizations 53 U.S. states and territories

    www.finra.org/brokercheck User Guidance

    12018 FINRA. All rights reserved. Report about PIPER JAFFRAY & CO.

    https://adviserinfo.sec.gov/IAPD/IAPDSummaryRouter.aspx?IndividualID=-1&FirmID=665&Source=Reporthttp://www.finra.orghttp://www.finra.org/brokercheckhttp://www.finra.org/brokercheck_reports

  • www.finra.org/brokercheck User Guidance

    This firm is classified as a corporation.

    This firm was formed in Delaware on 07/28/1969.

    CRD#

    This section provides the brokerage firm's full legal name, "Doing Business As" name, business and mailingaddresses, telephone number, and any alternate name by which the firm conducts business and where such name isused.

    Firm Profile

    Firm Names and Locations

    Its fiscal year ends in December.

    PIPER JAFFRAY & CO.

    SEC#

    665

    8-15204

    Main Office Location

    Mailing Address

    Business Telephone Number

    Doing business as PIPER JAFFRAY & CO.

    612-303-6000

    Regulated by FINRA Kansas City Office

    800 NICOLLET MALLMINNEAPOLIS, MN 55402-7020

    800 NICOLLET MALLSUITE 1000MINNEAPOLIS, MN 55402-7020

    Other Names of this Firm

    Name Where is it used

    HOPWOOD LANE, DIVISION OF PIPER JAFFRAY & CO. MN, NY, WA

    SIMMONS & COMPANY INTERNATIONAL/ENERGY SPECIALISTS OFPIPER JAFF

    AK, AL, AR, AZ, CA,CO, CT, DC, DE, FL,GA, HI, IA, ID, IL, IN,KS, KY, LA, MA, MD,ME, MI, MN, MO,MS, MT, NC, ND, NE,NH, NJ, NM, NV, NY,OH, OK, OR, PA, RI,SC, SD, TN, TX, UT,VA, VT, WA, WI, WV,WY

    22018 FINRA. All rights reserved. Report about PIPER JAFFRAY & CO.

    http://www.finra.org/brokercheckhttp://www.finra.org/brokercheck_reportshttp://www.finra.org

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    AK, AL, AR, AZ, CA,CO, CT, DC, DE, FL,GA, HI, IA, ID, IL, IN,KS, KY, LA, MA, MD,ME, MI, MN, MO,MS, MT, NC, ND, NE,NH, NJ, NM, NV, NY,OH, OK, OR, PA, RI,SC, SD, TN, TX, UT,VA, VT, WA, WI, WV,WY

    32018 FINRA. All rights reserved. Report about PIPER JAFFRAY & CO.

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  • www.finra.org/brokercheck User Guidance

    This section provides information relating to all direct owners and executive officers of the brokerage firm.

    Direct Owners and Executive Officers

    Firm Profile

    Position

    Percentage of Ownership

    Is this a public reportingcompany?

    Position Start Date

    Does this owner direct themanagement or policies ofthe firm?

    PIPER JAFFRAY COMPANIES

    PARENT

    75% or more

    Yes

    Domestic Entity

    12/2003

    Yes

    Is this a domestic or foreignentity or an individual?

    Legal Name & CRD# (if any):

    Position

    Percentage of Ownership

    Is this a public reportingcompany?

    Position Start Date

    Does this owner direct themanagement or policies ofthe firm?

    ABRAHAM, CHAD RICHARD

    CEO; BOARD MEMBER

    Less than 5%

    No

    Individual

    01/2018

    Yes

    2190836

    Is this a domestic or foreignentity or an individual?

    Legal Name & CRD# (if any):

    Position

    Percentage of Ownership

    Position Start Date

    CARTER, TIMOTHY LEE

    CFO; BOARD MEMBER

    Less than 5%

    Individual

    01/2018

    2676342

    Is this a domestic or foreignentity or an individual?

    Legal Name & CRD# (if any):

    42018 FINRA. All rights reserved. Report about PIPER JAFFRAY & CO.

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  • www.finra.org/brokercheck User Guidance

    Direct Owners and Executive Officers (continued)

    Firm Profile

    Percentage of Ownership

    Is this a public reportingcompany?

    Does this owner direct themanagement or policies ofthe firm?

    Less than 5%

    No

    Yes

    Position

    Percentage of Ownership

    Is this a public reportingcompany?

    Position Start Date

    Does this owner direct themanagement or policies ofthe firm?

    DUFF, ANDREW SCOTT

    CHAIRMAN; BOARD MEMBER

    Less than 5%

    No

    Individual

    01/1996

    Yes

    719526

    Is this a domestic or foreignentity or an individual?

    Legal Name & CRD# (if any):

    Position

    Percentage of Ownership

    Is this a public reportingcompany?

    Position Start Date

    Does this owner direct themanagement or policies ofthe firm?

    FAIRMAN, FRANCIS EVARTS IV

    HEAD OF PUBLIC FINANCE SERVICES; BOARD MEMBER

    Less than 5%

    No

    Individual

    07/2005

    Yes

    1171131

    Is this a domestic or foreignentity or an individual?

    Legal Name & CRD# (if any):

    GEELAN, JOHN WILLIAM JR.

    4905460

    Legal Name & CRD# (if any):

    52018 FINRA. All rights reserved. Report about PIPER JAFFRAY & CO.

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  • www.finra.org/brokercheck User Guidance

    Direct Owners and Executive Officers (continued)

    Firm Profile

    Position

    Percentage of Ownership

    Is this a public reportingcompany?

    Position Start Date

    Does this owner direct themanagement or policies ofthe firm?

    CHIEF LEGAL OFFICER

    Less than 5%

    No

    Individual

    01/2013

    Yes

    4905460

    Is this a domestic or foreignentity or an individual?

    Position

    Percentage of Ownership

    Is this a public reportingcompany?

    Position Start Date

    Does this owner direct themanagement or policies ofthe firm?

    LARUE, ROBERT SCOTT

    HEAD OF INVESTMENT BANKING; BOARD MEMBER

    Less than 5%

    No

    Individual

    01/2018

    Yes

    3185126

    Is this a domestic or foreignentity or an individual?

    Legal Name & CRD# (if any):

    Position

    Percentage of Ownership

    Position Start Date

    Does this owner direct themanagement or policies ofthe firm?

    MCCAGUE, ANNCHARLOTTE

    CHIEF COMPLIANCE OFFICER

    Less than 5%

    Individual

    12/2005

    Yes

    1108448

    Is this a domestic or foreignentity or an individual?

    Legal Name & CRD# (if any):

    62018 FINRA. All rights reserved. Report about PIPER JAFFRAY & CO.

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    Direct Owners and Executive Officers (continued)

    Firm Profile

    Is this a public reportingcompany?

    Does this owner direct themanagement or policies ofthe firm?

    No

    Yes

    Position

    Percentage of Ownership

    Is this a public reportingcompany?

    Position Start Date

    Does this owner direct themanagement or policies ofthe firm?

    SCHONEMAN, DEBBRA LYNN

    PRESIDENT; HEAD OF EQUITIES; BOARD MEMBER

    Less than 5%

    No

    Individual

    01/2018

    Yes

    1980635

    Is this a domestic or foreignentity or an individual?

    Legal Name & CRD# (if any):

    Position

    Percentage of Ownership

    Is this a public reportingcompany?

    Position Start Date

    Does this owner direct themanagement or policies ofthe firm?

    WINGES, MARTIN BRADLEY

    HEAD OF FIXED INCOME SERVICES; BOARD MEMBER

    Less than 5%

    No

    Individual

    01/2009

    Yes

    1929509

    Is this a domestic or foreignentity or an individual?

    Legal Name & CRD# (if any):

    72018 FINRA. All rights reserved. Report about PIPER JAFFRAY & CO.

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    This section provides information relating to any indirect owners of the brokerage firm.

    Indirect Owners

    Firm Profile

    No information reported.

    82018 FINRA. All rights reserved. Report about PIPER JAFFRAY & CO.

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    Firm History

    This section provides information relating to any successions (e.g., mergers, acquisitions) involving the firm.

    No information reported.

    92018 FINRA. All rights reserved. Report about PIPER JAFFRAY & CO.

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    Firm Operations

    RegistrationsThis section provides information about the regulators (Securities and Exchange Commission (SEC), self-regulatoryorganizations (SROs), and U.S. states and territories) with which the brokerage firm is currently registered andlicensed, the date the license became effective, and certain information about the firm's SEC registration.

    This firm is currently registered with the SEC, 10 SROs and 53 U.S. states and territories.

    SEC Registration Questions

    This firm is registered with the SEC as:

    A broker-dealer:

    A broker-dealer and government securities broker or dealer:

    A government securities broker or dealer only:

    This firm has ceased activity as a government securities broker or dealer:

    Yes

    Yes

    No

    No

    Federal Regulator Status Date Effective

    SEC Approved 10/24/1969

    Self-Regulatory Organization Status Date Effective

    FINRA Approved 10/16/1936

    Cboe BYX Exchange, Inc. Approved 11/15/2012

    Cboe BZX Exchange, Inc. Approved 10/15/2008

    Cboe EDGA Exchange, Inc. Approved 05/14/2010

    Cboe EDGX Exchange, Inc. Approved 05/14/2010

    Investors' Exchange LLC Approved 08/10/2016

    NYSE American LLC Approved 02/25/1988

    NYSE Arca, Inc. Approved 04/09/2003

    Nasdaq Stock Market Approved 07/12/2006

    New York Stock Exchange Approved 11/17/1982

    102018 FINRA. All rights reserved. Report about PIPER JAFFRAY & CO.

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    Firm Operations

    Registrations (continued)

    U.S. States &Territories

    Status Date Effective

    Alabama Approved 10/24/1981

    Alaska Approved 08/10/1972

    Arizona Approved 03/10/1976

    Arkansas Approved 05/24/1985

    California Approved 01/02/1973

    Colorado Approved 02/01/1983

    Connecticut Approved 06/21/1976

    Delaware Approved 10/06/1981

    District of Columbia Approved 04/21/1983

    Florida Approved 04/27/1983

    Georgia Approved 09/22/1981

    Hawaii Approved 12/08/1980

    Idaho Approved 01/01/1971

    Illinois Approved 06/29/1970

    Indiana Approved 10/21/1981

    Iowa Approved 07/14/1983

    Kansas Approved 04/23/1975

    Kentucky Approved 07/16/1982

    Louisiana Approved 04/20/1983

    Maine Approved 04/27/1984

    Maryland Approved 10/03/1981

    Massachusetts Approved 07/31/1981

    Michigan Approved 02/03/1983

    Minnesota Approved 07/15/1982

    Mississippi Approved 04/20/1984

    Missouri Approved 07/18/1983

    Montana Approved 04/20/1983

    Nebraska Approved 10/08/1981

    Nevada Approved 07/18/1983

    New Hampshire Approved 08/02/1983

    New Jersey Approved 07/14/1983

    New Mexico Approved 10/07/1981

    New York Approved 01/02/1985

    U.S. States &Territories

    Status Date Effective

    North Carolina Approved 07/15/1982

    North Dakota Approved 10/21/1981

    Ohio Approved 07/16/1982

    Oklahoma Approved 07/17/1982

    Oregon Approved 10/24/1981

    Pennsylvania Approved 01/09/1980

    Puerto Rico Approved 06/04/1998

    Rhode Island Approved 05/07/1984

    South Carolina Approved 04/28/1982

    South Dakota Approved 07/15/1982

    Tennessee Approved 08/17/1981

    Texas Approved 07/25/1983

    Utah Approved 04/21/1983

    Vermont Approved 05/01/1984

    Virgin Islands Approved 06/09/2005

    Virginia Approved 09/22/1981

    Washington Approved 04/20/1983

    West Virginia Approved 11/07/1983

    Wisconsin Approved 08/29/1969

    Wyoming Approved 06/29/1965

    112018 FINRA. All rights reserved. Report about PIPER JAFFRAY & CO.

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    Firm Operations

    Types of BusinessThis section provides the types of business, including non-securities business, the brokerage firm is engaged in orexpects to be engaged in.

    Other Types of Business

    This firm does not effect transactions in commodities, commodity futures, or commodity options.This firm does engage in other non-securities business.

    Non-Securities Business Description: APPLICANT ACTS AS A SWAP ADVISOR FOR THE PURPOSE OFENTERING INTO SWAP CONTRACTS ON A LIMITED BASIS.

    This firm currently conducts 16 types of businesses.

    Types of Business

    Exchange member engaged in exchange commission business other than floor activities

    Broker or dealer making inter-dealer markets in corporation securities over-the-counter

    Broker or dealer retailing corporate equity securities over-the-counter

    Broker or dealer selling corporate debt securities

    Underwriter or selling group participant (corporate securities other than mutual funds)

    Mutual fund retailer

    U S. government securities dealer

    U S. government securities broker

    Municipal securities dealer

    Municipal securities broker

    Put and call broker or dealer or option writer

    Broker or dealer selling securities of non-profit organizations (e.g., churches, hospitals)

    Investment advisory services

    Trading securities for own account

    Private placements of securities

    Broker or dealer selling interests in mortgages or other receivables

    122018 FINRA. All rights reserved. Report about PIPER JAFFRAY & CO.

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    Firm Operations

    Clearing Arrangements

    This firm does not hold or maintain funds or securities or provide clearing services for other broker-dealer(s).

    Introducing Arrangements

    This firm does refer or introduce customers to other brokers and dealers.

