0001608743-17-000003.txt : 20170124 0001608743-17-000003.hdr.sgml : 20170124 20170124113139 ACCESSION NUMBER: 0001608743-17-000003 CONFORMED SUBMISSION TYPE: MA-I/A PUBLIC DOCUMENT COUNT: 1 FILED AS OF DATE: 20170123 FILER: COMPANY DATA: COMPANY CONFORMED NAME: Echo Financial Products LLC CENTRAL INDEX KEY: 0001608743 IRS NUMBER: 261132148 STATE OF INCORPORATION: PA FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: MA-I/A SEC ACT: 1934 Act SEC FILE NUMBER: 868-04282 FILM NUMBER: 17542886 BUSINESS ADDRESS: STREET 1: 200 NORTH WARNER ROAD STREET 2: SUITE 150 CITY: KING OF PRUSSIA STATE: PA ZIP: 19406 BUSINESS PHONE: 610-768-7733 MAIL ADDRESS: STREET 1: 200 NORTH WARNER ROAD STREET 2: SUITE 150 CITY: KING OF PRUSSIA STATE: PA ZIP: 19406 MA-I/A 1 primary_doc.xml MA-I/A 0001608743 XXXXXXXX Christopher Monaghan 610-768-7733 chris@echo-fp.com N N Michael Warren Garner N 1 0001608743 Echo Financial Products LLC 09-20-2007 N Concurrent with Form MA LOCATED 09-20-2007 200 North Warner Road Suite 150 KING OF PRUSSIA PA 19406 09-2007 Echo Financial Products, LLC King of Prussia PA 19406 Y Y Principal 12-2002 09-2007 Investment Management Advisory Group Pottstown PA 19465 Y Y Vice President Y 01-2010 Tartarus Capital 630 Freedom Business Center 3rd Floor King of Prussia PA 19406 N N Tax lien purchaser Principal 8 Managerial 11-2013 Galene Ventures LLC 630 Freedom Business Center 3rd Floor King of Prussia PA 19406 N N Real estate Principal 8 Managerial N N N N N N N N N N N N N N Y Y Y Y N N N N N N N N N N N N N N N N N N N N N N N N N N N N N N N N 01-23-2017 Christopher Monaghan Principal Applicant was engaged in transactions involving SLGS subscriptions made on behalf of issuers, each step of which was permissible, based on relevant federal regulations and examples. On 10/25/2013, Applicant received a letter from the Treasury Department instructing applicant to cease such transactions. Applicant was denied a hearing and given the right to respond only in written form, with no right to appeal within the Department of the Treasury. Applicant offered 7 mitigating factors in response to the allegations, including the fact that, in the absence of a definition of "cost-free option" in the regulations, Applicant reasonably relied on examples in the Treasury regulation. As a result of the Final Agency Decision from the Treasury, Applicant will not be able to act as an agent for issuers, however issuers can, and have traditionally, used other parties to subscribe. Since the last filing of Forms MA and MA-I, the Department of Justice Civil Division ("DOJ") notified Michael Garner and Christopher Monaghan that DOJ was investigating possible violations of federal civil statutes and regulations in connection with the business interests outside of Echo Financial Products, LLC described above. Mr. Garner and Mr. Monaghan are cooperating fully with the DOJ and expect to be fully exonerated. N 6D(1)(e) 6D(1)(b) 6D(1)(c) 6D(1)(d) Department of the Treasury Richard L. Gregg, Fiscal Assistant Secretary, Deciding Official Suspension 10-25-2013 Treasury SLGS Working Group Report and Recommendation 0 Department of the Treasury Washington DC 20227 Enhanced Financial Solutions LLC Debt - Government Alleged violations of 31 CFR 344.2(f), which makes it impermissible to use the SLGS program to create a cost-free option. Treasury alleged that Applicants former employer, Enhanced Financial Solutions LLC's, use of its Yield Enhancement Program created impermissible cost-free interest rate options under three scenarios: (a) purchasing a long-term SLGS security and redeeming the security before maturity in order to capture premium; (b) changing the maturity and associated interest rate on SLGS already subscribed for to take advantage of interest rate movements; and (c) changing the SLGS subscription amount in response to movement in interest rates in order to maximize redemption premiums or minimize potential losses. Treasury alleged that taken as a whole, the actions taken to gain premiums and avoid losses did not comply with the purpose of the SLGS program which was to assist state and local government issuers of tax-exempt bonds with complying with the arbitrage rules under the tax regulations. No appeal to any official within the Department of the Treasury was permitted. Suspension 06-06-2014 Ineligibility to subscribe for SLGS securities; however, clients are still permitted to subscribe directly of indirectly (through other transaction participants such as Trustee) for SLGS if evidenced to be the most cost-effective solution for escrow securities. Decision Order The Decision was titled "Final Agency Decision" though used the term "Order" with respect to the actions taken therein. N 06-06-2014