WILSON-DAVIS & CO., INC.BrokerCheck Report WILSON-DAVIS & CO., INC. Section Title Report Summary...

BrokerCheck Report

WILSON-DAVIS & CO., INC.

Section Title

Report Summary

Firm History

CRD# 3777

1

8

Firm Profile 2 - 7

Page(s)

Firm Operations 9 - 14

Disclosure Events 15

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CRD# 3777

SEC# 8-14299

Main Office Location

236 SOUTH MAIN STREETSALT LAKE CITY, UT 84101-2104Regulated by FINRA Denver Office

Mailing Address

P.O. BOX 11587SALT LAKE CITY, UT 84147-0587

Business Telephone Number

801-532-1313

Report Summary for this Firm

This report summary provides an overview of the brokerage firm. Additional information for this firm can be foundin the detailed report.

Disclosure Events

Brokerage firms are required to disclose certaincriminal matters, regulatory actions, civil judicialproceedings and financial matters in which the firm orone of its control affiliates has been involved.

Are there events disclosed about this firm? Yes

The following types of disclosures have beenreported:

Type Count

Regulatory Event 56

Arbitration 1

Firm Profile

This firm is classified as a corporation.

This firm was formed in Utah on 11/12/1968.

Its fiscal year ends in June.

Firm History

Information relating to the brokerage firm's historysuch as other business names and successions(e.g., mergers, acquisitions) can be found in thedetailed report.

Firm Operations

Is this brokerage firm currently suspended with anyregulator? No

This firm conducts 13 types of businesses.

This firm is not affiliated with any financial orinvestment institutions.

This firm has referral or financial arrangements withother brokers or dealers.

This firm is registered with:

• the SEC• 3 Self-Regulatory Organizations• 43 U.S. states and territories

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1©2020 FINRA. All rights reserved. Report about WILSON-DAVIS & CO., INC.


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This firm is classified as a corporation.

This firm was formed in Utah on 11/12/1968.

CRD#

This section provides the brokerage firm's full legal name, "Doing Business As" name, business and mailingaddresses, telephone number, and any alternate name by which the firm conducts business and where such name isused.

Firm Profile

Firm Names and Locations

Its fiscal year ends in June.


SEC#

3777

8-14299

Main Office Location

Mailing Address

Business Telephone Number

Doing business as WILSON-DAVIS & CO., INC.

801-532-1313

Regulated by FINRA Denver Office

236 SOUTH MAIN STREETSALT LAKE CITY, UT 84101-2104

P.O. BOX 11587SALT LAKE CITY, UT 84147-0587






This section provides information relating to all direct owners and executive officers of the brokerage firm.

Direct Owners and Executive Officers

Firm Profile

Position

Percentage of Ownership

Is this a public reportingcompany?

Position Start Date

Does this owner direct themanagement or policies ofthe firm?

DAVIS, LYLE WESLEY

CHAIRMAN OF THE BOARD- TREASURER

25% but less than 50%

No

Individual

07/2015

Yes

62352

Is this a domestic or foreignentity or an individual?

Legal Name & CRD# (if any):

Position



Position Start Date


GLEN HOLDINGS LLC

STOCKHOLDER


No

Domestic Entity

12/2017

No



Position


Position Start Date


PAUL DAVIS TRUST

STOCKHOLDER


Domestic Entity

07/2004

No








Direct Owners and Executive Officers (continued)

Firm Profile



No

No

Position



Position Start Date


THE BARKLEY PENSION TRUST/PROFIT SHARING PLAN

VICE PRESIDENT - HEAD TREADER - DIRECTOR


No

Domestic Entity

12/1995

Yes



Position



Position Start Date


SNOW, JAMES C JR

PRESIDENT/CHIEF COMPLIANCE OFFICER - DIRECTOR


No

Individual

09/2007

Yes

2761102



Position

BARKLEY, BYRON BERT

TRUSTEE

IndividualIs this a domestic or foreignentity or an individual?








Firm Profile

Position



Position Start Date


TRUSTEE

Less than 5%

No

12/1995

No

Position



Position Start Date


DAVIS, BRENT PAUL

TRUSTEE

Less than 5%

No

Individual

12/2018

No

1838944



Position



Position Start Date


WALKER, WILLIAM LESTER

VICE PRESIDENT - DIRECTOR-SECRETARY

Less than 5%

No

Individual

09/2007

Yes

1289565









Firm Profile


No






This section provides information relating to any indirect owners of the brokerage firm.