    Name: PERSHING LLC

    Business Address: ONE PERSHING PLAZA10TH FLOORJERSEY CITY, NJ 07399

    CRD #: 7560

    Effective Date: 11/06/2015

    Description: FULLY DISCLOSED CORRESPONDENT CLEARING RELATIONSHIP;

    132018 FINRA. All rights reserved. Report about PIPER JAFFRAY & CO.

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    Firm Operations

    Industry Arrangements

    This firm does have books or records maintained by a third party.

    This firm does have accounts, funds, or securities maintained by a third party.

    This firm does have customer accounts, funds, or securities maintained by a third party.

    Name: BROADRIDGE FINANCIAL SOLUTIONS, INC.

    Business Address: 1981 MARCUS AVENUELAKE SUCCESS, NY 11042

    Effective Date: 09/07/2007

    Description: BOOKS AND RECORDS RETENTION

    Name: OMGEO LLC

    Business Address: 55 WATER STREETNEW YORK, NY 10041

    Effective Date: 03/01/2010

    Description: TO MAINTAIN AND PRESERVE CONFIRMATIONS FOR RECORDRETENTION

    Name: BNP PARIBAS PRIME BROKERAGE, INC.

    Business Address: 787 7TH AVENUENEW YORK, NY 100169

    CRD #: 24962

    Effective Date: 07/29/2016

    Description: PROPRIETARY PRIME BROKER ACCOUNT OF PIPER JAFFRAY & CO.HELD UNDER A PAB AGREEMENT.

    Name: PERSHING LLC

    Business Address: ONE PERSHING PLAZA10TH FLOORJERSEY CITY, NJ 07399

    CRD #: 7560

    Effective Date: 11/06/2015

    Description: FULLY DISCLOSED CORRESPONDENT CLEARING ARRANGEMENT.

    Name: PERSHING LLC

    CRD #: 7560

    142018 FINRA. All rights reserved. Report about PIPER JAFFRAY & CO.

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    Firm Operations

    Industry Arrangements (continued)

    This firm does not have individuals who control its management or policies through agreement.

    This firm does not have individuals who wholly or partly finance the firm's business.

    Control Persons/Financing

    Business Address: ONE PERSHING PLAZA10TH FLOORJERSEY CITY, NJ 07399

    CRD #: 7560

    Effective Date: 11/06/2015

    Description: FULLY DISCLOSED CORRESPONDENT CLEARING RELATIONSHIPS.

    152018 FINRA. All rights reserved. Report about PIPER JAFFRAY & CO.

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    Firm Operations

    Organization AffiliatesThis section provides information on control relationships the firm has with other firms in the securities, investmentadvisory, or banking business.

    This firm is, directly or indirectly:

    in control of controlled by or under common control withthe following partnerships, corporations, or other organizations engaged in the securities or investmentadvisory business.

    No

    No

    No

    12/07/2017

    800 NICOLLET MALLSUITE 1000MINNEAPOLIS, MN 55402

    PIPER JAFFRAY FINANCE LLC is under common control with the firm.

    UNDER COMMON CONTROL BY PARENT HOLDING COMPANY PIPERJAFFRAY COMPANIES

    Description:

    Investment AdvisoryActivities:

    Securities Activities:

    Country:

    Foreign Entity:

    Effective Date:

    Business Address:

    No

    Yes

    No

    07/06/2017

    800 NICOLLET MALLMINNEAPOLIS, MN 55402

    PIPER JAFFRAY FINANCIAL LLC is under common control with the firm.

    UNDER COMMON CONTROL BY PARENT HOLDING COMPANY PIPERJAFFRAY COMPANIES

    Description:

    Investment AdvisoryActivities:

    Securities Activities:

    Country:

    Foreign Entity:

    Effective Date:

    Business Address:

    800 NICOLLET MALLMINNEAPOLIS, MN 55402

    PIPER JAFFRAY FINANCIAL TRUST DEPOSITOR, LLC is under common control with the firm.

    Business Address: 162018 FINRA. All rights reserved. Report about PIPER JAFFRAY & CO.

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    Firm Operations

    Organization Affiliates (continued)

    No

    Yes

    No

    07/06/2017

    800 NICOLLET MALLMINNEAPOLIS, MN 55402

    UNDER COMMON CONTROL BY PARENT HOLDING COMPANY PIPERJAFFRAY COMPANIES

    Description:

    Investment AdvisoryActivities:

    Securities Activities:

    Country:

    Foreign Entity:

    Effective Date:

    Business Address:

    Yes

    No

    GUERNSEY

    Yes

    02/29/2016

    PO BOX 656,EAST WING, TRAFALGAR COURT, LES BANQUESST PETER PORT, GUERNSEY (UK) GY1 3PP

    PARALLEL GENERAL PARTNER LIMITED is under common control with the firm.

    UNDER COMMON CONTROL BY PARENT HOLDING COMPANY PIPERJAFFRAY COMPANIES. MERGED INTO PIPER JAFFRAY LTD AS OF MAY 1,2017

    Description:

    Investment AdvisoryActivities:

    Securities Activities:

    Country:

    Foreign Entity:

    Effective Date:

    Business Address:

    No

    Yes

    CHINA

    Yes

    10/10/2012

    LEVEL 16, NEXXUS BUILDING41 CONNAUGHT RD., CENTRALHONG KONG, HONG KONG

    PIPER JAFFRAY HONG KONG LIMITED is under common control with the firm.

    Investment AdvisoryActivities:

    Securities Activities:

    Country:

    Foreign Entity:

    Effective Date:

    Business Address:

    172018 FINRA. All rights reserved. Report about PIPER JAFFRAY & CO.

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    Firm Operations

    Organization Affiliates (continued)

    No

    ENTITY IS OWNED BY PIPER JAFFRAY COMPANIES, THE HOLDINGCOMPANY AND UNDER COMMON CONTROL WITH PIPER JAFFRAY & CO.

    Description:

    Investment AdvisoryActivities:

    Yes

    No

    No

    11/30/2012

    800 NICOLLET MALLMINNEAPOLIS, MN 55402

    165620

    PJC CAPITAL PARTNERS LLC is under common control with the firm.

    UNDER COMMON CONTROL BY PARENT HOLDING COMPANY PIPERJAFFRAY COMPANIES

    Description:

    Investment AdvisoryActivities:

    Securities Activities:

    Country:

    Foreign Entity:

    Effective Date:

    Business Address:

    CRD #:

    Yes

    No

    No

    03/01/2010

    180 N. STETSON AVECHICAGO, IL 60601

    108254

    ADVISORY RESEARCH INC is under common control with the firm.

    ADVISORY RESEARCH INC IS A FEDERALLY REGISTERED INVESTMENTADVISER WHICH IS UNDER COMMON CONTROL BY PARENT HOLDINGCOMPANY PIPER JAFFRAY COMPANIES

    Description:

    Investment AdvisoryActivities:

    Securities Activities:

    Country:

    Foreign Entity:

    Effective Date:

    Business Address:

    CRD #:

    145876

    PIPER JAFFRAY INVESTMENT MANAGEMENT, LLC is under common control with the firm.

    CRD #:

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    Firm Operations

    Organization Affiliates (continued)

    Yes

    No

    No

    05/12/2008

    800 NICOLLET MALLMINNEAPOLIS, MN 55402

    UNDER COMMON CONTROL BY PARENT HOLDING COMPANY PIPERJAFFRAY COMPANIES

    Description:

    Investment AdvisoryActivities:

    Securities Activities:

    Country:

    Foreign Entity:

    Effective Date:

    Business Address:

    Yes

    Yes

    UNITED KINGDOM

    Yes

    10/06/2001

    13TH FLOOR88 WOOD ST.LONDON EC2V 7RS, ENGLAND

    163758

    PIPER JAFFRAY LTD is under common control with the firm.

    BROKER-DEALER REGISTERED THROUGH THE FINANCIAL CONDUCTAUTHORITY WHICH IS UNDER COMMON CONTROL BY PARENT HOLDINGCOMPANY PIPER JAFFRAY COMPANIES.

    Description:

    Investment AdvisoryActivities:

    Securities Activities:

    Country:

    Foreign Entity:

    Effective Date:

    Business Address:

    CRD #:

    No

    Yes

    DELAWARE

    No

    03/14/1983

    800 NICOLLET MALLMINNEAPOLIS, MN 55402

    PIPER JAFFRAY VENTURES INC. is under common control with the firm.

    Investment AdvisoryActivities:

    Securities Activities:

    Country:

    Foreign Entity:

    Effective Date:

    Business Address:

    192018 FINRA. All rights reserved. Report about PIPER JAFFRAY & CO.

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    Firm Operations

    Organization Affiliates (continued)

    No

    ORGANIZES AND MANAGES FUNDS FOR INVESTING IN PRIVATELY HELDCOMPANIES. PIPER JAFFRAY VENTURES, INC IS UNDER COMMONCONTROL BY PARENT HOLDING COMPANY PIPER JAFFRAY COMPANIES

    Description:

    Investment AdvisoryActivities:

    This firm is not directly or indirectly, controlled by the following:

    bank holding company national bank state member bank of the Federal Reserve System state non-member bank savings bank or association credit union or foreign bank

    202018 FINRA. All rights reserved. Report about PIPER JAFFRAY & CO.

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  • www.finra.org/brokercheck User Guidance

    Disclosure Events

    All firms registered to sell securities or provide investment advice are required to disclose regulatory actions, criminal orcivil judicial proceedings, and certain financial matters in which the firm or one of its control affiliates has been involved.For your convenience, below is a matrix of the number and status of disclosure events involving this brokerage firm orone of its control affiliates. Further information regarding these events can be found in the subsequent pages of thisreport.

    Final On AppealPending

    Regulatory Event 0 134 0

    Civil Event 0 1 0

    Arbitration N/A 55 N/A

    212018 FINRA. All rights reserved. Report about PIPER JAFFRAY & CO.

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    Disclosure Event Details

    What you should know about reported disclosure events:

    1. BrokerCheck provides details for any disclosure event that was reported in CRD. It also includessummary information regarding FINRA arbitration awards in cases where the brokerage firm wasnamed as a respondent.

    2. Certain thresholds must be met before an event is reported to CRD, for example: o A law enforcement agency must file formal charges before a brokerage firm is required to disclose a

    particular criminal event.3. Disclosure events in BrokerCheck reports come from different sources:

    o Disclosure events for this brokerage firm were reported by the firm and/or regulators. When the firmand a regulator report information for the same event, both versions of the event will appear in theBrokerCheck report. The different versions will be separated by a solid line with the reporting sourcelabeled.

    4. There are different statuses and dispositions for disclosure events: o A disclosure event may have a status of pending, on appeal, or final.

    A "pending" event involves allegations that have not been proven or formally adjudicated. An event that is "on appeal" involves allegations that have been adjudicated but are currently

    being appealed. A "final" event has been concluded and its resolution is not subject to change.

    o A final event generally has a disposition of adjudicated, settled or otherwise resolved. An "adjudicated" matter includes a disposition by (1) a court of law in a criminal or civil matter,

    or (2) an administrative panel in an action brought by a regulator that is contested by the partycharged with some alleged wrongdoing.

    A "settled" matter generally involves an agreement by the parties to resolve the matter.Please note that firms may choose to settle customer disputes or regulatory matters forbusiness or other reasons.

    A "resolved" matter usually involves no payment to the customer and no finding ofwrongdoing on the part of the individual broker. Such matters generally involve customerdisputes.

    5. You may wish to contact the brokerage firm to obtain further information regarding any of thedisclosure events contained in this BrokerCheck report.

    Regulatory - Final

    This type of disclosure event involves (1) a final, formal proceeding initiated by a regulatory authority (e.g., a statesecurities agency, self-regulatory organization, federal regulator such as the U.S. Securities and Exchange Commission,foreign financial regulatory body) for a violation of investment-related rules or regulations; or (2) a revocation orsuspension of the authority of a brokerage firm or its control affiliate to act as an attorney, accountant or federalcontractor.

    Disclosure 1 of 134

    Reporting Source: Regulator

    Allegations: WITHOUT ADMITTING OR DENYING THE FINDINGS, THE FIRM CONSENTEDTO THE SANCTIONS AND TO THE ENTRY OF FINDINGS THAT IT UNTIMELYSUBMITTED DOCUMENTS RELATING TO PRIMARY OFFERINGS OFMUNICIPAL SECURITIES TO THE ELECTRONIC MUNICIPAL MARKET ACCESSDATABASE (EMMA). THE FINDINGS STATED THAT THE UNTIMELYSUBMISSIONS RESULTED FROM TURNOVER IN THE FIRM'S DEPARTMENTTHAT HANDLED THE DOCUMENTS, A SITUATION THAT THE FIRM'S WSPSDID NOT ADEQUATELY ADDRESS.

    Current Status: Final

    222018 FINRA. All rights reserved. Report about PIPER JAFFRAY & CO.

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    Initiated By: FINRA

    Principal Sanction(s)/ReliefSought:

    Other

    Other Sanction(s)/ReliefSought:

    N/A

    Date Initiated: 07/07/2016

    Docket/Case Number: 2015043589201

    Principal Product Type: Other

    Other Product Type(s): PRIMARY OFFERINGS OF MUNICIPAL SECURITIES

    Allegations: WITHOUT ADMITTING OR DENYING THE FINDINGS, THE FIRM CONSENTEDTO THE SANCTIONS AND TO THE ENTRY OF FINDINGS THAT IT UNTIMELYSUBMITTED DOCUMENTS RELATING TO PRIMARY OFFERINGS OFMUNICIPAL SECURITIES TO THE ELECTRONIC MUNICIPAL MARKET ACCESSDATABASE (EMMA). THE FINDINGS STATED THAT THE UNTIMELYSUBMISSIONS RESULTED FROM TURNOVER IN THE FIRM'S DEPARTMENTTHAT HANDLED THE DOCUMENTS, A SITUATION THAT THE FIRM'S WSPSDID NOT ADEQUATELY ADDRESS.

