UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934
DATE OF REPORT (DATE OF EARLIEST EVENT REPORTED): September 29, 2006
FIRST MONTAUK FINANCIAL CORP.
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(Exact name of registrant as specified in its charter)
COMMISSION FILE NUMBER: 0-6729
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NEW JERSEY 22-1737915
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(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
Parkway 109 Office Center
328 Newman Springs Road
Red Bank, NJ 07701
(Address and zip code of principal executive offices)
(732) 842-4700
(Registrant's telephone number, including area code)
CHECK THE APPROPRIATE BOX BELOW IF THE FORM 8-K FILING IS INTENDED TO
SIMULTANEOUSLY SATISFY THE FILING OBLIGATION OF THE REGISTRANT UNDER ANY OF THE
FOLLOWING PROVISIONS:
|_| Written communications pursuant to Rule 425 under the Securities Act
(17 CFR 230.425)
|_| Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17
CFR 240.14a-12)
|_| Pre-commencement communications pursuant to Rule 14d-2(b) under the
Exchange Act (17 CFR 240.14d-2(b))
|_| Pre-commencement communications pursuant to Rule 13e-4(c) under the
Exchange Act (17 CFR 240.13e-4(c))
Item 1.01 Entry into a Material Definitive Agreement
To the extent required by Item 1.01 of Form 8-K, the information
contained in Item 8.01 of this Current Report is incorporated by
reference in this Item 1.01.
Item 5.02 Departure of Directors or Certain Officers; Election of
Directors; Appointment of Certain Officers; Compensatory
Arrangements of Certain Officers
To the extent required by Item 5.02 of Form 8-K, the information
contained in Item 8.01 of this Current Report is incorporated by
reference in this Item 5.02.
Item 8.01 Other Events
On September 29, 2006, First Montauk Securities Corp. ("FMSC"), a
registered broker-dealer and the principal subsidiary of First
Montauk Financial Corp. ("Registrant") executed a consent order
("Consent Order") with the New Jersey Bureau of Securities
("Bureau") relating to an investigation into the sale by FMSC of
certain high yield bonds to FMSC's clients from 1998 to 2001, and
the subsequent resale of those securities to other customers in
2001. The Registrant previously reported in its Form 10-Q for the
quarter ended June 30, 2006 that it was in the final stages of
resolving this investigation.
Pursuant to the Consent Order, FMSC is required, within 30 business
days from the date of entry of the Consent Order, to retain an
independent consultant, not objectionable to the Bureau, to review
FMSC's business practices and procedures for branch offices
supervision, suitability standards, and monitoring of agent sales
activities. The independent consultant will confer with FMSC and
the Bureau to identify areas af concern.
The Consent Order also provides that, within 120 business days from
the date FMSC retains the independent consultant, FMSC will require
the independent consultant to furnish a report to FMSC which report
will be reviewable by the Bureau. The purpose of the report is to
address the scope and subject matter specifications agreed to
pursuant to the Consent Order. FMSC is thereafter required within
30 business days from the date of the independent consultant's
report to submit to the Bureau a report outlining all changes it
intends to make to its business practices and procedures for branch
office supervision, suitability standards, and monitoring of agent
sales activities in response to the independent consultant's
report, including a timeline for implementation that is not
objectionable to the Bureau.
The Consent Order also requires FMSC to pay a civil monetary
penalty of $475,000 upon entry of the Consent Order.
Herbert Kurinsky and William J. Kurinsky, two directors of the
Registrant, have also agreed with the Bureau to resign from all
board, managerial or supervisory positions at the Registrant or any
of its successors or affiliates no later than 30 business days from
September 29, 2006. Currently, both Herbert Kurinsky and William J.
Kurinsky are each a member of the board of directors of the
Registrant.
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934,
the Registrant has duly caused this report on Form 8-K to be signed on its
behalf by the undersigned hereunto duly authorized.
FIRST MONTAUK FINANCIAL CORP.
By: /s/ Victor K. Kurylak
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Name: Victor K. Kurylak
Title: President and
Chief Executive Officer
Date: October 4, 2006