RBC Capital Markets Fined and Reprimanded by Texas Securities Board

TRAVIS J. ILES SECURITIES COMMI SSIONER CRISTI RAMÓN OCHOA DEPUTY SECURITIES COMMI SSIONER Mail: P.O. B OX 1316 7 AUSTIN, TEXAS 78711 - 3167 Phone: (512) 30 5 - 83 00 Facsimil e: (51 2) 305 - 8310 Texas S tate Securities Board 208 E. 1 0th Str eet, 5t h Floo r Austin, Texas 78701 - 2407 www.ssb.texas. gov E. WALLY KINNEY CHAIR ROBERT BELT MEMBER MELISSA TYROCH MEMBER EJIKE E. OKPA II MEMBER DAVID B. M ONTGOME RY MEMBER IN THE MATTE R OF THE DEALER § REGISTRATION OF § Order No. LID - 25 - CAF - 03 RBC CAPITAL M ARK ETS, LLC § I. DISCIPLI NARY ORDER This C onsent Order (the “ Order ”) i s enter ed into by t he Tex as St ate Secur ities B oar d (“TSSB”) w ith RBC Ca pita l Market s, LLC (“ R esponde nt ”) w ith res pect to a co ordinat ed investi gation led by seven jurisdiction s, includ in g Alab ama, Io wa, Mass achusett s, Miss ouri, Mont ana, Texas, and Was hingto n (the “Mu lti - state Gr oup”) int o whethe r R esponden t engaged in acts or pract ices that vi olated the Texas Securities Ac t, Tex. Gov’t Cod e §§ 4001. 001 - 4008.105 (the “ Texas S ecuri ties Ac t”), and the rules and regulati ons pr omulgat ed t hereu nder, T exas State Securit ies B oard R ules, 7 Tex. Admin. Code §§ 1 01.1 - 139.27 (the “ Board R ules”). As the resul t of the investi gation, the Mult i - s tate Gr oup c onclud ed tha t Res ponde nt charge d unreason able commiss ion s in exces s of 5% of t he princ ipa l amount o n certai n small pri ncip al equi ty tr ansactio ns. Na tionwi de, R espo ndent c harged c o mmissio ns in excess of 5% of t he pri ncipal amount on appr oxi mately 89,9 00 equit y tr ansacti ons over a five - year perio d total ing ap proxim ately $ 3,400, 000.00. This Or der c oncludes t he TSSB’ s inv estig atio n and any civ il or a dmini strati ve act ion th at could be co mmenced pur suant t o the Act f or t he sp ecifi c viol ations res olved herei n, s olely as it rel ates to R espon dent. T his inc lud es any inv estig ations and any civil or adminis trativ e acti ons that coul d be comme nced rel ating to the char ging of mini mum commiss ions i n connec tion w ith tr ades i n any s ecuri ty or produc t type, not li mited to eq uity securi ties. N othin g in t his a gree ment s hall be cons trued to cr eate, wai ve, r el ease, or limi t any priv ate ri ght o f acti on, incl udin g any cl aim s retai l cus tomers h av e or may have o n an indivi dual or class b asis und er stat e or feder al l aws agains t any pers on or enti ty. Responden t neither admit s nor den ies the facts set forth in Sec tion V and the viol ati ons of law s et for th in Secti on V I bel ow, and cons ent s to t he entr y of this Order by th e TSSB, thereby settlin g the abov e - capti oned matt er with prej udic e.