    Resolution Date: 07/07/2016

    Resolution:

    Other Sanctions Ordered:

    Sanction Details: THE FIRM WAS CENSURED AND FINED $12,500. FINE PAID IN FULL ONAUGUST 8, 2016.

    Does the order constitute afinal order based onviolations of any laws orregulations that prohibitfraudulent, manipulative, ordeceptive conduct?

    No

    Sanctions Ordered: CensureMonetary/Fine $12,500.00

    Acceptance, Waiver & Consent(AWC)

    iReporting Source: Firm

    Allegations: WITHOUT ADMITTING OR DENYING THE FINDINGS, THE FIRM CONSENTEDTO THE SANCTIONS AND TO THE ENTRY OF FINDINGS THAT IT UNTIMELYSUBMITTED DOCUMENTS RELATING TO PRIMARY OFFERINGS OFMUNICIPAL SECURITIES TO THE ELECTRONIC MUNICIPAL MARKET ACCESSDATABASE (EMMA). THE FINDINGS STATED THAT THE UNTIMELYSUBMISSIONS RESULTED FROM TURNOVER IN THE FIRM'S DEPARTMENTTHAT HANDLED THE DOCUMENTS, A SITUATION THAT THE FIRM'S WSPSDID NOT ADEQUATELY ADDRESS.

    Current Status: Final

    232018 FINRA. All rights reserved. Report about PIPER JAFFRAY & CO.

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    Initiated By: FINRA

    Principal Sanction(s)/ReliefSought:

    Other

    Other Sanction(s)/ReliefSought:

    N/A

    Date Initiated: 07/07/2016

    Docket/Case Number: 2015043589201

    Principal Product Type: Other

    Other Product Type(s): PRIMARY OFFERINGS OF MUNICIPAL SECURITIES

    WITHOUT ADMITTING OR DENYING THE FINDINGS, THE FIRM CONSENTEDTO THE SANCTIONS AND TO THE ENTRY OF FINDINGS THAT IT UNTIMELYSUBMITTED DOCUMENTS RELATING TO PRIMARY OFFERINGS OFMUNICIPAL SECURITIES TO THE ELECTRONIC MUNICIPAL MARKET ACCESSDATABASE (EMMA). THE FINDINGS STATED THAT THE UNTIMELYSUBMISSIONS RESULTED FROM TURNOVER IN THE FIRM'S DEPARTMENTTHAT HANDLED THE DOCUMENTS, A SITUATION THAT THE FIRM'S WSPSDID NOT ADEQUATELY ADDRESS.

    Resolution Date: 07/07/2016

    Resolution:

    Other Sanctions Ordered:

    Sanction Details: THE FIRM WAS CENSURED AND FINED $12,500

    Sanctions Ordered: CensureMonetary/Fine $12,500.00

    Acceptance, Waiver & Consent(AWC)

    Disclosure 2 of 134

    i

    Reporting Source: Regulator

    Allegations: SEC ADMIN RELEASES 33-9837; 34-75231, JUNE 18, 2015: THE SECURITIESAND EXCHANGE COMMISSION DEEMS IT APPROPRIATE AND IN THEPUBLIC INTEREST THAT PUBLIC ADMINISTRATIVE AND CEASE-AND-DESISTPROCEEDINGS BE, AND HEREBY ARE, INSTITUTED AGAINST PIPERJAFFRAY & CO. ("RESPONDENT"). RESPONDENT WILLFULLY VIOLATEDSECTION 17(A)(2) OF THE SECURITIES ACT. THIS MATTER INVOLVESVIOLATIONS OF AN ANTIFRAUD PROVISION OF THE FEDERAL SECURITIESLAWS IN CONNECTION WITH RESPONDENT'S UNDERWRITING OF CERTAINMUNICIPAL SECURITIES OFFERINGS. RESPONDENT, A REGISTEREDBROKER-DEALER, CONDUCTED INADEQUATE DUE DILIGENCE IN CERTAINOFFERINGS AND AS A RESULT, FAILED TO FORM A REASONABLE BASISFOR BELIEVING THE TRUTHFULNESS OF CERTAIN MATERIALREPRESENTATIONS IN OFFICIAL STATEMENTS ISSUED IN CONNECTIONWITH THOSE OFFERINGS. THIS RESULTED IN RESPONDENT OFFERINGAND SELLING MUNICIPAL SECURITIES ON THE BASIS OF MATERIALLYMISLEADING DISCLOSURE DOCUMENTS.THE VIOLATIONS WERE SELF-REPORTED BY RESPONDENT TO THECOMMISSION PURSUANT TO THE DIVISION OF ENFORCEMENT'S (THE "DIVISION") MUNICIPALITIES CONTINUING DISCLOSURE COOPERATION(MCDC) INITIATIVE.

    Current Status: Final

    242018 FINRA. All rights reserved. Report about PIPER JAFFRAY & CO.

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    Initiated By: UNITED STATES SECURITIES AND EXCHANGE COMMISSION

    Principal Sanction(s)/ReliefSought:

    Cease and Desist

    Other Sanction(s)/ReliefSought:

    Date Initiated: 06/18/2015

    Docket/Case Number: 3-16630

    Principal Product Type: Debt - Municipal

    Other Product Type(s):

    SEC ADMIN RELEASES 33-9837; 34-75231, JUNE 18, 2015: THE SECURITIESAND EXCHANGE COMMISSION DEEMS IT APPROPRIATE AND IN THEPUBLIC INTEREST THAT PUBLIC ADMINISTRATIVE AND CEASE-AND-DESISTPROCEEDINGS BE, AND HEREBY ARE, INSTITUTED AGAINST PIPERJAFFRAY & CO. ("RESPONDENT"). RESPONDENT WILLFULLY VIOLATEDSECTION 17(A)(2) OF THE SECURITIES ACT. THIS MATTER INVOLVESVIOLATIONS OF AN ANTIFRAUD PROVISION OF THE FEDERAL SECURITIESLAWS IN CONNECTION WITH RESPONDENT'S UNDERWRITING OF CERTAINMUNICIPAL SECURITIES OFFERINGS. RESPONDENT, A REGISTEREDBROKER-DEALER, CONDUCTED INADEQUATE DUE DILIGENCE IN CERTAINOFFERINGS AND AS A RESULT, FAILED TO FORM A REASONABLE BASISFOR BELIEVING THE TRUTHFULNESS OF CERTAIN MATERIALREPRESENTATIONS IN OFFICIAL STATEMENTS ISSUED IN CONNECTIONWITH THOSE OFFERINGS. THIS RESULTED IN RESPONDENT OFFERINGAND SELLING MUNICIPAL SECURITIES ON THE BASIS OF MATERIALLYMISLEADING DISCLOSURE DOCUMENTS.THE VIOLATIONS WERE SELF-REPORTED BY RESPONDENT TO THECOMMISSION PURSUANT TO THE DIVISION OF ENFORCEMENT'S (THE "DIVISION") MUNICIPALITIES CONTINUING DISCLOSURE COOPERATION(MCDC) INITIATIVE.

    Resolution Date: 06/18/2015

    Resolution:

    Other Sanctions Ordered: UNDERTAKINGS

    Sanction Details: THE RESPONDENT SHALL CEASE AND DESIST FROM COMMITTING ORCAUSING ANY VIOLATIONS AND ANY FUTURE VIOLATIONS OF SECTION17(A)(2)OF THE SECURITIES ACT, PAY A CIVIL MONEY PENALTY IN THEAMOUNT OF $500,000 AND COMPLY WITH THE UNDERTAKINGSENUMERATED IN THE OFFER OF SETTLEMENT.

    Regulator Statement IN ANTICIPATION OF THE INSTITUTION OF THESE PROCEEDINGS,RESPONDENT HAS SUBMITTED AN OFFER OF SETTLEMENT (THE "OFFER")WHICH THE COMMISSION HAS DETERMINED TO ACCEPT. SOLELY FOR THEPURPOSE OF THESE PROCEEDINGS AND ANY OTHER PROCEEDINGSBROUGHT BY OR ON BEHALF OF THE COMMISSION, OR TO WHICH THECOMMISSION IS A PARTY, AND WITHOUT ADMITTING OR DENYING THEFINDINGS, EXCEPT AS TO THE COMMISSION'S JURISDICTION OVER IT ANDTHE SUBJECT MATTER OF THESE PROCEEDINGS, WHICH ARE ADMITTED,RESPONDENT CONSENTS TO THE ENTRY OF THIS ORDER INSTITUTINGADMINISTRATIVE AND CEASE-AND-DESIST PROCEEDINGS PURSUANT TOSECTION 8A OF THE SECURITIES ACT OF 1933 AND SECTION 15(B) OF THESECURITIES EXCHANGE ACT OF 1934, MAKING FINDINGS, AND IMPOSINGREMEDIAL SANCTIONS AND A CEASE-AND-DESIST ORDER. IN VIEW OF THEFOREGOING, THE COMMISSION DEEMS IT APPROPRIATE AND IN THEPUBLIC INTEREST TO IMPOSE THE SANCTIONS AGREED TO INRESPONDENT'S OFFER. ACCORDINGLY, IT IS HEREBY ORDERED THATRESPONDENT SHALL, CEASE AND DESIST FROM COMMITTING ORCAUSING ANY VIOLATIONS AND ANY FUTURE VIOLATIONS OF 17(A)(2)OFTHE SECURITIES ACT; WITHIN TEN (10) DAYS OF THE ENTRY OF THISORDER, PAY A CIVIL MONEY PENALTY IN THE AMOUNT OF $500,000 TO THESECURITIES AND EXCHANGE COMMISSION; AND RETAIN AN INDEPENDENTCONSULTANT TO CONDUCT A REVIEW OF RESPONDENT'S POLICIES ANDPROCEDURES AS THEY RELATE TO MUNICIPAL SECURITIESUNDERWRITING DUE DILIGENCE.

    Does the order constitute afinal order based onviolations of any laws orregulations that prohibitfraudulent, manipulative, ordeceptive conduct?

    Yes

    Sanctions Ordered: Monetary/Fine $500,000.00Cease and Desist/Injunction

    Order

    252018 FINRA. All rights reserved. Report about PIPER JAFFRAY & CO.

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  • www.finra.org/brokercheck User GuidanceIN ANTICIPATION OF THE INSTITUTION OF THESE PROCEEDINGS,RESPONDENT HAS SUBMITTED AN OFFER OF SETTLEMENT (THE "OFFER")WHICH THE COMMISSION HAS DETERMINED TO ACCEPT. SOLELY FOR THEPURPOSE OF THESE PROCEEDINGS AND ANY OTHER PROCEEDINGSBROUGHT BY OR ON BEHALF OF THE COMMISSION, OR TO WHICH THECOMMISSION IS A PARTY, AND WITHOUT ADMITTING OR DENYING THEFINDINGS, EXCEPT AS TO THE COMMISSION'S JURISDICTION OVER IT ANDTHE SUBJECT MATTER OF THESE PROCEEDINGS, WHICH ARE ADMITTED,RESPONDENT CONSENTS TO THE ENTRY OF THIS ORDER INSTITUTINGADMINISTRATIVE AND CEASE-AND-DESIST PROCEEDINGS PURSUANT TOSECTION 8A OF THE SECURITIES ACT OF 1933 AND SECTION 15(B) OF THESECURITIES EXCHANGE ACT OF 1934, MAKING FINDINGS, AND IMPOSINGREMEDIAL SANCTIONS AND A CEASE-AND-DESIST ORDER. IN VIEW OF THEFOREGOING, THE COMMISSION DEEMS IT APPROPRIATE AND IN THEPUBLIC INTEREST TO IMPOSE THE SANCTIONS AGREED TO INRESPONDENT'S OFFER. ACCORDINGLY, IT IS HEREBY ORDERED THATRESPONDENT SHALL, CEASE AND DESIST FROM COMMITTING ORCAUSING ANY VIOLATIONS AND ANY FUTURE VIOLATIONS OF 17(A)(2)OFTHE SECURITIES ACT; WITHIN TEN (10) DAYS OF THE ENTRY OF THISORDER, PAY A CIVIL MONEY PENALTY IN THE AMOUNT OF $500,000 TO THESECURITIES AND EXCHANGE COMMISSION; AND RETAIN AN INDEPENDENTCONSULTANT TO CONDUCT A REVIEW OF RESPONDENT'S POLICIES ANDPROCEDURES AS THEY RELATE TO MUNICIPAL SECURITIESUNDERWRITING DUE DILIGENCE.

    iReporting Source: Firm

    Initiated By: UNITED STATES SECURITIES AND EXCHANGE COMMISSION

    Date Initiated: 06/18/2015

    Allegations: SEC ADMIN RELEASES 33-9837; 34-75231, JUNE 18, 2015: THE SECURITIESAND EXCHANGE COMMISSION DEEMS IT APPROPRIATE AND IN THEPUBLIC INTEREST THAT PUBLIC ADMINISTRATIVE AND CEASE-AND-DESISTPROCEEDINGS BE, AND HEREBY ARE, INSTITUTED AGAINST PIPERJAFFRAY & CO. ("RESPONDENT"). RESPONDENT WILLFULLY VIOLATEDSECTION 17(A)(2) OF THE SECURITIES ACT. THIS MATTER INVOLVESVIOLATIONS OF AN ANTIFRAUD PROVISION OF THE FEDERAL SECURITIESLAWS IN CONNECTION WITH RESPONDENT'S UNDERWRITING OF CERTAINMUNICIPAL SECURITIES OFFERINGS. RESPONDENT, A REGISTEREDBROKER-DEALER, CONDUCTED INADEQUATE DUE DILIGENCE IN CERTAINOFFERINGS AND AS A RESULT, FAILED TO FORM A REASONABLE BASISFOR BELIEVING THE TRUTHFULNESS OF CERTAIN MATERIALREPRESENTATIONS IN OFFICIAL STATEMENTS ISSUED IN CONNECTIONWITH THOSE OFFERINGS. THIS RESULTED IN RESPONDENT OFFERINGAND SELLING MUNICIPAL SECURITIES ON THE BASIS OF MATERIALLYMISLEADING DISCLOSURE DOCUMENTS. THE VIOLATIONS WERE SELF-REPORTED BY RESPONDENT TO THE COMMISSION PURSUANT TO THEDIVISION OF ENFORCEMENT'S (THE "DIVISION") MUNICIPALITIESCONTINUING DISCLOSURE COOPERATION (MCDC) INITIATIVE.

