# DCI FINRA Disclosure Events The Development Corporation for Israel's FINRA regulatory record contains four Current Disclosure Summary occurrences: three publicly-disclosable substantive regulatory events (SEC 1983, NC 1984, NASD 1997-1998) plus one non-publicly-disclosable 2014 control-affiliate disclosure tied to Stuart Garawitz. The seed-list characterized DCI's regulatory record as "3 FINRA events"; the 4-occurrence formal count is the production's resolution of that seed-list claim. The seed-list count is technically a public-disclosability count and is conservative in that respect; the formal occurrence count documented in the Arkansas Securities Department FOIA production at [[securities-foia-r1-4-20-26]] is 4. All three substantive events involve recordkeeping, registration-lapse, or supervisory-control compliance failures rather than substantive trading-misconduct, market-manipulation, or fraud findings. The pattern is consistent across the 15-year window 1983-1998. The fourth (2014) occurrence's substantive content is not documented in the production. None of the four occurrences involves Arkansas as a regulator or jurisdiction. ## Occurrence 118865 — SEC currency reporting and recordkeeping violations (1983) **Date initiated**: 04/01/1983 **Resolution date**: 12/01/1983 (BD), 12/05/1983 (U6) **Regulator**: Securities and Exchange Commission **Docket**: Administrative Proceeding File No. 3-6308 **Principal Sanction**: Censure **Monetary Fine**: $0 **Resolution**: Consent **Publicly Disclosable**: Yes **Reportable**: Yes **Product Type**: Debt - Government Verbatim allegations (BD Disclosure Reporting Page): > [!evidence] ASD-008_Current-Disclosure-Summary-CRD-Occurrence-118865.pdf, page 2 > "BRANCH OFFICES FAILED TO MAINTAIN DAILY CASH RECEIPTS LEDGERS, FAILURE TO PROPERLY RECORD CASH RECEIPTS AND FAILURE TO MAINTAIN COPIES OF RECEIPTS GIVEN TO CUSTOMERS IN VIOLATION OF RULES 17A-3 AND L7A-8. SALE OF SECURITES WITHOUT OBTAINING OR RECORDING CUSTOMER ACCOUNT INFORMATION INCLUDING SOCIAL SECURITY NUMBER, DATE OF BIRTH, SIGNATURE AND CITIZENSHIP IN VIOLATION OF RULE 1S(6)1-6. FAILURE TO SUPERVISE IN VIOLATION OF RULE 1S(6)10-4." Verbatim resolution narrative (U6 Disclosure Reporting Page): > [!evidence] ASD-008_Current-Disclosure-Summary-CRD-Occurrence-118865.pdf, pages 4-5 > "SEC NEWS DIGEST, ISSUE 83-233, DECEMBER 5, 1983. THE COMMISSION HAS ACCEPTED AN OFFER OF SETTLEMENT FROM THE DEVELOPMENT CORPORATION FOR ISRAEL IN CONJUNCTION WITH PUBLIC ADMINISTRATIVE PROCEEDINGS BROUGHT AGAINST THE FIRM. THE COMMISSION HAD ALLEGED THAT FROM JANUARY 1982 TO THE PRESENT, IT WILFULLY VIOLATED CERTAIN CURRENCY REPORTING AND RECORDKEEPING PROVISIONS OF THE SECURITIES LAWS. DCI VIOLATED THESE PROVISIONS BY FAILING TO FILE CURRENCY TRANSACTION REPORTS WITH THE INTERNAL REVENUE SERVICE FOR TRANSACTIONS IN WHICH THE FIRM RECEIVED MORE THAN $10,000 IN CURRENCY FROM ITS CUSTOMERS AND BY FAILING TO PROPERLY RECORD THESE CURRENCY TRANSACTIONS. THE COMMISSION ALSO FOUND THAT DCI FAILED TO OBTAIN CERTAIN CUSTOMER INFORMATION AND TO MAINTAIN CERTAIN RECORDS. THE FIRM ALSO FAILED TO PROVIDE FOR SUPERVISION OF ITS EMPLOYEES. THE FIRM CONSENTED TO A CENSURE AND AN ORDER TO COMPLY WITH UNDERTAKINGS TO CORRECT THE DELINQUENT CURRENCY TRANSACTION PROCEDURES. (REL. 34020434)" The 1983 SEC event documents systemic recordkeeping and supervisory failures at the DCI branch level from January 1982 through December 1983. The currency-reporting violations specifically involved cash transactions exceeding $10,000 — a Bank Secrecy Act threshold — without the required Currency Transaction Reports filed with the IRS. The customer-identification