Collection of Information
U.S. Federal law requires Carolina Financial Securities, LLC (CFS) and Carofin, LLC (Carofin) to obtain, verify and record information that identifies each person that enters into a securities transaction with us. What this means for you is that when you enter into a transaction, we will ask for your name, a street address, date of birth, and an identification number, such as a Social Security No. or other identification number, that Federal law requires us to obtain. We may also ask to see a driver’s license, corporate formation document (for corporate entities), or other identifying documents that will allow us to identify you or the corporate entity seeking to initiate a transaction.
To comply with regulatory requirements, CFS and Carofin have adopted background check procedures. CFS and Carofinuse a consumer reporting service to collect information about our customers to satisfy these regulatory requirements. Upon your request CFS and Carofin will inform you whether we have obtained any such consumer reports and if we have, we will inform you of the name and address of the consumer reporting agency that furnished the reports to us.
Protection of Information
CFS and Carofin are members of the Financial Industry Regulation Authority (FINRA). FINRA Notice 00-66 specifies that its members must comply with Regulation S-P of the SEC, “Privacy of Consumer Information” (“Privacy Act”). In part, the Privacy Act requires that each broker-dealer adopt policies and procedures that address the protection of customer information and records.
CFS and Carofin receive confidential information in the course of its business. This includes subscription documents and questionnaires that have been filled out by our investors. These may contain social security numbers, home addresses, annual income, net worth, educational background, Employer Identification Numbers, and other related data that is essential for CFS and Carofin to have in determining the suitability of investors to engage in private placement investments. Additionally, CFS and Carofin may obtain third party reports on investors concerning their background and business conduct.
It is the policy of CFS and Carofin not to disclose nonpublic personal information relating to current or former investors to any third parties, except to certain service providers and as permitted by law, including but not limited to any obligations of CFS and Carofin under the USA PATRIOT Act. We have safeguards in place to ensure that access to your nonpublic personal information is restricted to only those employees and affiliates that have authorization and a valid reason to access it. We instruct our employees to use strict standards of care in handling the personal information of investors. Our staff will not discuss or disclose information regarding an investor except as permitted by law or pursuant to regulatory request and/or authority.
CFS and Carofin maintain physical, electronic, and procedural safeguards to guard customers’ nonpublic personal information. These safeguards include keeping all confidential information within premises that are locked or manned atall times, keeping all electronic information behind firewalls, encrypted, and/or password protected, maintaining a strict confidentiality policy, and covering confidentiality policies at continuing education meetings.
Sharing of Information
CFS and Carofin may, from time to time, disclose nonpublic personal information relating to current or former investors with nonaffiliated third parties providing services to CFS and Carofin. These service providers undertake their own confidentiality requirements to protect the information of current and former CFS and Carofin investors, and such requirements are governed by a contractual relationship between CFS, Carofin, and these service providers. These non-affiliated third parties will not market their services to you.
CFS may also share nonpublic personal information relating to current or former investors with Carofin, LLC, an affiliated Broker-Dealer. Carofin often distributes marketing solicitations on behalf of CFS. Not only do CFS and Carofin share the same database, and the accompanying safeguards, but these affiliates also share the same staff.
For your convenience, this Policy on Collection of and Protection of Consumer Information and Records is available on our website at www.carofin.com. Please be advised that CFS and Carofin reserve the right to update this policy as needed.
BUSINESS CONTINUITY PLAN
CFS Business Continuity Statement
As a member of FINRA, Carolina Financial Securities, LLC (CFS) is bound by all FINRA and SEC rules and regulations. FINRA Rule 4730 specifies that each member firm must maintain a plan with adequate procedures to ensure that in the face of an emergency or significant business disruption, the member firm will be able to meet all existing obligations to customers .
In an effort to comply with this rule, as well as an attempt to ensure that we consistently provide the highest level of service possible to our customers, without falter, CFS has developed a Business Continuity Plan that we believe is designed to permit us to deliver virtually uninterrupted service to our customers in the event of an emergency.
One of the greatest strengths of CFS to achieve this level of assurance is the geographic disparity of our personnel. Only a small portion of our firm representatives are located at our headquarters in Brevard, NC. The remainder of firm personnel are spread out in other parts of North Carolina, Georgia, Connecticut, and California. In the event of an emergency central to our headquarters, CFS will first attempt to move operations to the home of Bruce Roberts, firm President. If the emergency is dramatic enough to impact the entire area and render us without local access to the necessary resources to effectively continue business, our outside personnel are equipped with the skills and abilities necessary to continue operations nearly seamlessly. The use of a calling tree will immediately be implemented to coordinate deployment of firm personnel to the established business location.
All CFS data are backed up remotely on a weekly basis. During an emergency, once a physical location for conducting business has been established and employees have been located and notified, the most recent data backup will be transferred to that location. These data include digital copies of all customer closing documents. CFS does not maintain custody of customer funds or securities and all customers are provided with complete sets of closing documents for each transaction that they initiate. The customer’s own copy serves as an additional backup to the remote data backup. At the off-site location that is established, CFS will procure necessary communications, digital or analog, to contact customers and issuers in order to resume operations.