    Current Status: Final

    262018 FINRA. All rights reserved. Report about PIPER JAFFRAY & CO.

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    Principal Sanction(s)/ReliefSought:

    Cease and Desist

    Other Sanction(s)/ReliefSought:

    Date Initiated: 06/18/2015

    Docket/Case Number: 3-16630

    Principal Product Type: Debt - Municipal

    Other Product Type(s):

    Resolution Date: 06/18/2015

    Resolution:

    Other Sanctions Ordered:

    Sanction Details: THE RESPONDENT SHALL CEASE AND DESIST FROM COMMITTING ORCAUSING ANY VIOLATIONS AND ANY FUTURE VIOLATIONS OF SECTION17(A)(2)OF THE SECURITIES ACT, PAY A CIVIL MONEY PENALTY IN THEAMOUNT OF $500,000 AND COMPLY WITH THE UNDERTAKINGSENUMERATED IN THE OFFER OF SETTLEMENT.

    Firm Statement IN ANTICIPATION OF THE INSTITUTION OF THESE PROCEEDINGS,RESPONDENT HAS SUBMITTED AN OFFER OF SETTLEMENT (THE "OFFER")WHICH THE COMMISSION HAS DETERMINED TO ACCEPT. SOLELY FOR THEPURPOSE OF THESE PROCEEDINGS AND ANY OTHER PROCEEDINGSBROUGHT BY OR ON BEHALF OF THE COMMISSION, OR TO WHICH THECOMMISSION IS A PARTY, AND WITHOUT ADMITTING OR DENYING THEFINDINGS, EXCEPT AS TO THE COMMISSION'S JURISDICTION OVER IT ANDTHE SUBJECT MATTER OF THESE PROCEEDINGS, WHICH ARE ADMITTED,RESPONDENT CONSENTS TO THE ENTRY OF THIS ORDER INSTITUTINGADMINISTRATIVE AND CEASE-AND-DESIST PROCEEDINGS PURSUANT TOSECTION 8A OF THE SECURITIES ACT OF 1933 AND SECTION 15(B) OF THESECURITIES EXCHANGE ACT OF 1934, MAKING FINDINGS, AND IMPOSINGREMEDIAL SANCTIONS AND A CEASE-AND-DESIST ORDER. IN VIEW OF THEFOREGOING, THE COMMISSION DEEMS IT APPROPRIATE AND IN THEPUBLIC INTEREST TO IMPOSE THE SANCTIONS AGREED TO INRESPONDENT'S OFFER. ACCORDINGLY, IT IS HEREBY ORDERED THATRESPONDENT SHALL, CEASE AND DESIST FROM COMMITTING ORCAUSING ANY VIOLATIONS AND ANY FUTURE VIOLATIONS OF 17(A)(2)OFTHE SECURITIES ACT; WITHIN TEN (10) DAYS OF THE ENTRY OF THISORDER, PAY A CIVIL MONEY PENALTY IN THE AMOUNT OF $500,000 TO THESECURITIES AND EXCHANGE COMMISSION; AND RETAIN AN INDEPENDENTCONSULTANT TO CONDUCT A REVIEW OF RESPONDENT'S POLICIES ANDPROCEDURES AS THEY RELATE TO MUNICIPAL SECURITIESUNDERWRITING DUE DILIGENCE.

    Sanctions Ordered: Monetary/Fine $500,000.00Cease and Desist/Injunction

    Order

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    IN ANTICIPATION OF THE INSTITUTION OF THESE PROCEEDINGS,RESPONDENT HAS SUBMITTED AN OFFER OF SETTLEMENT (THE "OFFER")WHICH THE COMMISSION HAS DETERMINED TO ACCEPT. SOLELY FOR THEPURPOSE OF THESE PROCEEDINGS AND ANY OTHER PROCEEDINGSBROUGHT BY OR ON BEHALF OF THE COMMISSION, OR TO WHICH THECOMMISSION IS A PARTY, AND WITHOUT ADMITTING OR DENYING THEFINDINGS, EXCEPT AS TO THE COMMISSION'S JURISDICTION OVER IT ANDTHE SUBJECT MATTER OF THESE PROCEEDINGS, WHICH ARE ADMITTED,RESPONDENT CONSENTS TO THE ENTRY OF THIS ORDER INSTITUTINGADMINISTRATIVE AND CEASE-AND-DESIST PROCEEDINGS PURSUANT TOSECTION 8A OF THE SECURITIES ACT OF 1933 AND SECTION 15(B) OF THESECURITIES EXCHANGE ACT OF 1934, MAKING FINDINGS, AND IMPOSINGREMEDIAL SANCTIONS AND A CEASE-AND-DESIST ORDER. IN VIEW OF THEFOREGOING, THE COMMISSION DEEMS IT APPROPRIATE AND IN THEPUBLIC INTEREST TO IMPOSE THE SANCTIONS AGREED TO INRESPONDENT'S OFFER. ACCORDINGLY, IT IS HEREBY ORDERED THATRESPONDENT SHALL, CEASE AND DESIST FROM COMMITTING ORCAUSING ANY VIOLATIONS AND ANY FUTURE VIOLATIONS OF 17(A)(2)OFTHE SECURITIES ACT; WITHIN TEN (10) DAYS OF THE ENTRY OF THISORDER, PAY A CIVIL MONEY PENALTY IN THE AMOUNT OF $500,000 TO THESECURITIES AND EXCHANGE COMMISSION; AND RETAIN AN INDEPENDENTCONSULTANT TO CONDUCT A REVIEW OF RESPONDENT'S POLICIES ANDPROCEDURES AS THEY RELATE TO MUNICIPAL SECURITIESUNDERWRITING DUE DILIGENCE.

    Disclosure 3 of 134

    i

    Reporting Source: Regulator

    Initiated By: FINRA

    Principal Sanction(s)/ReliefSought:

    Other Sanction(s)/ReliefSought:

    Date Initiated: 02/02/2015

    Docket/Case Number: 2013038311001

    Principal Product Type: Debt - Municipal

    Other Product Type(s):

    Allegations: WITHOUT ADMITTING OR DENYING THE FINDINGS, THE FIRM CONSENTEDTO THE SANCTIONS AND TO THE ENTRY OF FINDINGS THAT ITINACCURATELY REPORTED THE M020 SPECIAL CONDITION INDICATOR TOTHE REAL-TIME TRANSACTION REPORTING SYSTEM (RTRS) IN REPORTSOF TRANSACTIONS IN MUNICIPAL SECURITIES. THE FINDINGS STATEDTHAT THE FIRM'S SUPERVISORY SYSTEM DID NOT PROVIDE FORSUPERVISION REASONABLY DESIGNED TO ACHIEVE COMPLIANCE WITHRESPECT TO THE APPLICABLE SECURITIES LAWS AND REGULATIONS ANDTHE RULES OF THE MUNICIPAL SECURITIES RULEMAKING BOARD (MSRB)CONCERNING THE ACCURATE REPORTING OF SPECIAL CONDITIONINDICATOR CODES.

    Current Status: Final

    Resolution Date: 02/02/2015

    Resolution:

    Does the order constitute afinal order based onviolations of any laws orregulations that prohibitfraudulent, manipulative, ordeceptive conduct?

    No

    Sanctions Ordered: CensureMonetary/Fine $15,000.00

    Acceptance, Waiver & Consent(AWC)

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    Other Sanctions Ordered:

    Sanction Details: THE FIRM WAS CENSURED AND FINED $15,000.

    FINE PAID IN FULL ON FEBRUARY 25, 2015.

    iReporting Source: Firm

    Initiated By: FINRA

    Principal Sanction(s)/ReliefSought:

    Other

    Other Sanction(s)/ReliefSought:

    MONETARY FINE

    Date Initiated: 02/02/2015

    Docket/Case Number: 2013038311001

    Principal Product Type: Debt - Municipal

    Other Product Type(s):

    Allegations: WITHOUT ADMITTING OR DENYING THE FINDINGS, THE FIRM CONSENTEDTO THE SANCTIONS AND TO THE ENTRY OF FINDINGS THAT ITINACCURATELY REPORTED THE M020 SPECIAL CONDITION INDICATOR TOTHE REAL-TIME TRANSACTION REPORTING SYSTEM (RTRS) IN REPORTSOF TRANSACTIONS IN MUNICIPAL SECURITIES. THE FINDINGS STATEDTHAT THE FIRM'S SUPERVISORY SYSTEM DID NOT PROVIDE FORSUPERVISION REASONABLY DESIGNED TO ACHIEVE COMPLIANCE WITHRESPECT TO THE APPLICABLE SECURITIES LAWS AND REGULATIONS ANDTHE RULES OF THE MUNICIPAL SECURITIES RULEMAKING BOARD (MSRB)CONCERNING THE ACCURATE REPORTING OF SPECIAL CONDITIONINDICATOR CODES.

    Current Status: Final

    Resolution Date: 02/02/2015

    Resolution:

    Other Sanctions Ordered:

    Sanction Details: THE FIRM WAS CENSURED AND FINED $15,000.

    Sanctions Ordered: CensureMonetary/Fine $15,000.00

    Acceptance, Waiver & Consent(AWC)

    Disclosure 4 of 134

    i

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    Disclosure 4 of 134

    Reporting Source: Regulator

    Initiated By: FINRA

    Principal Sanction(s)/ReliefSought:

    Other Sanction(s)/ReliefSought:

    Date Initiated: 05/01/2014

    Docket/Case Number: 2013038861401

    Principal Product Type: Other

    Other Product Type(s): SECURITIZED PRODUCTS

    Allegations: WITHOUT ADMITTING OR DENYING THE FINDINGS, THE FIRM CONSENTEDTO THE SANCTIONS AND TO THE ENTRY OF FINDINGS THAT IT FAILED TOREPORT TO THE TRADE REPORTING AND COMPLIANCE ENGINE (TRACE)TRANSACTIONS IN TRACE-ELIGIBLE SECURITIZED PRODUCTS WITHIN THETIME REQUIRED BY FINRA RULE 6730(A).

    Current Status: Final

    Resolution Date: 05/01/2014

    Resolution:

    Other Sanctions Ordered:

    Sanction Details: SEE ABOVE

    Regulator Statement FINE PAID IN FULL MAY 16, 2014.

    Does the order constitute afinal order based onviolations of any laws orregulations that prohibitfraudulent, manipulative, ordeceptive conduct?

    No

    Sanctions Ordered: Monetary/Fine $5,000.00

    Acceptance, Waiver & Consent(AWC)

    iReporting Source: Firm

    Allegations: WITHOUT ADMITTING OR DENYING THE FINDINGS, THE FIRM CONSENTEDTO THE SANCTIONS AND TO THE ENTRY OF FINDINGS THAT IT FAILED TOREPORT TO THE TRADE REPORTING AND COMPLIANCE ENGINE (TRACE)TRANSACTIONS IN TRACE-ELIGIBLE SECURITIZED PRODUCTS WITHIN THETIME REQUIRED BY FINRA RULE 6730(A).

    Current Status: Final

    302018 FINRA. All rights reserved. Report about PIPER JAFFRAY & CO.

    http://www.finra.org/brokercheckhttp://www.finra.org/brokercheck_reportshttp://www.finra.orghttps://www.finra.org/industry/disciplinary-actions/finra-disciplinary-actions-online?search=2013038861401

  • www.finra.org/brokercheck User Guidance

    Initiated By: FINRA

    Principal Sanction(s)/ReliefSought:

    Other

    Other Sanction(s)/ReliefSought:

    MONETARY FINE

    Date Initiated: 05/01/2014

    Docket/Case Number: 2013038861401

    Principal Product Type: Other

    Other Product Type(s): SECURITIZED PRODUCTS

    WITHOUT ADMITTING OR DENYING THE FINDINGS, THE FIRM CONSENTEDTO THE SANCTIONS AND TO THE ENTRY OF FINDINGS THAT IT FAILED TOREPORT TO THE TRADE REPORTING AND COMPLIANCE ENGINE (TRACE)TRANSACTIONS IN TRACE-ELIGIBLE SECURITIZED PRODUCTS WITHIN THETIME REQUIRED BY FINRA RULE 6730(A).