failures (missing SSN, date of birth, signature, citizenship) are foundational know-your-customer compliance failures. The sanction (censure with undertakings, no monetary fine) is procedurally light relative to the substantive scope of the violations; the consent settlement structure indicates DCI did not contest the findings. ## Occurrence 118866 — North Carolina registration-lapse consent order (1984) **Date initiated**: 02/16/1984 **Resolution date**: 05/07/1984 **Regulator**: North Carolina Department of the Secretary of State **Docket**: File No. ECC84-006 **Principal Sanction**: Other (Consent Order) **Monetary Fine**: $0 **Resolution**: Consent **Publicly Disclosable**: Yes **Reportable**: Yes **Product Type**: Debt - Government Verbatim allegations: > [!evidence] ASD-009_Current-Disclosure-Summary-CRD-Occurrence-118866.pdf, page 2 > "FAILURE TO RENEW REGISTRATION AND SALE OF SECURITIES IN VIOLATION OF REGISTRATION REQUIREMENTS" Verbatim resolution narrative: > [!evidence] ASD-009_Current-Disclosure-Summary-CRD-Occurrence-118866.pdf, page 4 > "CONSENT ORDER ENTERED INTO BETWEEN THE STATE OF NORTH CAROLINA AND DEVELOPMENT CORPORATION FOR ISRAEL (DCI), FILE NO. ECC84-006, ON 5/7/84 STIPULATING THAT DCI HAD CONTINUED TO ACT AS A DEALER IN THE STATE WHEN ITS REGISTRATION HAD LAPSED IN VIOLATION OF G.S. 78A-47(b)(1). DCI AGREED TO CEASE AND DESIST FROM FURTHER VIOLATIONS OF THE NORTH CAROLINA SECURITIES ACT, TO MAKE RESCISSION OFFERS TO THOSE RESIDENTS WHO PURCHASED SECURITIES WHEN DCI WAS NOT REGISTERED, TO ADOPT PROCEDURES TO PREVENT FURTHER LAPSES IN REGISTRATION AND TO SUBMIT AN AFFIDAVIT STATING THAT THESE PROCEDURES HAVE BEEN IMPLEMENTED." The 1984 North Carolina event documents that DCI continued selling Israel Bonds to North Carolina residents during a period when its NC broker-dealer registration had lapsed. The remedy required DCI to make rescission offers to NC residents who purchased Israel Bonds during the lapse period — a substantive remedy that could have produced refund obligations to affected customers. The production does not document the number of NC residents affected, the dollar amount of rescission offers, or the take-up rate. The 1984 NC event temporally bracketed DCI's 1984 Arkansas registration effective date of 06/25/1984; the NC consent order resolution date of 05/07/1984 predates the AR effective date by approximately seven weeks, suggesting DCI's multi-state 1983-1984 registration expansion was concurrent with the NC registration-lapse remediation. ## Occurrence 279351 — NASD unregistered-principal-functioning action (1997-1998) **Date initiated**: 05/28/1997 (NASD notification letter); 07/24/1998 (final AWC) **Resolution date**: 05/04/1998 (AWC executed); 07/24/1998 (AWC accepted) **Regulator**: National Association of Securities Dealers **Docket**: Letter of Acceptance, Waiver and Consent No. C06980016 **Principal Sanction**: Civil and Administrative Penalty/Fine plus Censure **Monetary Fine**: $9,500.00 (paid 08/27/1998, Invoice #98-06-667) **Resolution**: Acceptance, Waiver & Consent (AWC) **Publicly Disclosable**: Yes **Reportable**: Yes **Product Type**: Debt - Government Verbatim allegations: > [!evidence] ASD-011_Current-Disclosure-Summary-CRD-Occurrence-279351.pdf, page 2 > "FROM APPROXIMATELY JANUARY 1997 THROUGH JUNE 1997, A PERSON ENGAGED IN THE SECURITIES BUSINESS OF DEVELOPMENT CORPORATION FOR ISRAEL FUNCTIONED AS A PRINCIPAL EVEN THOUGH THIS PERSON WAS NOT REGISTERED AS A PRINCIPAL WITH THE NASD IN VIOLATION OF NASD RULES 102 1 (A) AND 2110; FAILURE TO SUPERVISE AND MAINTAIN SUPERVISORY PROCEDURES TO INSURE THAT ALL PERSONS FUNCTIONING AS