Businessweek

financial needs and advising them on the most advantageous means of raising capital. The company’s municipal finance professionals assist public bodies in originating, syndicating and distributing securities of municipalities and political subdivisions. The company’s corporate finance professionals arrange and evaluate mergers and acquisitions, conduct private placements and participate in public offerings of securities with institutional and individual investors, assist clients with raising capital and provide other consulting and advisory services. Southwest Securities maintains a corporate finance branch office in Dallas, Texas and municipal finance branch offices in Austin, Dallas, Longview, Allen and San Antonio, Texas; Irvine and Cardiff, California; Hillsdale, New York; Albuquerque, New Mexico; Charlotte, North Carolina; Lexington, Kentucky; Columbia, South Carolina and Monroe, Louisiana. Fixed Income Sales and Equity Trading: The company’s fixed income sales and trading group specializes in trading and underwriting U.S. government and agency bonds, corporate bonds, municipal bonds, mortgage-backed, asset-backed and commercial mortgage-backed securities and structured products. The clients of its fixed income group include corporations, insurance companies, banks, mutual funds, money managers and other institutions. BANKING The company offers traditional banking products and services through 12 full-service banking centers with 10 banking centers located in Texas, 2 located in Arlington and 1 located in each of Austin, Benbrook, Dallas, El Paso, Granbury, Houston, Southlake and Waxahachie, and 2 located in New Mexico with 1 each located in Albuquerque and Ruidoso. The company specializes in two primary areas: business banking and mortgage purchase. The company’s focus in business banking includes small business lending. It offers an array of deposit products, including checking, savings, money market and certificates of deposit. The company provides commercial and commercial real estate loans, as well as residential mortgage loans, primarily in Texas and New Mexico. The company’s mortgage purchase division purchases participations and sub-participations in newly originated residential loans (1-4 family), from various mortgage bankers nationwide. Regulations The company is under the jurisdiction of the Securities and Exchange Commission (SEC) and is subject to the disclosure and regulatory requirements of the Securities Act of 1933, as amended, and the Securities Exchange Act of 1934, as amended (the ‘Exchange Act’), as administered by the SEC. Also, under Section 404 of the Sarbanes-Oxley Act, the company is required to assess the effectiveness of its internal controls over financial reporting and to obtain an opinion from independent auditors regarding the effectiveness of internal controls over financial reporting. The company is regulated under the Savings and Loan Holding Company Act, as amended (the ‘SLHC Act’), and its subsidiaries that are not functionally regulated are subject to inspection, examination and supervision by the Federal Reserve Board. The Bank was regulated by the Office of Thrift Supervision (OTS). As of July 21, 2011, the Federal Reserve Board (FRB) began supervising and regulating SWS Group and SWS Banc Holdings, Inc. (SWS Banc). Regulation of the Securities Business: The company’s U.S. broker/dealer subsidiaries are registered as such with the SEC and FINRA. The company’s broker/dealer subsidiaries must also comply with the USA PATRIOT Act and other rules and regulations designed to fight international money laundering and to block terrorist access to the U.S. financial system. Certain activities of the company’s subsidiaries are regulated by the Commodity Futures Trading Commission and various commodity exchanges. The company’s futures business is also regulated by the National Futures Association, a registered futures association. Customers The company, as of June 29, 2012, provided full-service securities brokerage to approximately 35,000 client accounts and clearing services to approximately 130,000 additional client accounts. It also provided dep