    Resolution Date: 05/01/2014

    Resolution:

    Other Sanctions Ordered:

    Sanction Details: TOTAL AMOUNT: $5,000.00; 100% LEVIED AGAINST THE APPLICANT.

    Sanctions Ordered: Monetary/Fine $5,000.00

    Acceptance, Waiver & Consent(AWC)

    Disclosure 5 of 134

    i

    Reporting Source: Regulator

    Initiated By: FINRA

    Date Initiated: 03/04/2014

    Docket/Case Number: 2013037791201

    Allegations: WITHOUT ADMITTING OR DENYING THE FINDINGS, THE FIRM CONSENTEDTO THE SANCTIONS AND TO THE ENTRY OF FINDINGS THAT IT FAILED TOREPORT TO THE TRADE REPORTING AND COMPLIANCE ENGINE (TRACE)THE CORRECT TIME OF TRADE EXECUTION FOR S1 TRANSACTIONS INTRACE-ELIGIBLE AGENCY DEBT SECURITIES; FAILED TO REPORT TOTRACE S1 TRANSACTIONS IN TRACE-ELIGIBLE SECURITIES WITHIN 15MINUTES OF THE TIME OF EXECUTION; FAILED TO SHOW THE CORRECTTIME OF EXECUTION ON THE MEMORANDUM OF BROKERAGE ORDERS;AND FAILED TO REPORT TO TRACE THE CORRECT TIME OF TRADEEXECUTION FOR TRANSACTIONS IN TRACE-ELIGIBLE SECURITIZEDPRODUCTS.

    Current Status: Final

    312018 FINRA. All rights reserved. Report about PIPER JAFFRAY & CO.

    http://www.finra.org/brokercheckhttp://www.finra.org/brokercheck_reportshttp://www.finra.orghttps://www.finra.org/industry/disciplinary-actions/finra-disciplinary-actions-online?search=2013038861401https://www.finra.org/industry/disciplinary-actions/finra-disciplinary-actions-online?search=2013037791201

  • www.finra.org/brokercheck User Guidance

    Principal Sanction(s)/ReliefSought:

    Other Sanction(s)/ReliefSought:

    Docket/Case Number: 2013037791201

    Principal Product Type: Other

    Other Product Type(s): AGENCY DEBT SECURITIES

    Resolution Date: 03/04/2014

    Resolution:

    Other Sanctions Ordered:

    Sanction Details: SEE ABOVE

    Does the order constitute afinal order based onviolations of any laws orregulations that prohibitfraudulent, manipulative, ordeceptive conduct?

    No

    Sanctions Ordered: CensureMonetary/Fine $17,500.00

    Acceptance, Waiver & Consent(AWC)

    iReporting Source: Firm

    Initiated By: FINRA

    Date Initiated: 03/04/2014

    Docket/Case Number: 2013037791201

    Allegations: WITHOUT ADMITTING OR DENYING THE FINDINGS, THE FIRM CONSENTEDTO THE SANCTIONS AND TO THE ENTRY OF FINDINGS THAT IT FAILED TOREPORT TO THE TRADE REPORTING AND COMPLIANCE ENGINE (TRACE)THE CORRECT TIME OF TRADE EXECUTION FOR S1 TRANSACTIONS INTRACE-ELIGIBLE AGENCY DEBT SECURITIES; FAILED TO REPORT TOTRACE S1 TRANSACTIONS IN TRACE-ELIGIBLE SECURITIES WITHIN 15MINUTES OF THE TIME OF EXECUTION; FAILED TO SHOW THE CORRECTTIME OF EXECUTION ON THE MEMORANDUM OF BROKERAGE ORDERS;AND FAILED TO REPORT TO TRACE THE CORRECT TIME OF TRADEEXECUTION FOR TRANSACTIONS IN TRACE-ELIGIBLE SECURITIZEDPRODUCTS.

    Current Status: Final

    322018 FINRA. All rights reserved. Report about PIPER JAFFRAY & CO.

    http://www.finra.org/brokercheckhttp://www.finra.org/brokercheck_reportshttp://www.finra.orghttps://www.finra.org/industry/disciplinary-actions/finra-disciplinary-actions-online?search=2013037791201https://www.finra.org/industry/disciplinary-actions/finra-disciplinary-actions-online?search=2013037791201

  • www.finra.org/brokercheck User Guidance

    Principal Sanction(s)/ReliefSought:

    Censure

    Other Sanction(s)/ReliefSought:

    FINE

    Docket/Case Number: 2013037791201

    Principal Product Type: Other

    Other Product Type(s): AGENCY DEBT SECURITIES

    Resolution Date: 03/04/2014

    Resolution:

    Other Sanctions Ordered:

    Sanction Details: FINE $17,500.00

    Sanctions Ordered: CensureMonetary/Fine $17,500.00

    Acceptance, Waiver & Consent(AWC)

    Disclosure 6 of 134

    i

    Reporting Source: Regulator

    Allegations: SEC ADMIN RELEASES 33-9472, 34-70804, NOVEMBER 5, 2013: THESECURITIES AND EXCHANGE COMMISSION ("COMMISSION") DEEMED ITAPPROPRIATE AND IN THE PUBLIC INTEREST THAT PUBLICADMINISTRATIVE AND CEASE-AND-DESIST PROCEEDINGS BE INSTITUTEDPURSUANT TO SECTION 8A OF THE SECURITIES ACT OF 1933("SECURITIES ACT") AND SECTIONS 15(B) AND 15(B)(C)(2) OF THESECURITIES EXCHANGE ACT OF 1934 ("EXCHANGE ACT") AGAINST PIPERJAFFRAY & CO. ("PIPER").

    THE COMMISSION FOUND THAT IN 2011, A MUNICIPAL CORPORATION("DISTRICT") DEFAULTED ON $41.77 MILLION IN BOND ANTICIPATIONNOTES ("BANS") IT HAD ISSUED IN NOVEMBER 2008 TO FINANCE A MULTI-USE ARENA AND ICE HOCKEY RINK (THE "REGIONAL CENTER") LOCATEDIN THE CITY OF WENATCHEE, WASHINGTON (THE "CITY"). PIPER SERVEDAS SOLE UNDERWRITER FOR THE BANS. THE OFFICIAL STATEMENT FORTHE BANS WAS MATERIALLY FALSE AND MISLEADING.

    PIPER WAS HIRED BY THE DISTRICT AS UNDERWRITER AS A LAST MINUTEREPLACEMENT FOR A PREDECESSOR UNDERWRITING FIRM("PREDECESSOR"). THE PREDECESSOR HAD BEEN WORKING WITH THEDISTRICT FOR OVER A YEAR AND HAD COMPLETED A PRELIMINARYOFFICIAL STATEMENT FOR LONG-TERM BONDS WHICH HAD RECEIVED ANINVESTMENT GRADE RATING. THAT PREDECESSOR WITHDREW INSEPTEMBER 2008 AFTER THE GLOBAL FINANCIAL CRISIS PREVENTEDACCESS TO THE BOND MARKET AND THE FIRM WAS UNABLE TOCOMPLETE THE FINANCING. PIPER'S ENGAGEMENT WITH THE DISTRICTSTARTED ON OCTOBER 27, 2008. BY THE TIME PIPER BECAME THEUNDERWRITER ON THE DEAL, THE CITY AND THE DISTRICT WEREDESPERATE TO FIND FINANCING FOR THE REGIONAL CENTER WITHIN AMONTH BECAUSE OF ONEROUS LEASE PAYMENTS BEING DEMANDED BYTHE CONSTRUCTION LENDER. PIPER SUGGESTED SEVERAL FINANCINGOPTIONS, ALTHOUGH ONLY ONE, SHORT-TERM BANS, WAS CONSIDEREDVIABLE. THE DISTRICT DETERMINED TO ISSUE THREE YEAR BANS THATWOULD MATURE IN 2011, WITH THE PRINCIPAL OF THE BANS TO BEREPAID SOLELY THROUGH THE ISSUANCE OF LONG-TERM BONDS.

    PIPER CONDUCTED INADEQUATE DUE DILIGENCE AND, AS A RESULT,FAILED TO FORM A REASONABLE BASIS FOR BELIEVING THETRUTHFULNESS AND COMPLETENESS OF MATERIAL STATEMENTS IN THEOFFICIAL STATEMENT. THE OFFICIAL STATEMENT FOR THE BANS WAS ALIGHTLY REVISED VERSION OF THE PRELIMINARY OFFICIAL STATEMENTPREPARED BY THE PREDECESSOR AND THE DISTRICT'S BOND COUNSELTHAT INCLUDED SIMILAR DISCLOSURES AND RELIED ON THE SAMEPROJECTIONS FOR THE REGIONAL CENTER PROVIDED BY THE COMPANY("COMPANY") HIRED TO DEVELOP AND MANAGE THE REGIONAL CENTER.PIPER CONDUCTED A CURSORY INQUIRY INTO THE PROJECTIONSPROVIDED BY THE COMPANY, DID NOT INQUIRE ABOUT PRIORPROJECTIONS OR REVISIONS, AND DID NOT ASK TO SEE ANINDEPENDENT CONSULTANT'S REVIEW OF THE PROJECTIONS DESPITEBEING MADE AWARE OF ITS EXISTENCE, DEPRIVING BAN PURCHASERSOF MATERIAL INFORMATION RELATING TO THE REVENUE PROJECTIONS,THE FIRST SOURCE OF PAYMENT FOR THE MAJORITY OF THE BANS.

    AN INDEPENDENT CONSULTANT HAD BEEN ASKED TO REVIEW THECOMPANY'S EARLIER PROJECTIONS AND HAD RAISED QUESTIONS ABOUTTHE REGIONAL CENTER'S ECONOMIC VIABILITY. DESPITE TWO SEPARATEREVIEWS OF PRIOR COMPANY PROJECTIONS BY THE INDEPENDENTCONSULTANT, THE OFFICIAL STATEMENT PRESENTED THE MOST RECENTVERSION OF THE COMPANY'S PROJECTIONS ALONG WITH A FALSE ANDMISLEADING STATEMENT TO THE EFFECT THAT NO FINANCIAL ADVISOR,ACCOUNTING OR OTHER FIRM HAD EXAMINED THOSE PROJECTIONS TOVERIFY THE REASONABLENESS OF THE COMPANY'S ASSUMPTIONS ORITS CONCLUSIONS.

    PIPER WAS UNAWARE THAT THE PROJECTIONS IN THE OFFICIALSTATEMENT HAD BEEN REVISED UPWARD FROM PROJECTIONSGENERATED A FEW MONTHS EARLIER AFTER A CLAIM BY THE CITY'SFORMER MAYOR AND THE DISTRICT'S CONTRACT MANAGER THAT THECOMPANY'S PROJECTIONS WERE INCONSISTENT WITH ITS PRIORPROJECTIONS AND NOT SUFFICIENTLY OPTIMISTIC. DURING ACONFERENCE CALL WITH THE COMPANY'S PRESIDENT AND THECOMPANY'S FINANCIAL CONSULTANT, THE CITY'S FORMER MAYOR MADEAN IMPASSIONED ARGUMENT THAT THEY KNEW THE LOCAL CITIZENSBETTER THAN THE COMPANY, (CONTINUED IN COMMENT)

    Current Status: Final

    332018 FINRA. All rights reserved. Report about PIPER JAFFRAY & CO.

    http://www.finra.org/brokercheckhttp://www.finra.org/brokercheck_reportshttp://www.finra.orghttps://www.finra.org/industry/disciplinary-actions/finra-disciplinary-actions-online?search=2013037791201

  • www.finra.org/brokercheck User Guidance

    SEC ADMIN RELEASES 33-9472, 34-70804, NOVEMBER 5, 2013: THESECURITIES AND EXCHANGE COMMISSION ("COMMISSION") DEEMED ITAPPROPRIATE AND IN THE PUBLIC INTEREST THAT PUBLICADMINISTRATIVE AND CEASE-AND-DESIST PROCEEDINGS BE INSTITUTEDPURSUANT TO SECTION 8A OF THE SECURITIES ACT OF 1933("SECURITIES ACT") AND SECTIONS 15(B) AND 15(B)(C)(2) OF THESECURITIES EXCHANGE ACT OF 1934 ("EXCHANGE ACT") AGAINST PIPERJAFFRAY & CO. ("PIPER").

    THE COMMISSION FOUND THAT IN 2011, A MUNICIPAL CORPORATION("DISTRICT") DEFAULTED ON $41.77 MILLION IN BOND ANTICIPATIONNOTES ("BANS") IT HAD ISSUED IN NOVEMBER 2008 TO FINANCE A MULTI-USE ARENA AND ICE HOCKEY RINK (THE "REGIONAL CENTER") LOCATEDIN THE CITY OF WENATCHEE, WASHINGTON (THE "CITY"). PIPER SERVEDAS SOLE UNDERWRITER FOR THE BANS. THE OFFICIAL STATEMENT FORTHE BANS WAS MATERIALLY FALSE AND MISLEADING.