PRINCIPALS WERE REGISTERED AS SUCH WITH THE NASD." Verbatim resolution narrative: > [!evidence] ASD-011_Current-Disclosure-Summary-CRD-Occurrence-279351.pdf, pages 4-5 > "ON JULY 24, 1998, DISTRICT NO. 6 NOTIFIED RESPONDENT DEVELOPMENT CORPORATION FOR ISRAEL THAT THE LETTER OF ACCEPTANCE, WAIVER AND CONSENT NO. C06980016 WAS ACCEPTED; THEREFORE, RESPONDENT MEMBER IS CENSURED, FINED $9,500, AND REQUIRED TO PROMPTLY ENGAGE AN INDEPENDENT CONSULTANT FOR PURPOSES OF MAKING RECOMMENDATIONS DESIGNED TO ENHANCE ITS SUPERVISORY SYSTEM, INCLUDING ITS WRITTEN SUPERVISORY PROCEDURES, FOR THE PURPOSE OF ACHIEVING COMPLIANCE WITH THE RULES OF THE NASD - (NASD RULES 1021(a), 2110 AND 3010(a) - A PERSON ENGAGED IN INVESTMENT BANKING AND/OR SECURITIES BUSINESS OF RESPONDENT MEMBER FUNCTIONED AS A PRINCIPAL, EVEN THOUGH SUCH PERSON WAS NOT REGISTERED AS A PRINCIPAL WITH THE NASD IN THE CATEGORY OF REGISTRATION APPROPRIATE TO THE FUNCTION PERFORMED; AND, RESPONDENT MEMBER FAILED TO ESTABLISH AND MAINTAIN A SYSTEM TO SUPERVISE THE ACTIVITIES OF ASSOCIATED PERSONS THAT WAS REASONABLY DESIGNED TO ACHIEVE COMPLIANCE WITH THE RULES OF THE NASD, IN THAT, IT FAILED TO ESTABLISH AND MAINTAIN WRITTEN SUPERVISORY PROCEDURES DESIGNED TO INSURE THAT ALL PERSONS FUNCTIONING AS PRINCIPALS WERE REGISTERED AS SUCH WITH THE NASD IN THE CATEGORY OF REGISTRATION APPROPRIATE TO THE FUNCTION PERFORMED). **** $9,500 PAID ON 8/27/98, INVOICE #98-06-667 ****" The 1997-1998 NASD event documents a six-month period in which an unidentified person at DCI functioned as a principal — directing securities business — without holding the required NASD principal registration. The remedy required DCI to engage an independent consultant to redesign its supervisory system and written supervisory procedures. The identity of the unregistered-principal-functioning person is not disclosed in the production; the AWC's principle of focusing remedy on the firm rather than the individual is consistent with NASD/FINRA practice for firm-level supervisory failures. The $9,500 fine is the only documented monetary penalty in DCI's FINRA disclosure record across all four occurrences. ## Occurrence 1711997 — Non-public 2014 control-affiliate disclosure on Stuart Garawitz **Date filed**: 07/10/2014 (BD Amendment) **Questions answered**: 11D2, 11D5 **Regulator**: not entered (blank field in production) **Docket**: not entered **Principal Sanction**: not entered **Monetary Fine**: not entered **Resolution**: not entered **Publicly Disclosable**: No **Reportable**: Yes Control affiliate identification: > [!evidence] ASD-010_Current-Disclosure-Summary-CRD-Occurrence-1711997.pdf, page 2 > "BD DRP - Control Affiliate > Control Affiliate Name: GARAWITZ, STUART NEAL > CRD#: 861993 > Registered: Y" All other fields on the BD Regulatory Action DRP are blank. The DRP form's Part II (Regulatory Action initiated by, Principal Sanction, Date Initiated, Docket/Case Number, Allegations, Resolution Detail) is not populated. The production does not disclose what regulatory action triggered the 2014 BD Amendment, what regulator initiated the action, what allegations were made, what sanction was imposed, what dollar amount if any was at issue, or how the matter resolved. The "Publicly Disclosable: No" classification is the regulator's designation that the underlying event is not disclosable through BrokerCheck or other public FINRA disclosure channels. The "Reportable: Yes" classification is the regulator's designation that DCI was required to file the BD Amendment disclosing the existence of a control-affiliate regulatory matter even though the substantive event details are not public. The