Indirect Owners

Firm Profile

GLENDALE SECURITIES INC.

STOCKHOLDER

GLEN HOLDINGS

75% or more

No

Domestic Entity

12/2017

No



Company through whichindirect ownership isestablished

Relationship to Direct Owner

Relationship Established









Firm History

This section provides information relating to any successions (e.g., mergers, acquisitions) involving the firm.

No information reported.






Firm Operations

RegistrationsThis section provides information about the regulators (Securities and Exchange Commission (SEC), self-regulatoryorganizations (SROs), and U.S. states and territories) with which the brokerage firm is currently registered andlicensed, the date the license became effective, and certain information about the firm's SEC registration.

This firm is currently registered with the SEC, 3 SROs and 43 U.S. states and territories.

SEC Registration Questions

This firm is registered with the SEC as:

A broker-dealer:

A broker-dealer and government securities broker or dealer:

A government securities broker or dealer only:

This firm has ceased activity as a government securities broker or dealer:

Yes

No

No

No

Federal Regulator Status Date Effective

SEC Approved 12/20/1968

Self-Regulatory Organization Status Date Effective

FINRA Approved 12/23/1968

NYSE Arca, Inc. Approved 04/16/2002

Nasdaq Stock Market Approved 07/12/2006






Firm Operations

Registrations (continued)

U.S. States &Territories

Status Date Effective

Alabama Approved 04/24/2018

Alaska Approved 04/24/1985

Arizona Approved 05/08/1990

Arkansas Approved 03/06/2018

California Approved 09/02/1983

Colorado Approved 08/19/1983

Connecticut Approved 11/01/2016

Florida Approved 10/04/1983

Georgia Approved 02/15/1985

Idaho Approved 12/15/1985

Illinois Approved 04/07/1989

Indiana Approved 12/09/1993

Iowa Approved 07/22/1986

Kansas Approved 03/25/1985

Kentucky Approved 06/03/1985

Louisiana Approved 03/15/1984

Maryland Approved 10/03/1990

Massachusetts Approved 06/28/2005

Michigan Approved 02/23/1994

Minnesota Approved 03/09/1989

Mississippi Approved 02/15/2018

Missouri Approved 12/23/1993

Montana Approved 10/26/1990

Nevada Approved 07/19/1983

New Jersey Approved 06/03/1991

New Mexico Approved 03/29/1985

New York Approved 04/30/1985

North Carolina Approved 04/06/2018

Ohio Approved 04/06/1987

Oklahoma Approved 07/15/1985

Oregon Approved 05/30/1986

Pennsylvania Approved 10/23/1985

Puerto Rico Approved 04/04/2018

U.S. States &Territories

Status Date Effective

Rhode Island Approved 02/15/2018

South Carolina Approved 10/21/1993

South Dakota Approved 03/10/2005

Tennessee Approved 09/24/2007

Texas Approved 10/02/1984

Utah Approved 04/21/1983

Virgin Islands Approved 04/16/2020

Washington Approved 06/02/1986

Wisconsin Approved 09/09/1992

Wyoming Approved 06/25/1980






Firm Operations

Types of BusinessThis section provides the types of business, including non-securities business, the brokerage firm is engaged in orexpects to be engaged in.

Other Types of Business

This firm does not effect transactions in commodities, commodity futures, or commodity options.This firm does not engage in other non-securities business.

Non-Securities Business Description:

This firm currently conducts 13 types of businesses.

Types of Business

Exchange member engaged in exchange commission business other than floor activities

Broker or dealer making inter-dealer markets in corporation securities over-the-counter

Broker or dealer retailing corporate equity securities over-the-counter

Underwriter or selling group participant (corporate securities other than mutual funds)

Mutual fund retailer

Municipal securities dealer

Broker or dealer selling variable life insurance or annuities

Solicitor of time deposits in a financial institution

Broker or dealer selling oil and gas interests

Broker or dealer selling tax shelters or limited partnerships in primary distributions

Trading securities for own account

Private placements of securities

Other - FINANCIAL ADVISORY SERVICES, MERGERS AND ACQUISITIONS, DEBTRESTRUCTURING/FINANCING.






Firm Operations

Clearing Arrangements

This firm does hold or maintain funds or securities or provide clearing services for other broker-dealer(s).

Introducing Arrangements

This firm does refer or introduce customers to other brokers and dealers.

Name: HILLTOP SECURITIES INC.