    PIPER WAS HIRED BY THE DISTRICT AS UNDERWRITER AS A LAST MINUTEREPLACEMENT FOR A PREDECESSOR UNDERWRITING FIRM("PREDECESSOR"). THE PREDECESSOR HAD BEEN WORKING WITH THEDISTRICT FOR OVER A YEAR AND HAD COMPLETED A PRELIMINARYOFFICIAL STATEMENT FOR LONG-TERM BONDS WHICH HAD RECEIVED ANINVESTMENT GRADE RATING. THAT PREDECESSOR WITHDREW INSEPTEMBER 2008 AFTER THE GLOBAL FINANCIAL CRISIS PREVENTEDACCESS TO THE BOND MARKET AND THE FIRM WAS UNABLE TOCOMPLETE THE FINANCING. PIPER'S ENGAGEMENT WITH THE DISTRICTSTARTED ON OCTOBER 27, 2008. BY THE TIME PIPER BECAME THEUNDERWRITER ON THE DEAL, THE CITY AND THE DISTRICT WEREDESPERATE TO FIND FINANCING FOR THE REGIONAL CENTER WITHIN AMONTH BECAUSE OF ONEROUS LEASE PAYMENTS BEING DEMANDED BYTHE CONSTRUCTION LENDER. PIPER SUGGESTED SEVERAL FINANCINGOPTIONS, ALTHOUGH ONLY ONE, SHORT-TERM BANS, WAS CONSIDEREDVIABLE. THE DISTRICT DETERMINED TO ISSUE THREE YEAR BANS THATWOULD MATURE IN 2011, WITH THE PRINCIPAL OF THE BANS TO BEREPAID SOLELY THROUGH THE ISSUANCE OF LONG-TERM BONDS.

    PIPER CONDUCTED INADEQUATE DUE DILIGENCE AND, AS A RESULT,FAILED TO FORM A REASONABLE BASIS FOR BELIEVING THETRUTHFULNESS AND COMPLETENESS OF MATERIAL STATEMENTS IN THEOFFICIAL STATEMENT. THE OFFICIAL STATEMENT FOR THE BANS WAS ALIGHTLY REVISED VERSION OF THE PRELIMINARY OFFICIAL STATEMENTPREPARED BY THE PREDECESSOR AND THE DISTRICT'S BOND COUNSELTHAT INCLUDED SIMILAR DISCLOSURES AND RELIED ON THE SAMEPROJECTIONS FOR THE REGIONAL CENTER PROVIDED BY THE COMPANY("COMPANY") HIRED TO DEVELOP AND MANAGE THE REGIONAL CENTER.PIPER CONDUCTED A CURSORY INQUIRY INTO THE PROJECTIONSPROVIDED BY THE COMPANY, DID NOT INQUIRE ABOUT PRIORPROJECTIONS OR REVISIONS, AND DID NOT ASK TO SEE ANINDEPENDENT CONSULTANT'S REVIEW OF THE PROJECTIONS DESPITEBEING MADE AWARE OF ITS EXISTENCE, DEPRIVING BAN PURCHASERSOF MATERIAL INFORMATION RELATING TO THE REVENUE PROJECTIONS,THE FIRST SOURCE OF PAYMENT FOR THE MAJORITY OF THE BANS.

    AN INDEPENDENT CONSULTANT HAD BEEN ASKED TO REVIEW THECOMPANY'S EARLIER PROJECTIONS AND HAD RAISED QUESTIONS ABOUTTHE REGIONAL CENTER'S ECONOMIC VIABILITY. DESPITE TWO SEPARATEREVIEWS OF PRIOR COMPANY PROJECTIONS BY THE INDEPENDENTCONSULTANT, THE OFFICIAL STATEMENT PRESENTED THE MOST RECENTVERSION OF THE COMPANY'S PROJECTIONS ALONG WITH A FALSE ANDMISLEADING STATEMENT TO THE EFFECT THAT NO FINANCIAL ADVISOR,ACCOUNTING OR OTHER FIRM HAD EXAMINED THOSE PROJECTIONS TOVERIFY THE REASONABLENESS OF THE COMPANY'S ASSUMPTIONS ORITS CONCLUSIONS.

    PIPER WAS UNAWARE THAT THE PROJECTIONS IN THE OFFICIALSTATEMENT HAD BEEN REVISED UPWARD FROM PROJECTIONSGENERATED A FEW MONTHS EARLIER AFTER A CLAIM BY THE CITY'SFORMER MAYOR AND THE DISTRICT'S CONTRACT MANAGER THAT THECOMPANY'S PROJECTIONS WERE INCONSISTENT WITH ITS PRIORPROJECTIONS AND NOT SUFFICIENTLY OPTIMISTIC. DURING ACONFERENCE CALL WITH THE COMPANY'S PRESIDENT AND THECOMPANY'S FINANCIAL CONSULTANT, THE CITY'S FORMER MAYOR MADEAN IMPASSIONED ARGUMENT THAT THEY KNEW THE LOCAL CITIZENSBETTER THAN THE COMPANY, (CONTINUED IN COMMENT)

    342018 FINRA. All rights reserved. Report about PIPER JAFFRAY & CO.

    http://www.finra.org/brokercheckhttp://www.finra.org/brokercheck_reportshttp://www.finra.org

  • www.finra.org/brokercheck User Guidance

    Initiated By: UNITED STATES SECURITIES AND EXCHANGE COMMISSION

    Principal Sanction(s)/ReliefSought:

    Other Sanction(s)/ReliefSought:

    Date Initiated: 11/05/2013

    Docket/Case Number: 3-15603

    Principal Product Type: Debt - Municipal

    Other Product Type(s): BOND ANTICIPATION NOTES

    SEC ADMIN RELEASES 33-9472, 34-70804, NOVEMBER 5, 2013: THESECURITIES AND EXCHANGE COMMISSION ("COMMISSION") DEEMED ITAPPROPRIATE AND IN THE PUBLIC INTEREST THAT PUBLICADMINISTRATIVE AND CEASE-AND-DESIST PROCEEDINGS BE INSTITUTEDPURSUANT TO SECTION 8A OF THE SECURITIES ACT OF 1933("SECURITIES ACT") AND SECTIONS 15(B) AND 15(B)(C)(2) OF THESECURITIES EXCHANGE ACT OF 1934 ("EXCHANGE ACT") AGAINST PIPERJAFFRAY & CO. ("PIPER").

    THE COMMISSION FOUND THAT IN 2011, A MUNICIPAL CORPORATION("DISTRICT") DEFAULTED ON $41.77 MILLION IN BOND ANTICIPATIONNOTES ("BANS") IT HAD ISSUED IN NOVEMBER 2008 TO FINANCE A MULTI-USE ARENA AND ICE HOCKEY RINK (THE "REGIONAL CENTER") LOCATEDIN THE CITY OF WENATCHEE, WASHINGTON (THE "CITY"). PIPER SERVEDAS SOLE UNDERWRITER FOR THE BANS. THE OFFICIAL STATEMENT FORTHE BANS WAS MATERIALLY FALSE AND MISLEADING.

    PIPER WAS HIRED BY THE DISTRICT AS UNDERWRITER AS A LAST MINUTEREPLACEMENT FOR A PREDECESSOR UNDERWRITING FIRM("PREDECESSOR"). THE PREDECESSOR HAD BEEN WORKING WITH THEDISTRICT FOR OVER A YEAR AND HAD COMPLETED A PRELIMINARYOFFICIAL STATEMENT FOR LONG-TERM BONDS WHICH HAD RECEIVED ANINVESTMENT GRADE RATING. THAT PREDECESSOR WITHDREW INSEPTEMBER 2008 AFTER THE GLOBAL FINANCIAL CRISIS PREVENTEDACCESS TO THE BOND MARKET AND THE FIRM WAS UNABLE TOCOMPLETE THE FINANCING. PIPER'S ENGAGEMENT WITH THE DISTRICTSTARTED ON OCTOBER 27, 2008. BY THE TIME PIPER BECAME THEUNDERWRITER ON THE DEAL, THE CITY AND THE DISTRICT WEREDESPERATE TO FIND FINANCING FOR THE REGIONAL CENTER WITHIN AMONTH BECAUSE OF ONEROUS LEASE PAYMENTS BEING DEMANDED BYTHE CONSTRUCTION LENDER. PIPER SUGGESTED SEVERAL FINANCINGOPTIONS, ALTHOUGH ONLY ONE, SHORT-TERM BANS, WAS CONSIDEREDVIABLE. THE DISTRICT DETERMINED TO ISSUE THREE YEAR BANS THATWOULD MATURE IN 2011, WITH THE PRINCIPAL OF THE BANS TO BEREPAID SOLELY THROUGH THE ISSUANCE OF LONG-TERM BONDS.

    PIPER CONDUCTED INADEQUATE DUE DILIGENCE AND, AS A RESULT,FAILED TO FORM A REASONABLE BASIS FOR BELIEVING THETRUTHFULNESS AND COMPLETENESS OF MATERIAL STATEMENTS IN THEOFFICIAL STATEMENT. THE OFFICIAL STATEMENT FOR THE BANS WAS ALIGHTLY REVISED VERSION OF THE PRELIMINARY OFFICIAL STATEMENTPREPARED BY THE PREDECESSOR AND THE DISTRICT'S BOND COUNSELTHAT INCLUDED SIMILAR DISCLOSURES AND RELIED ON THE SAMEPROJECTIONS FOR THE REGIONAL CENTER PROVIDED BY THE COMPANY("COMPANY") HIRED TO DEVELOP AND MANAGE THE REGIONAL CENTER.PIPER CONDUCTED A CURSORY INQUIRY INTO THE PROJECTIONSPROVIDED BY THE COMPANY, DID NOT INQUIRE ABOUT PRIORPROJECTIONS OR REVISIONS, AND DID NOT ASK TO SEE ANINDEPENDENT CONSULTANT'S REVIEW OF THE PROJECTIONS DESPITEBEING MADE AWARE OF ITS EXISTENCE, DEPRIVING BAN PURCHASERSOF MATERIAL INFORMATION RELATING TO THE REVENUE PROJECTIONS,THE FIRST SOURCE OF PAYMENT FOR THE MAJORITY OF THE BANS.

    AN INDEPENDENT CONSULTANT HAD BEEN ASKED TO REVIEW THECOMPANY'S EARLIER PROJECTIONS AND HAD RAISED QUESTIONS ABOUTTHE REGIONAL CENTER'S ECONOMIC VIABILITY. DESPITE TWO SEPARATEREVIEWS OF PRIOR COMPANY PROJECTIONS BY THE INDEPENDENTCONSULTANT, THE OFFICIAL STATEMENT PRESENTED THE MOST RECENTVERSION OF THE COMPANY'S PROJECTIONS ALONG WITH A FALSE ANDMISLEADING STATEMENT TO THE EFFECT THAT NO FINANCIAL ADVISOR,ACCOUNTING OR OTHER FIRM HAD EXAMINED THOSE PROJECTIONS TOVERIFY THE REASONABLENESS OF THE COMPANY'S ASSUMPTIONS ORITS CONCLUSIONS.

    PIPER WAS UNAWARE THAT THE PROJECTIONS IN THE OFFICIALSTATEMENT HAD BEEN REVISED UPWARD FROM PROJECTIONSGENERATED A FEW MONTHS EARLIER AFTER A CLAIM BY THE CITY'SFORMER MAYOR AND THE DISTRICT'S CONTRACT MANAGER THAT THECOMPANY'S PROJECTIONS WERE INCONSISTENT WITH ITS PRIORPROJECTIONS AND NOT SUFFICIENTLY OPTIMISTIC. DURING ACONFERENCE CALL WITH THE COMPANY'S PRESIDENT AND THECOMPANY'S FINANCIAL CONSULTANT, THE CITY'S FORMER MAYOR MADEAN IMPASSIONED ARGUMENT THAT THEY KNEW THE LOCAL CITIZENSBETTER THAN THE COMPANY, (CONTINUED IN COMMENT)

    Resolution Date: 11/05/2013

    Resolution:

    Other Sanctions Ordered: UNDERTAKINGS

    Sanction Details: THE COMMISSION DEEMED IT APPROPRIATE, IN THE PUBLIC INTEREST,AND FOR THE PROTECTION OF INVESTORS TO IMPOSE THE SANCTIONSAGREED TO IN PIPER'S OFFER. ACCORDINGLY, PURSUANT SECTION 8A OFTHE SECURITIES ACT AND SECTIONS 15(B) AND 15(B)(C) OF THEEXCHANGE ACT, IT IS HEREBY ORDERED THAT PIPER SHALL CEASE ANDDESIST FROM COMMITTING OR CAUSING ANY VIOLATIONS AND ANYFUTURE VIOLATIONS OF SECTIONS 17(A)(2) AND (3) OF THE SECURITIESACT. PIPER IS CENSURED. PIPER SHALL PAY A CIVIL MONEY PENALTY INTHE AMOUNT OF $300,000. PIPER SHALL COMPLY WITH THEUNDERTAKINGS ENUMERATED IN THE ORDER.

    Regulator Statement (CONTINUED FROM #7) AND THOSE CITIZENS WOULD ULTIMATELYSUPPORT THE REGIONAL CENTER EVEN THOUGH THE COMPANY WASEXPERIENCING WEAK TICKET SALES AND OTHER TROUBLING INDICATORSREGARDING ANTICIPATED REVENUE. THE COMPANY REVISED ITSPROJECTIONS UPWARD AND THE MORE OPTIMISTIC REVISEDPROJECTIONS WERE INCLUDED IN THE OFFICIAL STATEMENT, WITHOUTDISCLOSING THAT THE CITY'S FORMER MAYOR OR THE DISTRICT'SCONTRACT MANAGER HAD QUESTIONED THE ASSUMPTIONS UNDERLYINGTHE PRIOR SET OF PROJECTIONS, OR THAT THE COMPANY HAD RELIEDON THE FORMER MAYOR'S VERBAL ASSERTIONS OF FUTURE COMMUNITYSUPPORT.