temporal context: the 07/10/2014 BD Amendment filing date is in the May 2014 cluster of DCI board-reconstitution events documented at ASD-023 (Hutter, Lewis, Herbstmans, Grant, Segal, Pines, Fox, and Kruger added 05/2014). The Garawitz Direct Owners VP-Sales effective date is 01/2012, predating the 07/2014 filing by approximately two and a half years. The 2014 BD Amendment may reflect a U4-level regulatory action against Garawitz personally that became reportable at the firm level through his control-affiliate status; the production does not document whether this is the case or what alternative explanation applies. The wiki has no documented substantive 2014 Garawitz-personal regulatory matter; the production does not advance that question. ## Patterns across the four occurrences The structural pattern is consistent across the three substantive events (1983, 1984, 1997-1998): 1. **All three substantive events involve compliance, recordkeeping, registration, or supervisory failures** — not substantive trading misconduct, fraud findings, market manipulation, customer-suitability violations on individual transactions, sales-practice violations on specific transactions, or substantive misstatement of material facts in connection with securities sales. The pattern indicates that DCI's documented regulatory record is the record of compliance-infrastructure deficiencies, not of substantive sales misconduct. 2. **All three substantive events involve "Debt - Government" as the Principal Product Type** — Israel Bonds in each case. The product type is consistent across the 15-year window 1983-1998, reflecting DCI's 12Q single-issuer-dealer status documented at [[dci-arkansas-limited-registration]]. 3. **All three substantive events resolved by consent** — Consent (SEC 1983), Consent Order (NC 1984), and Acceptance, Waiver & Consent (NASD 1997-1998). No documented contested adjudication, appeal, or trial process. The consent-resolution pattern is consistent with firm-level compliance-deficiency events where the firm and the regulator agree on remedy without contested fact-finding. 4. **Monetary sanctions totaled $9,500 across all three substantive events** — the entire monetary penalty is the 1998 NASD fine. The 1983 SEC and 1984 NC events produced no monetary penalty. The NC 1984 event required rescission offers to affected NC residents but the production does not document the actual rescission-offer dollar amount. 5. **No Arkansas involvement in any of the four occurrences** — the 1986 Arkansas suspension at [[dci-1986-arkansas-suspension]] is not on DCI's FINRA disclosure record. The four FINRA occurrences are SEC (federal), NC (state-other-than-Arkansas), NASD (federal SRO), and the non-public 2014 (regulator not disclosed). The Arkansas-state-regulatory profile of DCI is documented entirely in the AR Securities Department's own files preserved at [[securities-foia-r1-4-20-26]], not in the FINRA disclosure system. The structural reading the wiki adopts: DCI's documented FINRA regulatory record is a compliance-infrastructure record. It does not document substantive misconduct on the Israel Bonds product. It does not document Arkansas-specific regulatory engagement. It does not document any regulatory action related to the post-2018 Arkansas state-government Israel Bonds purchase pattern. The Pension-fund-purchaser relevance, while present, is bounded: the 1983 customer-identification failures and the 1997-1998 unregistered-principal-functioning failures bear on DCI's institutional capacity to comply with FINRA supervisory standards, but the wiki has no evidence that those failures persisted into the documented 