Business Address: 1201 ELSM STREET SUITE 3500DALLAS, TX 75270-2180

CRD #: 6220

Effective Date: 06/29/2006

Description: WILSON-DAVIS & CO. INC. INTRODUCES CUSTOMER ACCOUNTS ON AFULLY DISCLOSED BASIS.

Name: PERSHING ADVISOR SOLUTIONS LLC

Business Address: ONE PERSHING PLAZAJERSEY CITY, NJ 07399-0002

CRD #: 36671

Effective Date: 08/01/1979

Description: WILSON-DAVIS & CO., INC. INTRODUCES CUSTOMER ACCOUNTS ON AFULLY DISCLOSED BASIS, AS WELL AS AN OMNIBUS ACCOUNT.






Firm Operations

Industry Arrangements

This firm does not have books or records maintained by a third party.

This firm does not have accounts, funds, or securities maintained by a third party.

This firm does not have customer accounts, funds, or securities maintained by a third party.

This firm does not have individuals who control its management or policies through agreement.

This firm does not have individuals who wholly or partly finance the firm's business.

Control Persons/Financing






Firm Operations

Organization AffiliatesThis section provides information on control relationships the firm has with other firms in the securities, investmentadvisory, or banking business.

This firm is not, directly or indirectly:

· in control of· controlled by· or under common control withthe following partnerships, corporations, or other organizations engaged in the securities or investmentadvisory business.

This firm is not directly or indirectly, controlled by the following:

· bank holding company· national bank· state member bank of the Federal Reserve System· state non-member bank· savings bank or association· credit union· or foreign bank






Disclosure Events

All firms registered to sell securities or provide investment advice are required to disclose regulatory actions, criminal orcivil judicial proceedings, and certain financial matters in which the firm or one of its control affiliates has been involved.For your convenience, below is a matrix of the number and status of disclosure events involving this brokerage firm orone of its control affiliates. Further information regarding these events can be found in the subsequent pages of thisreport.

Final On AppealPending

Regulatory Event 2 53 1

Arbitration N/A 1 N/A






Disclosure Event Details

What you should know about reported disclosure events:

1. BrokerCheck provides details for any disclosure event that was reported in CRD. It also includessummary information regarding FINRA arbitration awards in cases where the brokerage firm wasnamed as a respondent.

2. Certain thresholds must be met before an event is reported to CRD, for example: o A law enforcement agency must file formal charges before a brokerage firm is required to disclose a

particular criminal event.3. Disclosure events in BrokerCheck reports come from different sources:

o Disclosure events for this brokerage firm were reported by the firm and/or regulators. When the firmand a regulator report information for the same event, both versions of the event will appear in theBrokerCheck report. The different versions will be separated by a solid line with the reporting sourcelabeled.

4. There are different statuses and dispositions for disclosure events: o A disclosure event may have a status of pending, on appeal, or final.

§ A "pending" event involves allegations that have not been proven or formally adjudicated.§ An event that is "on appeal" involves allegations that have been adjudicated but are currently

being appealed.§ A "final" event has been concluded and its resolution is not subject to change.

o A final event generally has a disposition of adjudicated, settled or otherwise resolved.§ An "adjudicated" matter includes a disposition by (1) a court of law in a criminal or civil matter,

or (2) an administrative panel in an action brought by a regulator that is contested by the partycharged with some alleged wrongdoing.

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§ A "resolved" matter usually involves no payment to the customer and no finding ofwrongdoing on the part of the individual broker. Such matters generally involve customerdisputes.

5. You may wish to contact the brokerage firm to obtain further information regarding any of thedisclosure events contained in this BrokerCheck report.

Regulatory - Final

This type of disclosure event involves (1) a final, formal proceeding initiated by a regulatory authority (e.g., a statesecurities agency, self-regulatory organization, federal regulator such as the U.S. Securities and Exchange Commission,foreign financial regulatory body) for a violation of investment-related rules or regulations; or (2) a revocation orsuspension of the authority of a brokerage firm or its control affiliate to act as an attorney, accountant or federalcontractor.