    PIPER STATED THAT THEY FOCUSED THEIR DUE DILIGENCE EFFORTS ONA CONTINGENT LOAN AGREEMENT ENTERED INTO BY THE CITY THATOPERATED AS A BACKSTOP FOR THE PAYMENT OF THE INTEREST (BUTNOT THE PRINCIPAL) ON THE BANS, AND THE CITY'S ABILITY TO MAKEPAYMENTS IF NECESSARY. UNDER THAT CONTINGENT LOAN AGREEMENT,THE CITY WAS OBLIGATED TO LOAN TO THE DISTRICT FUNDS TO PAYINTEREST ON THE BANS IN THE EVENT THE DISTRICT'S REVENUES WEREINSUFFICIENT. NONETHELESS, A PARAGRAPH IN THE BODY OF THEPREDECESSOR'S PRELIMINARY OFFICIAL STATEMENT THAT HIGHLIGHTEDHOW THE CITY'S LOW REMAINING DEBT CAPACITY CONSTRAINED ITSOBLIGATIONS UNDER THAT CONTINGENT LOAN AGREEMENT WASDELETED FROM THE BODY OF THE OFFICIAL STATEMENT FOR THE BANS,THEREBY MISLEADING BAN PURCHASERS CONCERNING THE LIKELIHOODOF PERMANENT FINANCING.

    THE REGIONAL CENTER'S FINANCIAL RESULTS FOR 2008 THROUGH 2011WERE WORSE THAN THE COMPANY'S MOST PESSIMISTIC PROJECTIONS,WITH THE REGIONAL CENTER OPERATING AT A SIGNIFICANT NETOPERATING LOSS. MOREOVER, AFTER THE CITY FILED A VALIDATIONPROCEEDING, THE CHELAN COUNTY, WASHINGTON, SUPERIOR COURTRULED IN 2011 THAT OBLIGATIONS UNDER A CONTINGENT LOANAGREEMENT CONSTITUTED "INDEBTEDNESS" WITHIN THE MEANING OFTHE STATE CONSTITUTION AND THEREFORE WOULD BE LIMITED TO THECITY'S REMAINING DEBT CAPACITY OF $19.3 MILLION, AS THE DELETEDDISCLOSURE LANGUAGE HAD WARNED. CONSEQUENTLY, THE DISTRICTWAS UNABLE TO ISSUE LONG-TERM BONDS, AND THE DISTRICTDEFAULTED ON THE PAYMENT OF PRINCIPAL ON THE BANS IN DECEMBER2011.

    THE WASHINGTON STATE LEGISLATURE SUBSEQUENTLY PASSEDLEGISLATION TO HELP THE DISTRICT CURE ITS DEFAULT BY ALLOWINGTHE CITY TO IMPOSE AN ADDITIONAL SALES TAX WITHOUT VOTERAPPROVAL AND FURTHER ALLOWING THE DISTRICT TO SUBMIT TOVOTERS A PROPOSITION TO IMPOSE AN ADDITIONAL SALES TAX. THEVOTERS OF THE DISTRICT LATER APPROVED AN ADDITIONAL SALES TAX.ON SEPTEMBER 28, 2012, THE DISTRICT SOLD LONG-TERM BONDSSECURED SOLELY BY SALES TAX REVENUES TO REFINANCE THE BANS.

    AS A RESULT OF THE NEGLIGENT CONDUCT, PIPER WILLFULLY VIOLATEDSECTIONS 17(A)(2) AND (3) OF THE SECURITIES ACT.

    IN ANTICIPATION OF THE INSTITUTION OF THE PROCEEDINGS, PIPERSUBMITTED AN OFFER OF SETTLEMENT (THE "OFFER") WHICH THECOMMISSION DETERMINED TO ACCEPT. SOLELY FOR THEPURPOSE OF THE PROCEEDINGS AND ANY OTHER PROCEEDINGSBROUGHT BY OR ON BEHALF OF THE COMMISSION, OR TO WHICH THECOMMISSION IS A PARTY, AND WITHOUT ADMITTING OR DENYING THEFINDINGS, EXCEPT AS TO THE COMMISSION'S JURISDICTION OVER IT ANDTHE SUBJECT MATTER OF THE PROCEEDINGS, WHICH ARE ADMITTED,PIPER CONSENTED TO THE ENTRY OF THE ORDER INSTITUTINGADMINISTRATIVE AND CEASE-AND-DESIST PROCEEDINGS PURSUANT TOSECTION 8A OF THE SECURITIES ACT OF 1933 AND SECTIONS 15(B) AND15(B)(C) OF THE SECURITIES EXCHANGE ACT OF 1934, MAKING FINDINGS,AND IMPOSING REMEDIAL SANCTIONS AND A CEASE-AND-DESIST ORDER("ORDER").

    Does the order constitute afinal order based onviolations of any laws orregulations that prohibitfraudulent, manipulative, ordeceptive conduct?

    No

    Sanctions Ordered: CensureMonetary/Fine $300,000.00Cease and Desist/Injunction

    Order

    352018 FINRA. All rights reserved. Report about PIPER JAFFRAY & CO.

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  • www.finra.org/brokercheck User Guidance

    Regulator Statement (CONTINUED FROM #7) AND THOSE CITIZENS WOULD ULTIMATELYSUPPORT THE REGIONAL CENTER EVEN THOUGH THE COMPANY WASEXPERIENCING WEAK TICKET SALES AND OTHER TROUBLING INDICATORSREGARDING ANTICIPATED REVENUE. THE COMPANY REVISED ITSPROJECTIONS UPWARD AND THE MORE OPTIMISTIC REVISEDPROJECTIONS WERE INCLUDED IN THE OFFICIAL STATEMENT, WITHOUTDISCLOSING THAT THE CITY'S FORMER MAYOR OR THE DISTRICT'SCONTRACT MANAGER HAD QUESTIONED THE ASSUMPTIONS UNDERLYINGTHE PRIOR SET OF PROJECTIONS, OR THAT THE COMPANY HAD RELIEDON THE FORMER MAYOR'S VERBAL ASSERTIONS OF FUTURE COMMUNITYSUPPORT.

    PIPER STATED THAT THEY FOCUSED THEIR DUE DILIGENCE EFFORTS ONA CONTINGENT LOAN AGREEMENT ENTERED INTO BY THE CITY THATOPERATED AS A BACKSTOP FOR THE PAYMENT OF THE INTEREST (BUTNOT THE PRINCIPAL) ON THE BANS, AND THE CITY'S ABILITY TO MAKEPAYMENTS IF NECESSARY. UNDER THAT CONTINGENT LOAN AGREEMENT,THE CITY WAS OBLIGATED TO LOAN TO THE DISTRICT FUNDS TO PAYINTEREST ON THE BANS IN THE EVENT THE DISTRICT'S REVENUES WEREINSUFFICIENT. NONETHELESS, A PARAGRAPH IN THE BODY OF THEPREDECESSOR'S PRELIMINARY OFFICIAL STATEMENT THAT HIGHLIGHTEDHOW THE CITY'S LOW REMAINING DEBT CAPACITY CONSTRAINED ITSOBLIGATIONS UNDER THAT CONTINGENT LOAN AGREEMENT WASDELETED FROM THE BODY OF THE OFFICIAL STATEMENT FOR THE BANS,THEREBY MISLEADING BAN PURCHASERS CONCERNING THE LIKELIHOODOF PERMANENT FINANCING.

    THE REGIONAL CENTER'S FINANCIAL RESULTS FOR 2008 THROUGH 2011WERE WORSE THAN THE COMPANY'S MOST PESSIMISTIC PROJECTIONS,WITH THE REGIONAL CENTER OPERATING AT A SIGNIFICANT NETOPERATING LOSS. MOREOVER, AFTER THE CITY FILED A VALIDATIONPROCEEDING, THE CHELAN COUNTY, WASHINGTON, SUPERIOR COURTRULED IN 2011 THAT OBLIGATIONS UNDER A CONTINGENT LOANAGREEMENT CONSTITUTED "INDEBTEDNESS" WITHIN THE MEANING OFTHE STATE CONSTITUTION AND THEREFORE WOULD BE LIMITED TO THECITY'S REMAINING DEBT CAPACITY OF $19.3 MILLION, AS THE DELETEDDISCLOSURE LANGUAGE HAD WARNED. CONSEQUENTLY, THE DISTRICTWAS UNABLE TO ISSUE LONG-TERM BONDS, AND THE DISTRICTDEFAULTED ON THE PAYMENT OF PRINCIPAL ON THE BANS IN DECEMBER2011.

    THE WASHINGTON STATE LEGISLATURE SUBSEQUENTLY PASSEDLEGISLATION TO HELP THE DISTRICT CURE ITS DEFAULT BY ALLOWINGTHE CITY TO IMPOSE AN ADDITIONAL SALES TAX WITHOUT VOTERAPPROVAL AND FURTHER ALLOWING THE DISTRICT TO SUBMIT TOVOTERS A PROPOSITION TO IMPOSE AN ADDITIONAL SALES TAX. THEVOTERS OF THE DISTRICT LATER APPROVED AN ADDITIONAL SALES TAX.ON SEPTEMBER 28, 2012, THE DISTRICT SOLD LONG-TERM BONDSSECURED SOLELY BY SALES TAX REVENUES TO REFINANCE THE BANS.

    AS A RESULT OF THE NEGLIGENT CONDUCT, PIPER WILLFULLY VIOLATEDSECTIONS 17(A)(2) AND (3) OF THE SECURITIES ACT.

    IN ANTICIPATION OF THE INSTITUTION OF THE PROCEEDINGS, PIPERSUBMITTED AN OFFER OF SETTLEMENT (THE "OFFER") WHICH THECOMMISSION DETERMINED TO ACCEPT. SOLELY FOR THEPURPOSE OF THE PROCEEDINGS AND ANY OTHER PROCEEDINGSBROUGHT BY OR ON BEHALF OF THE COMMISSION, OR TO WHICH THECOMMISSION IS A PARTY, AND WITHOUT ADMITTING OR DENYING THEFINDINGS, EXCEPT AS TO THE COMMISSION'S JURISDICTION OVER IT ANDTHE SUBJECT MATTER OF THE PROCEEDINGS, WHICH ARE ADMITTED,PIPER CONSENTED TO THE ENTRY OF THE ORDER INSTITUTINGADMINISTRATIVE AND CEASE-AND-DESIST PROCEEDINGS PURSUANT TOSECTION 8A OF THE SECURITIES ACT OF 1933 AND SECTIONS 15(B) AND15(B)(C) OF THE SECURITIES EXCHANGE ACT OF 1934, MAKING FINDINGS,AND IMPOSING REMEDIAL SANCTIONS AND A CEASE-AND-DESIST ORDER("ORDER").

    362018 FINRA. All rights reserved. Report about PIPER JAFFRAY & CO.

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  • www.finra.org/brokercheck User Guidance

    (CONTINUED FROM #7) AND THOSE CITIZENS WOULD ULTIMATELYSUPPORT THE REGIONAL CENTER EVEN THOUGH THE COMPANY WASEXPERIENCING WEAK TICKET SALES AND OTHER TROUBLING INDICATORSREGARDING ANTICIPATED REVENUE. THE COMPANY REVISED ITSPROJECTIONS UPWARD AND THE MORE OPTIMISTIC REVISEDPROJECTIONS WERE INCLUDED IN THE OFFICIAL STATEMENT, WITHOUTDISCLOSING THAT THE CITY'S FORMER MAYOR OR THE DISTRICT'SCONTRACT MANAGER HAD QUESTIONED THE ASSUMPTIONS UNDERLYINGTHE PRIOR SET OF PROJECTIONS, OR THAT THE COMPANY HAD RELIEDON THE FORMER MAYOR'S VERBAL ASSERTIONS OF FUTURE COMMUNITYSUPPORT.

    PIPER STATED THAT THEY FOCUSED THEIR DUE DILIGENCE EFFORTS ONA CONTINGENT LOAN AGREEMENT ENTERED INTO BY THE CITY THATOPERATED AS A BACKSTOP FOR THE PAYMENT OF THE INTEREST (BUTNOT THE PRINCIPAL) ON THE BANS, AND THE CITY'S ABILITY TO MAKEPAYMENTS IF NECESSARY. UNDER THAT CONTINGENT LOAN AGREEMENT,THE CITY WAS OBLIGATED TO LOAN TO THE DISTRICT FUNDS TO PAYINTEREST ON THE BANS IN THE EVENT THE DISTRICT'S REVENUES WEREINSUFFICIENT. NONETHELESS, A PARAGRAPH IN THE BODY OF THEPREDECESSOR'S PRELIMINARY OFFICIAL STATEMENT THAT HIGHLIGHTEDHOW THE CITY'S LOW REMAINING DEBT CAPACITY CONSTRAINED ITSOBLIGATIONS UNDER THAT CONTINGENT LOAN AGREEMENT WASDELETED FROM THE BODY OF THE OFFICIAL STATEMENT FOR THE BANS,THEREBY MISLEADING BAN PURCHASERS CONCERNING THE LIKELIHOODOF PERMANENT FINANCING.