Disciplina ry Order/ RBC Capital M arkets, LL C / Page 2 II. Jurisdic tion 1. The TSS B has j uris diction ov er mat ters r elatin g to secur ities purs uant to the Tex as Securiti es Act a nd the Administr ativ e Proce dure Act, T ex. Gov ’t C ode Ann. §§ 2001.00 1 - 2001. 903. 2. This Order is ent ered in ac cordanc e wi th § 4007. 105(a) (13)(B) and § 4007.10 6(a)(3) of th e T exas Sec uri ties Act and § 115.1 0 of t he Boar d Rules. Responden t el ects t o per manentl y wai ve an y right s to a heari ng a nd any other proced ural ri ghts gr anted by the T exas Secur ities Act or the Admini strativ e Proced ure Act. 3. The ac ts and practi ces that are the subject of TSSB’s inves tigat ion o ccurr ed while Responden t was re gister ed with the S ecurit ies Co mmissio ner of Texas (“Secur ities Commiss ioner ”) as a dealer in Tex as. III. RELEVANT TIME PERIOD 4. Except as ot herwis e expres sly st ated, the conduct d escr ibed he rein occ urred during t he tim e per iod of May 16, 2020 to M ay 16, 20 25 (the “R elevan t Tim e Perio d”). IV. RESPONDE NT 5. Respon dent is a deal er r egist ered i n Tex as wi th a main addres s o f 3 Worl d Financi al Cent er, 200 Ves ey Stre et, New Yo rk, N ew York 10281. Respondent is identifi ed by Fi nanci al I ndustry Regul atory Aut hority (“FIN RA”) CRD No. 31 194. V. STA TEM EN T OF FAC TS Respondent ’s Mi nimum Commission Practices for Equity Transactions Faile d to Ensure Transa ction s Were Ex ecuted at a F air an d Reaso nab le Price 6. D uri ng the Rel evan t Time Period, Res pondent charged unreas onabl e commissions in exc es s of fiv e per cent (5%) of the princ ipal amount to r etail brokerag e cust omers on cert ain eq uity tr ansa ctions. 7. Respon dent charged a mini mum fi xed c ommis sion on ex cha nge tr aded equi ty transacti ons. 8. For all equi ty tr ansact ions ex ecut ed duri ng th e Releva nt Tim e Per iod, R espond ent general ly char ged r etai l broker age c ustom ers be tween 0.5% to 4.0 % of t he princi pal amo unt of t he tr ade. 9. Respon dent generally charge d a mini mum commissi on of ninet y - five dol lars ($95.00) for equity buy and sell trans actio ns (the “M inim um Equi ty C ommissi on ”). 10. Certai n small equit y sel l trans actions res ulte d in a mini mum c ommis sion bel ow ninety - fi ve dollar s ($95.00).

Disciplina ry Order/ RBC Capital M arkets, LL C / Page 3 11. Responden t ’s polic ies and proc edures note that i ts co mmissi on sched ule wa s designed to h ave the majorit y of e quity tr ans actions r esul t in a c ommis sion of less than fiv e percent (5%) of th e princi pal a mount of the tr ansact ion. 12. However, Respond ent ’ s polic ies and pr ocedur es ex empted tr ansac tio ns wher e the commiss ion exce eded five p ercent (5%) of the p rinc ipal am oun t if t he comm iss ion charge d was less th an the Mi nimu m Equity Com mission. 13. The Boar d Rul es pr ohibit s Resp ondent from charging unr easona ble co mmissi ons for serv ices p erform ed. 14. FINRA Rule 2 121 Su pplem entar y Materi al . 01 (R ule 212 1.01) provi des a g uideli ne of five perce nt for d eter mining whether a co mmissio n is u nfair or unreas onable. However, the “ 5% Pol icy” is a guid e, not a r ule. A c ommiss ion p attern of fi ve percent or ev en less may be consid ered un fai r or unr eason able. 15. In Texas, Resp onden t execu ted 5, 264 eq uity transacti ons w hich include d an unreas onable commis sion f or s ervi ces per for med (i.e. in exc ess of 5% o f the princi pal trad e amount) total ing $ 195, 264.85. 16. Numerous equity tr ansac tions exec uted by Res pondent inc lude d a c omm issi on well i n excess of 5% of the princi pal val ue of t he tra nsactio n. Respondent Did Not Rea sonably Supervise Tra nsactions Which Applied the Minimum Equity Commiss ion 17. Responden t di d not r e asonably super vise cer tain tra nsactio ns, whi ch i ncluded a Minimum Equity Commis sion ch arge, to e nsure that Responde nt char ged its customers a reasonable commission. 18. Responden t ’s tra de r eview syste m was not set t o flag tra nsactio ns where the commiss ion exc eeded 5% of the pr incipal amount i f the co mmis sion c harged was less tha n the M inimu m Equit y Com missi on. 19. Responden t did not have suffici ent surveill ance systems in place t o supe rvis e small pri ncip al equi ty tr ansacti ons wh ere t he Mi nimum Eq uity Co mmiss ion was in excess of 5%. 20. Responden t ’s survei llanc e sys tem ex clud ed trans acti ons whi ch ap plied t he Minimum E quity Commissio n from its review s. 21. As a result, Res pond ent faile d to ad equat ely s upervi se s mall p rinc ipal e quity transacti ons w here th e M inimum E quity C ommis sion was in exc ess of 5%.