Disclosure 1 of 53

Reporting Source: Regulator

Allegations: SEC ADMIN RELEASE 34-85867, MAY 15, 2019: THE SECURITIES ANDEXCHANGE COMMISSION ("COMMISSION") DEEMS IT APPROPRIATE AND INTHE PUBLIC INTEREST THAT PUBLIC ADMINISTRATIVE AND CEASE-AND-DESIST PROCEEDINGS BE, AND HEREBY ARE, INSTITUTED PURSUANT TOSECTIONS 15(B) AND 21C OF THE SECURITIES EXCHANGE ACT OF 1934("EXCHANGE ACT") AGAINST WILSON-DAVIS & CO., INC. THE FIRM FAILEDTO FILE SUSPICIOUS ACTIVITY REPORTS ("SARS") WHEN IT KNEW,SUSPECTED, OR HAD REASON TO SUSPECT THAT CERTAIN PENNY STOCKTRANSACTIONS IT EXECUTED ON BEHALF OF ITS CUSTOMERS INVOLVEDTHE USE OF ITS FIRM TO FACILITATE FRAUDULENT ACTIVITY OR HAD NOBUSINESS OR APPARENT LAWFUL PURPOSE. THE FIRM IGNOREDNUMEROUS RED FLAGS LISTED IN ITS AML POLICIES, FAILED TOPROPERLY INVESTIGATE CERTAIN CONDUCT, AND ULTIMATELY FAILED TOFILE SARS ON THE SUSPICIOUS ACTIVITY. NUMEROUS TRANSACTIONS BYFIRM CUSTOMERS RAISED RED FLAGS THAT INDICATED POTENTIALMARKET MANIPULATION OR PUMP-AND-DUMP ACTIVITY IN LOW-PRICEDSECURITIES. ALL OF THESE TRANSACTIONS INVOLVED THE DEPOSIT OFPHYSICAL CERTIFICATES, THE LIQUIDATION OF THE SECURITIES, AND THEIMMEDIATE WIRING OF FUNDS OUT OF THE CUSTOMER'S ACCOUNT,ACTIVITY IDENTIFIED AS A RED FLAG OF SUSPICIOUS ACTIVITY IN ITS OWNAML POLICIES. MANY OF THESE TRANSACTIONS RAISED ADDITIONAL REDFLAGS THAT SHOULD HAVE HEIGHTENED THE FIRM'S SUSPICIONS.NONETHELESS, THE FIRM FAILED TO EITHER IDENTIFY OR TOINVESTIGATE THESE RED FLAGS, DESPITE THE FACT THAT ITS WRITTENAML PROCEDURES IDENTIFIED SUCH ACTIVITY AS INDICATORS OFPOTENTIAL MONEY LAUNDERING, AND REQUIRED THEIR FURTHERINVESTIGATION FOR THE POSSIBLE FILING OF A SAR. BY FAILING TO FILESARS AS REQUIRED, THE FIRM WILLFULLY VIOLATED SECTION 17(A) OFTHE EXCHANGE ACT AND RULE 17A-8 THEREUNDER.

Current Status: Final






Initiated By: UNITED STATES SECURITIES AND EXCHANGE COMMISSION

Principal Sanction(s)/ReliefSought:

Other

Other Sanction(s)/ReliefSought:

N/A

Date Initiated: 05/15/2019

Docket/Case Number: 3-19167

Principal Product Type: No Product

Other Product Type(s):