    THE REGIONAL CENTER'S FINANCIAL RESULTS FOR 2008 THROUGH 2011WERE WORSE THAN THE COMPANY'S MOST PESSIMISTIC PROJECTIONS,WITH THE REGIONAL CENTER OPERATING AT A SIGNIFICANT NETOPERATING LOSS. MOREOVER, AFTER THE CITY FILED A VALIDATIONPROCEEDING, THE CHELAN COUNTY, WASHINGTON, SUPERIOR COURTRULED IN 2011 THAT OBLIGATIONS UNDER A CONTINGENT LOANAGREEMENT CONSTITUTED "INDEBTEDNESS" WITHIN THE MEANING OFTHE STATE CONSTITUTION AND THEREFORE WOULD BE LIMITED TO THECITY'S REMAINING DEBT CAPACITY OF $19.3 MILLION, AS THE DELETEDDISCLOSURE LANGUAGE HAD WARNED. CONSEQUENTLY, THE DISTRICTWAS UNABLE TO ISSUE LONG-TERM BONDS, AND THE DISTRICTDEFAULTED ON THE PAYMENT OF PRINCIPAL ON THE BANS IN DECEMBER2011.

    THE WASHINGTON STATE LEGISLATURE SUBSEQUENTLY PASSEDLEGISLATION TO HELP THE DISTRICT CURE ITS DEFAULT BY ALLOWINGTHE CITY TO IMPOSE AN ADDITIONAL SALES TAX WITHOUT VOTERAPPROVAL AND FURTHER ALLOWING THE DISTRICT TO SUBMIT TOVOTERS A PROPOSITION TO IMPOSE AN ADDITIONAL SALES TAX. THEVOTERS OF THE DISTRICT LATER APPROVED AN ADDITIONAL SALES TAX.ON SEPTEMBER 28, 2012, THE DISTRICT SOLD LONG-TERM BONDSSECURED SOLELY BY SALES TAX REVENUES TO REFINANCE THE BANS.

    AS A RESULT OF THE NEGLIGENT CONDUCT, PIPER WILLFULLY VIOLATEDSECTIONS 17(A)(2) AND (3) OF THE SECURITIES ACT.

    IN ANTICIPATION OF THE INSTITUTION OF THE PROCEEDINGS, PIPERSUBMITTED AN OFFER OF SETTLEMENT (THE "OFFER") WHICH THECOMMISSION DETERMINED TO ACCEPT. SOLELY FOR THEPURPOSE OF THE PROCEEDINGS AND ANY OTHER PROCEEDINGSBROUGHT BY OR ON BEHALF OF THE COMMISSION, OR TO WHICH THECOMMISSION IS A PARTY, AND WITHOUT ADMITTING OR DENYING THEFINDINGS, EXCEPT AS TO THE COMMISSION'S JURISDICTION OVER IT ANDTHE SUBJECT MATTER OF THE PROCEEDINGS, WHICH ARE ADMITTED,PIPER CONSENTED TO THE ENTRY OF THE ORDER INSTITUTINGADMINISTRATIVE AND CEASE-AND-DESIST PROCEEDINGS PURSUANT TOSECTION 8A OF THE SECURITIES ACT OF 1933 AND SECTIONS 15(B) AND15(B)(C) OF THE SECURITIES EXCHANGE ACT OF 1934, MAKING FINDINGS,AND IMPOSING REMEDIAL SANCTIONS AND A CEASE-AND-DESIST ORDER("ORDER").

    iReporting Source: Firm

    Allegations: SEC ADMIN RELEASES 33-9472, 34-70804, NOVEMBER 5, 2013: THESECURITIES AND EXCHANGE COMMISSION ("COMMISSION") DEEMED ITAPPROPRIATE AND IN THE PUBLIC INTEREST THAT PUBLICADMINISTRATIVE AND CEASE-AND-DESIST PROCEEDINGS BE INSTITUTEDPURSUANT TO SECTION 8A OF THE SECURITIES ACT OF 1933("SECURITIES ACT") AND SECTIONS 15(B) AND 15(B)(C)(2) OF THESECURITIES EXCHANGE ACT OF 1934 ("EXCHANGE ACT") AGAINST PIPERJAFFRAY & CO. ("PIPER"). THE COMMISSION FOUND THAT IN 2011, AMUNICIPAL CORPORATION ("DISTRICT") DEFAULTED ON $41.77 MILLION INBOND ANTICIPATION NOTES ("BANS") IT HAD ISSUED IN NOVEMBER 2008TO FINANCE A MULTI-USE ARENA AND ICE HOCKEY RINK (THE "REGIONALCENTER") LOCATED IN THE CITY OF WENATCHEE, WASHINGTON (THE "CITY"). PIPER SERVED AS SOLE UNDERWRITER FOR THE BANS. THEOFFICIAL STATEMENT FOR THE BANS WAS MATERIALLY FALSE ANDMISLEADING. PIPER WAS HIRED BY THE DISTRICT AS UNDERWRITER AS ALAST MINUTE REPLACEMENT FOR A PREDECESSOR UNDERWRITING FIRM("PREDECESSOR"). THE PREDECESSOR HAD BEEN WORKING WITH THEDISTRICT FOR OVER A YEAR AND HAD COMPLETED A PRELIMINARYOFFICIAL STATEMENT FOR LONG-TERM BONDS WHICH HAD RECEIVED ANINVESTMENT GRADE RATING. THAT PREDECESSOR WITHDREW INSEPTEMBER 2008 AFTER THE GLOBAL FINANCIAL CRISIS PREVENTEDACCESS TO THE BOND MARKET AND THE FIRM WAS UNABLE TOCOMPLETE THE FINANCING. PIPER'S ENGAGEMENT WITH THE DISTRICTSTARTED ON OCTOBER 27, 2008. BY THE TIME PIPER BECAME THEUNDERWRITER ON THE DEAL, THE CITY AND THE DISTRICT WEREDESPERATE TO FIND FINANCING FOR THE REGIONAL CENTER WITHIN AMONTH BECAUSE OF ONEROUS LEASE PAYMENTS BEING DEMANDED BYTHE CONSTRUCTION LENDER. PIPER SUGGESTED SEVERAL FINANCINGOPTIONS, ALTHOUGH ONLY ONE, SHORT-TERM BANS, WAS CONSIDEREDVIABLE. THE DISTRICT DETERMINED TO ISSUE THREE YEAR BANS THATWOULD MATURE IN 2011, WITH THE PRINCIPAL OF THE BANS TO BEREPAID SOLELY THROUGH THE ISSUANCE OF LONG-TERM BONDS. PIPERCONDUCTED INADEQUATE DUE DILIGENCE AND, AS A RESULT, FAILED TOFORM A REASONABLE BASIS FOR BELIEVING THE TRUTHFULNESS ANDCOMPLETENESS OF MATERIAL STATEMENTS IN THE OFFICIAL STATEMENT.THE OFFICIAL STATEMENT FOR THE BANS WAS A LIGHTLY REVISEDVERSION OF THE PRELIMINARY OFFICIAL STATEMENT PREPARED BY THEPREDECESSOR AND THE DISTRICT'S BOND COUNSEL THAT INCLUDEDSIMILAR DISCLOSURES AND RELIED ON THE SAME PROJECTIONS FORTHE REGIONAL CENTER PROVIDED BY THE COMPANY ("COMPANY") HIREDTO DEVELOP AND MANAGE THE REGIONAL CENTER. PIPER CONDUCTED ACURSORY INQUIRY INTO THE PROJECTIONS PROVIDED BY THE COMPANY,DID NOT INQUIRE ABOUT PRIOR PROJECTIONS OR REVISIONS, AND DIDNOT ASK TO SEE AN INDEPENDENT CONSULTANT'S REVIEW OF THEPROJECTIONS DESPITE BEING MADE AWARE OF ITS EXISTENCE,DEPRIVING BAN PURCHASERS OF MATERIAL INFORMATION RELATING TOTHE REVENUE PROJECTIONS, THE FIRST SOURCE OF PAYMENT FOR THEMAJORITY OF THE BANS. AN INDEPENDENT CONSULTANT HAD BEENASKED TO REVIEW THE COMPANY'S EARLIER PROJECTIONS AND HADRAISED QUESTIONS ABOUT THE REGIONAL CENTER'S ECONOMICVIABILITY. DESPITE TWO SEPARATE REVIEWS OF PRIOR COMPANYPROJECTIONS BY THE INDEPENDENT CONSULTANT, THE OFFICIALSTATEMENT PRESENTED THE MOST RECENT VERSION OF THECOMPANY'S PROJECTIONS ALONG WITH A FALSE AND MISLEADINGSTATEMENT TO THE EFFECT THAT NO FINANCIAL ADVISOR, ACCOUNTINGOR OTHER FIRM HAD EXAMINED THOSE PROJECTIONS TO VERIFY THEREASONABLENESS OF THE COMPANY'S ASSUMPTIONS OR ITSCONCLUSIONS. PIPER WAS UNAWARE THAT THE PROJECTIONS IN THEOFFICIAL STATEMENT HAD BEEN REVISED UPWARD FROM PROJECTIONSGENERATED A FEW MONTHS EARLIER AFTER A CLAIM BY THE CITY'SFORMER MAYOR AND THE DISTRICT'S CONTRACT MANAGER THAT THECOMPANY'S PROJECTIONS WERE INCONSISTENT WITH ITS PRIORPROJECTIONS AND NOT SUFFICIENTLY OPTIMISTIC. DURING ACONFERENCE CALL WITH THE COMPANY'S PRESIDENT AND THECOMPANY'S FINANCIAL CONSULTANT, THE CITY'S FORMER MAYOR MADEAN IMPASSIONED ARGUMENT THAT THEY KNEW THE LOCAL CITIZENSBETTER THAN THE COMPANY, (CONTINUED IN COMMENT)

    Current Status: Final

    372018 FINRA. All rights reserved. Report about PIPER JAFFRAY & CO.

    http://www.finra.org/brokercheckhttp://www.finra.org/brokercheck_reportshttp://www.finra.org

  • www.finra.org/brokercheck User Guidance

    SEC ADMIN RELEASES 33-9472, 34-70804, NOVEMBER 5, 2013: THESECURITIES AND EXCHANGE COMMISSION ("COMMISSION") DEEMED ITAPPROPRIATE AND IN THE PUBLIC INTEREST THAT PUBLICADMINISTRATIVE AND CEASE-AND-DESIST PROCEEDINGS BE INSTITUTEDPURSUANT TO SECTION 8A OF THE SECURITIES ACT OF 1933("SECURITIES ACT") AND SECTIONS 15(B) AND 15(B)(C)(2) OF THESECURITIES EXCHANGE ACT OF 1934 ("EXCHANGE ACT") AGAINST PIPERJAFFRAY & CO. ("PIPER"). THE COMMISSION FOUND THAT IN 2011, AMUNICIPAL CORPORATION ("DISTRICT") DEFAULTED ON $41.77 MILLION INBOND ANTICIPATION NOTES ("BANS") IT HAD ISSUED IN NOVEMBER 2008TO FINANCE A MULTI-USE ARENA AND ICE HOCKEY RINK (THE "REGIONALCENTER") LOCATED IN THE CITY OF WENATCHEE, WASHINGTON (THE "CITY"). PIPER SERVED AS SOLE UNDERWRITER FOR THE BANS. THEOFFICIAL STATEMENT FOR THE BANS WAS MATERIALLY FALSE ANDMISLEADING. PIPER WAS HIRED BY THE DISTRICT AS UNDERWRITER AS ALAST MINUTE REPLACEMENT FOR A PREDECESSOR UNDERWRITING FIRM("PREDECESSOR"). THE PREDECESSOR HAD BEEN WORKING WITH THEDISTRICT FOR OVER A YEAR AND HAD COMPLETED A PRELIMINARYOFFICIAL STATEMENT FOR LONG-TERM BONDS WHICH HAD RECEIVED ANINVESTMENT GRADE RATING. THAT PREDECESSOR WITHDREW INSEPTEMBER 2008 AFTER THE GLOBAL FINANCIAL CRISIS PREVENTEDACCESS TO THE BOND MARKET AND THE FIRM WAS UNABLE TOCOMPLETE THE FINANCING. PIPER'S ENGAGEMENT WITH THE DISTRICTSTARTED ON OCTOBER 27, 2008. BY THE TIME PIPER BECAME THEUNDERWRITER ON THE DEAL, THE CITY AND THE DISTRICT WEREDESPERATE TO FIND FINANCING FOR THE REGIONAL CENTER WITHIN AMONTH BECAUSE OF ONEROUS LEASE PAYMENTS BEING DEMANDED BYTHE CONSTRUCTION LENDER. PIPER SUGGESTED SEVERAL FINANCINGOPTIONS, ALTHOUGH ONLY ONE, SHORT-TERM BANS, WAS CONSIDEREDVIABLE. THE DISTRICT DETERMINED TO ISSUE THREE YEAR BANS THATWOULD MATURE IN 2011, WITH THE PRINCIPAL OF THE BANS TO BEREPAID SOLELY THROUGH THE ISSUANCE OF LONG-TERM BONDS. PIPERCONDUCTED INADEQUATE DUE DILIGENCE AND, AS A RESULT, FAILED TOFORM A REASONABLE BASIS FOR BELIEVING THE TRUTHFULNESS ANDCOMPLETENESS OF MATERIAL STATEMENTS IN THE OFFICIAL STATEMENT.THE OFFICIAL STATEMENT FOR THE BANS WAS A LIGHTLY REVISEDVERSION OF THE PRELIMINARY OFFICIAL STATEMENT PREPAR