Disciplina ry Order/ RBC Capital M arkets, LL C / Page 4 Respondent Self - Report ed to FINRA and Remed iated Its S ystem s 22. On March 2 3, 2023, R esponden t filed a Form 4530 discl osure with FINRA volunt arily reporti ng t hat it had ident ified cer tain eq uity tr ansact ion s where the Minimum Equity Co mmiss ion had b een ch arged r esulti ng in co mmissio ns that exceeded 5% of the princi pal amount. 23. Responden t updated i ts c ommissi on sche dul e and adj usted t he par ame ters o f its trade revi ew sys tem to f lag any c ommissi ons that excee d 5% of the pr incipa l amount. Respon dent h as also update d its poli cies an d proc edures accor dingly. VI. VIOLATIONS OF LA W 24. Sections 115.10(a) of t he Boar d Rules require s dealers to establish, maintain, and enforce a syste m to s upervis e the acti vitie s of it s agents t hat i s reason ably designed to ac hiev e compli ance wi th t he Te xas Sec urit ies Act, the Board Rules, and all appli cable s ecur ities l aws and r egulat ions. 25. Responden t ’ s act s an d practic es, as des cribed a bove, c onsti tute a vi olation of § 115.10 of the Boar d Rules. 26. Pursua nt to § 4007. 105(a) (13)(B) of t he T exas S ecuriti es Act, R esponden t ’s violati ons of § 115.10 of the B oard R ules co nst itute a b asis f or the issuanc e of an Order r eprimandi ng Re spon dent. 27. Pursua nt to § 400 7.10 6(a)(3) of t he Tex as Se curi ties Act, Res ponde nt ’s v iolati ons of § 115.10 of the Boar d Rules also co nstitut e a basis f or the asse ssment of an adminis trativ e fine. VII. REPRESE NTATIONS AND UNDERTAKI NGS Responden t in ful l set tlement o f thes e matt ers neither ad mits nor deni es the St ateme nt of Facts as set forth in Section V, and neither admi ts nor denies the Viol ations of Law set out in Sec tion VI, mak es the follow ing r epres entations, an d agrees to th e undert akings herein as par t of the Offer: IT IS HEREBY ORDERED: A. Respon dent agrees t o perma nently cease and desist from con duct des cribe d herein in viol ation of the T exas Sec uriti es Act and Board Rul es in Texa s; B. Respon dent is repri mande d by the TSSB; C. Respondent agr ees to prov ide r estituti on i n an a mount of no l ess tha n $ 195,26 4.85 providi ng the amount of the c ommi ssion on cer tain s mall pr incipal equit y transacti ons tha t exce eded fiv e percen t (5%) of the pr incipal tr ade amo unt d urin g the Relev ant Tim e Peri od to the aff ecte d Texas customer s, plus interes t in t he amount of 6% compou nded a nnuall y fro m the date of the trans action to the end of the Rel evant T ime Peri od. Responden t agrees to provi de restitut ion w ithi n one hundred and tw enty (120) day s of execu ti on of the O rder:

Disciplina ry Order/ RBC Capital M arkets, LL C / Page 5 i. Respondent agrees that restit utio n shal l be i n th e form of a doll ar c redit t o current c usto mer acc ounts, or a bank c heck for all for mer cus to mers or current c ustom ers who are enti tled to r estit uti on as a resul t of tr ansacti ons involvi ng an in divi dual r etireme nt acco unt; ii. Respondent agre es to pr ovide a not ice of r est itution t o custo mers on terms not unaccept able to the Multi - State G roup ("Noti ce”). The Notic e s hall be sent pr ior to or wi th the dis tributi on of any r esti tution. Wi thin f orty - five (45) days of t he date of thi s Order, Respondent shall provi de the TSSB wit h a list of all Texas res id ents for w hom Res ponde nt rec eives a N otic e as returne d to send er ("Undeli verable Texas Res idents "). To t he e xtent t he TSSB has acc ess to di ffer ent ad dress i nform ation, R esponde nt sha ll mail a second N otic e to each Undeliverable Texas R esiden t wit hin t hirty (30) days of the TSSB pr ovidi ng such di ffer ent a ddress; and iii. Respondent agrees to, wi thin for ty - five (45) days of the date of t his Order, submit t o the TSSB a report detai ling the r esti tution pai d purs uant to the Order, w hich s hall i nclude: i. Identificati on of all res tit ution pay ments; and ii. Dates, amou nts, a nd m ethods of t he tr ansfer of funds for all restit ution pay ments. D. Respondent agrees to pay an admini stra tive fine i n the amount of $25,000.00 t o Texas w ithin fifte en (15) days fol lowi ng the date of entry of t his O rder. Pay ment shall be: (1) mad e by c heck; (2) made pay abl e to the “ State of Tex as,” and (3) mailed by FedEx or U PS to 208 East 10 th Stre et, Roo m 610, Austi n, Texas 78 701 - 2407; E. Respon dent agrees t hat a pers on not unacc eptabl e to the Mul ti - St ate Gro up has certif ied in writin g to the TSSB that Res ponde nt has undert aken t he f ollowi ng; i. Updated its com mission s ched ule to refl ect th at c ommissi ons o n equity transacti ons d o not exceed 5% of the pri ncip al trade amo unt; ii. Adjusted t he para mete rs of it s tra d ing system and corr espondi ng c ontrol s to flag a ny co mmiss ions that exce ed 5% o f the pr incipal amou nt; and iii. Amended i ts poli cies and pr ocedur es t o ref lect a nd i ncor porate t hes e changes. F. Respon dent agrees not to seek or acc ept, dir ectl y or in direc tly, r eim burse ment or indemnif icati on, i ncludi ng, but not l imited to, any p ayments made pursuant to any insuranc e policy, wi th regard to any amount t hat Respon dent shall pay pursu ant to this Order; G. If R espon dent is the su bject of a voluntary or invol untary bankru ptcy pet itio n under Title 11 of the Unit ed St ates C ode wi thin thr ee hun dred s ixty - fi ve (3 65) day s of the

Disciplina ry Order/ RBC Capital M arkets, LL C / Page 6 entry of this Or der, R espon dent agre es to pr ovide w ritten n otice to the TSSB within five (5) days of the dat e of the petit ion; H. Respondent agr ees th at any fin e, penal ty, a nd/or money tha t Res pondent shall pay in acc ordanc e with this Or der is i ntende d by R esponde nt and t he TSSB t o be a conte mporane ous ex chan ge for n ew val ue given t o Respo ndent pursu ant t o 11 U.S.C. § 547(c)(1) (A) and i s, i n fact, a su bstanti ally c onte mporan eous exc hange pursua nt to 1 1 U.S.C. § 54 7(c) (1)(B); I. Responden t agrees th at, u pon th e issu ance o f an Or der by t he TSSB that contai ns the terms as set for th abov e, if Respon dent fails to co mply wi th any of the