H.D. Vest Investment Securities, a Securities and Exchange Commission-registered broker-dealer, agreed to pay a fine of US $225,000 to settle charges by the SEC related to the firm’s alleged failure to supervise salespersons who defrauded customers. According to the SEC, HD Vest conducted its business through over 4,500 independent contractor salespersons located in branch offices throughout the United States, the vast majority of whom operated tax businesses utilizing outside business entities. Notwithstanding, HD Vest had no policies and procedures to monitor its salespersons outside businesses. As a result, claimed the SEC, since at least December 2007, an unspecified number of HD Vest salespersons transferred funds from customer accounts or had their customers write investment-related checks to their outside businesses rather than to HD Vest, and subsequently used the funds for personal purposes. HD Vest was also charged with failing, as required by law, to retain all electronic communications with the public, and to set aside adequate funds in a special reserve account for the exclusive benefit of customers. In addition to a fine, HD Vest was required to retain an independent compliance consultant to enhance its supervisory controls. In accepting HD Vest's offer of settlement, the SEC acknowledged the firm's voluntary efforts to improve its AML supervisory systems.