Compliance
L.J. Hart & Company’s Business Continuity Plan Summary
L.J. Hart & Company has developed a Business Continuity Plan on how we will respond to events that significantly disrupt our business. Since the timing and impact of disasters and disruptions is unpredictable, we will have to be flexible in responding to actual events as they occur. With that in mind, we are providing you with this information on our business continuity plan.
Contacting Us – If after a significant business disruption you cannot contact us as you usually do at (800) 264-4477 or (636) 537-9939, you should call First Banker’s Banc Securities, Inc. (314) 726-2880. It is our intention to set up temporary offices at their location 1714 Deer Tracks Trail, Suite 110, St. Louis, Missouri 63131 in case of a disaster to our location. If you cannot access us through either of those means, you should contact our clearing firm, Pershing, at (201) 413-2627 for instructions on how it may assist you in accessing your account with us.
Our Business Continuity Plan – We plan to quickly recover and resume business operations after a significant business disruption and respond by safeguarding our employees and property, making a financial and operational assessment, protecting the firm’s books and records, and allowing our customers to transact business. In short, our business continuity plan is designed to permit our firm to resume operations as quickly as possible, given the scope and severity of the significant business disruption.
Our business continuity plan addresses: data back up and recovery; all mission critical systems; financial and operational assessments; alternative communications with customers, employees, and regulators; alternate physical location of employees; critical supplier, contractor, bank and counter-party impact; regulatory reporting; and assuring our customers prompt access to their funds and securities if we are unable to continue our business.
Our clearing firm, Pershing, backs up our important records in a geographically separate area. While every emergency situation poses unique problems based on external factors, such as time of day and the severity of the disruption, we have been advised by our clearing firm that its objective is to restore its own operations and be able to complete existing transactions and accept new transactions and payments within the same day. Your orders and requests for funds and securities could be briefly delayed during this recovery period.
Varying Disruptions – Significant business disruptions can vary in their scope, such as only our firm, the building housing our firm, the business district where our firm is located, the city where we are located, or the whole region. Within each of these areas, the severity of the disruption can also vary from minimal to severe. In a disruption to only our firm or a building housing our firm, we will transfer our operations to a local site when needed and expect to recover and resume business within two days. In a disruption affecting our business district, city, or region, we will transfer our operations to a site outside of the affected area, and recover and resume business within one week. In either situation, we plan to continue in business, and transfer operations to our clearing firm if necessary. If the significant business disruption is so severe that it prevents us from remaining in business, we will assure our customer’s prompt access to their funds and securities.
For more information – If you have questions about our business continuity planning, you can contact us at (800) 264-4477.
L.J. Hart & Company Customer Relationship Summary
1. Introduction
L.J. Hart & Company is registered with the Securities & Exchange Commission, Financial Industry Regulatory Authority, and Securities Investor Protection Corporation as a broker-dealer primarily engaged in the business of underwriting municipal securities for school districts, counties, cities, towns and special districts. We also operate as a broker-dealer of municipal securities. Brokerage and investment advisory services and fees differ; it is important for you to understand the differences. Free and simple tools are available to research firms and financial professionals at: www.investor.gov/CRS which also provides educational materials about broker-dealers, investment advisers, and investing.
2. What Investment Services And Advice Can You Provide Me?
The brokerage services we provide include buying and selling municipal securities and recommending investments to retail investors. You may select investments or we may recommend investments for your account, but the ultimate investment decision for your investment strategy and the purchase or sale of investments will be yours.
We do not offer you additional services to assist you in developing and executing your investment strategy. We do not monitor your portfolio or investments on an ongoing basis.
We offer a limited selection of municipal securities for retail customers. Another firm might offer a wider range of choices, some of which may have lower costs.
You may find further information here.
Questions to ask:
- Given my financial situation, should I choose a brokerage service? Why or why not?
- How will you choose investments to recommend to me?
- What is your relevant experience, including your licenses, education and other qualifications? What do these qualifications mean?
3. Fees, Costs, Conflicts, And Standard Of Conduct
3A. What Fees Will I Pay?
You will pay fees and costs whether you make or lose money on your investments. Fees and costs will reduce any amount of money you make on your investments over time. Please make sure you understand what fees and costs you are paying.
The fee you pay is based on each specific transaction and not on the value of your account.
With the purchase or sale of municipal securities, the fee may be part of the price you pay for the investment (called a mark-up or mark-down). Our mark-ups and mark-downs range from 0-5% of the value of each trade.
We may charge you additional fees such as custodian fees, account maintenance fees, and account inactivity fees.
Our fees vary and are negotiable. The amount you pay will depend, for example, on how much you buy or sell, what type of investment you buy or sell, and what kind of account you have with us.
The more transactions in your account, the more fees we will charge you. We may therefore have an incentive to encourage you to engage in transactions.
Questions to ask:
- Help me understand how these fees and costs might affect my investments.
- If I give you $10,000 to invest, how much will go to fees and costs, and how much will be invested for me?
3B. What are your legal obligations to me when providing recommendations? How else does your firm make money and what conflicts of interest do you have?
When we provide you with a recommendation, we have to act in your best interest and not put our interest ahead of yours. At the same time, the way we make money creates some conflicts with your interests. You should understand and ask us about these conflicts because they can affect the recommendations we provide you. Here are some examples to help you understand what this means.
We typically only sell municipal securities that our firm is underwriting. We make money on sales of those new issues which may be similar to other municipal securities which may cost less.
We may buy and sell your investment through our own accounts (called “acting as principal”) and we can earn a profit on these trades.
Questions to ask:
- How might your conflicts of interest affect me, and how will you address them?
3C. How do your financial professionals make money?
Our financial professionals are compensated in cash based on the overall performance of the firm. L.J. Hart & Company mainly earns revenue from fees paid by municipal issuers arising from new security offerings in which we act as an underwriter. As such, the firm has an incentive for you to invest assets in our underwritings over those underwritten by third-party underwriters. The firm also earns a nominal amount of revenue from providing financial advisory services which are also paid by municipal issuers.
4. Do You Or Your Financial Professionals Have Legal Or Disciplinary History?
Yes. Visit www.investor.gov/CRS for a free and simple search tool to research us and our financial professionals. For additional information about our brokers and services, visit https://brokercheck.finra.org/ and our web site www.ljhartco.com.
Questions to ask:
- As a financial professional, do you have any disciplinary history? For what type of conduct?
5. Additional Information
You may find additional information about our brokerage services at our website www.ljhartco.com.
You may request a copy of the Form CRS Relationship Summary by contacting your investment professional. You may also call 1-800-264-4477 for a copy or to request up-to-date information.
Questions to ask:
- Who is the primary contact person for my account?
- Is he or she a registered representative of a broker-dealer?
- If I have concerns about how this person is treating me, who can I talk to?
Investor and Municipal Advisory Client Education and Protection (MSRB Rule G-10)
L.J. Hart & Company, member FINRA and SIPC and registered with the SEC and MSRB, is a wholly owned subsidiary of Commerce Bank, and is a municipal advisor and broker-dealer of municipal securities. Offerings may be distributed by Commerce Brokerage Services Inc. (member of FINRA and SIPC and registered with the SEC and MSRB ) and the Commerce Bank Capital Markets Group (affiliates of L.J. Hart & Company). L.J. Hart & Company will remit a portion of the Underwriting Fee (concession) to Affiliates as a fee for distributed bonds. Investments in securities are NOT FDIC Insured; NOT Bank-Guaranteed and May Lose Value. A municipal advisory client brochure that describes the protections available under MSRB rules and instructions on how to file a complaint can be found on the MSRB website at www.msrb.org.