2018-2026 Arkansas Israel Bonds purchase period. The Arkansas pension systems' adoption pathway documented across the wiki's productions operates against DCI's clean 1999-2026 FINRA disclosure record (after the 1998 NASD AWC). The 2014 non-public Garawitz control-affiliate disclosure is the only post-1998 disclosure event but its substantive content is not in the production. ## The seed-list 3-versus-4 reconciliation The wiki's seed-list characterized DCI's regulatory record as "DCI has 3 FINRA events (CRD #11148)." The Arkansas Securities Department FOIA production resolves the count to 4 formal Current Disclosure Summary occurrences. The reconciliation: - **The seed-list "3 events" claim is consistent with the public-disclosability count.** Three of the four occurrences are Publicly Disclosable = Yes (the 1983 SEC, 1984 NC, 1997-1998 NASD events). One (the 2014 Garawitz control-affiliate disclosure) is Publicly Disclosable = No. - **The formal Current Disclosure Summary occurrence count is 4.** All four occurrences carry a Reportable = Yes flag and appear as distinct entries in the Current Disclosure Summary Composite report at ASD-012. - **The seed-list count understates the formal occurrence count by 1 but is conservative in that respect** (it counts only the publicly-knowable events). - **The wiki adopts the 4-occurrence formal count** as the accurate documentation of DCI's FINRA disclosure record, with the public-disclosability filter preserved as a substantive characteristic of the fourth occurrence. The seed-list has been updated to reflect the 4-occurrence count with reference to this concept page. ## Cross-references [[securities-foia-r1-4-20-26]] source page [[development-corporation-for-israel]] DCI entity page (FINRA disclosure events cross-referenced in DCI regulatory profile) [[stuart-garawitz]] DCI Vice President - Sales; subject of the non-public 2014 control-affiliate disclosure (Occurrence 1711997) [[dci-arkansas-limited-registration]] companion concept page on DCI's structural single-issuer AR-registration restriction [[dci-1986-arkansas-suspension]] companion concept page on the 1986 procedural-compliance AR suspension (NOT on DCI's FINRA disclosure record) [[independent-credit-analysis-gap]] companion concept page on the structural credit-analysis gap reinforced by DCI's single-issuer status ## Tensions This concept page is documentary-inventory and surfaces no first-class tensions. The page documents settled FINRA Current Disclosure Summary records preserved at ASD-008, ASD-009, ASD-010, ASD-011, and ASD-012: four occurrences (three publicly-disclosable substantive regulatory events plus one non-publicly-disclosable 2014 control-affiliate disclosure), each with verbatim allegations, resolution narrative, dates, sanctions, and disclosability classifications. The CRD-recorded status of each occurrence is unambiguous in the Tier-1 record. The seed-list's "3 events" claim is reconciled within the page (consistent with the public-disclosability count, conservative against the formal 4-occurrence count). The structural-characterization contestation on the 1986 Arkansas regulatory record (not on the FINRA disclosure system) is tracked at [[T032 - DCI 1986 Arkansas Suspension Substantive vs Pro Forma]] on the companion concept page [[dci-1986-arkansas-suspension]]. The 2014 Garawitz control-affiliate disclosure's substantive content is non-public and undocumented in the production; that documentary gap is a documented absence, not a contested mechanism. See [[methodology]] § II for the criteria distinguishing documentary-inventory pages from concept pages that surface contested mechanisms.