t erms set fort h in th e Order, the TSSB may i nstitu te an acti on t o have thi s Or der declar ed null an d void. Additi onall y, after a fai r hearin g and the i ssuanc e of a n order fi ndin g that R espon dent has not compli ed wi th th e Order, t he T SSB may move to hav e the Or der decl ared nul l and void, in w hole or i n part, a nd re - i nsti tute t he ass ociat ed procee ding tha t had b een bro ught a gains t Re spondent; and J. F or good ca use sh own, t he TSSB may extend any of t he proc edur al dates s et for th above. Respond ent shal l make any reques ts f or extensi ons o f the pr ocedur al dates set fort h above in wr iting t o the TSSB. VIII. WAIVER Responden t has waiv ed (a) R espond ent ’s ri ght to noti ce an d heari ng in this matter; (b) Responden t ’s r ight to appear a nd pres ent evi dence in this matter; (c) Respon dent ’s right to app eal thi s Or der; a nd (d) all other pr ocedu ral r ights gr ante d to the Resp ondent by The Securiti es Act, Tex. G ov’t C ode §§ 4001. 001 - 4008.10 5 (“Tex as Sec urities Act”), and the Adminis trativ e Proc edure Ac t, Tex. Gov’ t Code A nn. §§ 2001. 001 - 2001. 903. IX. NO DISQUALI FICATION This Or der waiv es any di squalif icatio n in th e Texas Sec uriti es Ac t and Board R ules, includi ng any disqual ifi cation fro m relyi ng upo n the r egis tratio n exem ptions or sa fe harb or provis ions to whi ch Res pondent may be subj ect. T his Order is not i nten ded to be a f inal order b ased u pon vi olati ons of the T exa s Secur ities Act t hat pr ohibi t fra udulent, manipulat ive, or decep tive c onduct. T his O rder is not int ended t o for m the basi s of any disquali ficati ons under Section 3(a)(39) of the Secur ities Exchange Act of 193 4; or Rul es 504(b)(3) and 50 6(d)(1) of Regul ation D, Rule 262(a) of R egulati on A and Rul e 503(a) of Regulatio n C F under t he Secur ities Act of 1933. T his Order is not intended to f orm the basis of disq ualifi cation un der t he FI NRA rul es pr ohibi ting c ontinua nce in member ship absent t he fi ling o f a MC - 400A applic ation or disquali ficati on under SRO rules pr ohibiti ng contin uance i n me mber ship. Thi s Or der i s not i ntended to form a basi s of a dis quali fica tion under 204(a)(2) of the Unif orm Secur ities Ac t of 195 6 or Section 4 12(d) of the U nifor m Securiti es Act of 200 2. Exc ept in an act ion by the T SSB to enfor ce t he obli gations of this Order, any acts perfor med or docu ments ex ecute d in fur thera nce of thi s Ord er: (a) may not be de emed or used as an admis sion of, or ev idence of, the v al idity of any all eged wrongdoi ng, liabi lity, or l ack of any w rongdoi ng or l iabili ty; or (b) may not be dee med or used as an admissi on of; or evid ence of, any such all eged fault or omissi on of Responde nt in any c ivil, crimi nal, ar bitr ation, or admi nistrat ive proce edin g in any cour t, admini strativ e agency, or trib unal.

Disciplina ry Order/ RBC Capital M arkets, LL C / Page 7 SIGNED A ND ENTERED BY T HE S ECURITIES CO MMISSIONER this 19th d ay of D ecember, 202 5. ___ ___ ___ __ ___ ____ ___ TRAVIS J. ILES Securit ies Commissione r