Allegations: SEC ADMIN RELEASE 34-85867, MAY 15, 2019: THE SECURITIES ANDEXCHANGE COMMISSION ("COMMISSION") DEEMS IT APPROPRIATE AND INTHE PUBLIC INTEREST THAT PUBLIC ADMINISTRATIVE AND CEASE-AND-DESIST PROCEEDINGS BE, AND HEREBY ARE, INSTITUTED PURSUANT TOSECTIONS 15(B) AND 21C OF THE SECURITIES EXCHANGE ACT OF 1934("EXCHANGE ACT") AGAINST WILSON-DAVIS & CO., INC. THE FIRM FAILEDTO FILE SUSPICIOUS ACTIVITY REPORTS ("SARS") WHEN IT KNEW,SUSPECTED, OR HAD REASON TO SUSPECT THAT CERTAIN PENNY STOCKTRANSACTIONS IT EXECUTED ON BEHALF OF ITS CUSTOMERS INVOLVEDTHE USE OF ITS FIRM TO FACILITATE FRAUDULENT ACTIVITY OR HAD NOBUSINESS OR APPARENT LAWFUL PURPOSE. THE FIRM IGNOREDNUMEROUS RED FLAGS LISTED IN ITS AML POLICIES, FAILED TOPROPERLY INVESTIGATE CERTAIN CONDUCT, AND ULTIMATELY FAILED TOFILE SARS ON THE SUSPICIOUS ACTIVITY. NUMEROUS TRANSACTIONS BYFIRM CUSTOMERS RAISED RED FLAGS THAT INDICATED POTENTIALMARKET MANIPULATION OR PUMP-AND-DUMP ACTIVITY IN LOW-PRICEDSECURITIES. ALL OF THESE TRANSACTIONS INVOLVED THE DEPOSIT OFPHYSICAL CERTIFICATES, THE LIQUIDATION OF THE SECURITIES, AND THEIMMEDIATE WIRING OF FUNDS OUT OF THE CUSTOMER'S ACCOUNT,ACTIVITY IDENTIFIED AS A RED FLAG OF SUSPICIOUS ACTIVITY IN ITS OWNAML POLICIES. MANY OF THESE TRANSACTIONS RAISED ADDITIONAL REDFLAGS THAT SHOULD HAVE HEIGHTENED THE FIRM'S SUSPICIONS.NONETHELESS, THE FIRM FAILED TO EITHER IDENTIFY OR TOINVESTIGATE THESE RED FLAGS, DESPITE THE FACT THAT ITS WRITTENAML PROCEDURES IDENTIFIED SUCH ACTIVITY AS INDICATORS OFPOTENTIAL MONEY LAUNDERING, AND REQUIRED THEIR FURTHERINVESTIGATION FOR THE POSSIBLE FILING OF A SAR. BY FAILING TO FILESARS AS REQUIRED, THE FIRM WILLFULLY VIOLATED SECTION 17(A) OFTHE EXCHANGE ACT AND RULE 17A-8 THEREUNDER.

Resolution Date: 05/15/2019

Resolution:

Does the order constitute afinal order based onviolations of any laws orregulations that prohibitfraudulent, manipulative, ordeceptive conduct?

No

Order






Other Sanctions Ordered: UNDERTAKINGS

Sanction Details: THE FIRM WAS ORDERED TO CEASE AND DESIST, CENSURED, FINED$300,000, AND ORDERED TO COMPLY WITH THE UNDERTAKINGSENUMERATED IN THE ORDER.

Regulator Statement IN ANTICIPATION OF THE INSTITUTION OF THESE PROCEEDINGS,RESPONDENT HAS SUBMITTED AN OFFER OF SETTLEMENT (THE "OFFER")WHICH THE COMMISSION HAS DETERMINED TO ACCEPT. BY ENGAGING INTHE CONDUCT DESCRIBED ABOVE, THE FIRM WILLFULLY VIOLATEDSECTION 17(A) OF THE EXCHANGE ACT AND RULE 17A-8 THEREUNDER.ACCORDINGLY, IT IS HEREBY ORDERED THAT: THE FIRM CEASE ANDDESIST FROM COMMITTING OR CAUSING ANY VIOLATIONS AND ANYFUTURE VIOLATIONS OF SECTION 17(A) OF THE EXCHANGE ACT AND RULE17A-8 PROMULGATED THEREUNDER, IS CENSURED, SHALL, WITHIN 60DAYS OF THE ENTRY OF THIS ORDER, PAY A CIVIL MONEY PENALTY IN THEAMOUNT OF $300,000 TO THE SECURITIES AND EXCHANGE COMMISSIONFOR TRANSFER TO THE GENERAL FUND OF THE UNITED STATESTREASURY, AND SHALL COMPLY WITH THE UNDERTAKINGS ENUMERATEDIN THE ORDER.


No

Sanctions Ordered: CensureMonetary/Fine $300,000.00Cease and Desist/Injunction

iReporting Source: Firm

Initiated By: UNITED STATES SECURITIES EXCHANGE COMMISSION


Civil and Administrative Penalt(ies) /Fine(s)



Principal Product Type: Penny Stock(s)


Allegations: THE COMMISSION ALLEGED THAT THE FIRM FAILED TO FILE SAR INREGARD TO CERTAIN CLIENT ACTIVITY AT THE FIRM.










CENSURE, CEASE AND DESIST ORDER, UNDERTAKING


Resolution:

Other Sanctions Ordered: AGREED UPON UNDERTAKING TO REVIEW AND REVISE AML POLICIES ANDPROCEDURES.

Sanction Details: THE FIRM IS REQUIRED TO PAY $300,000 WITHIN 60 DAYS, TO COMPLETEAN UNDERTAKING AS SET FORTH IN THE ORDER, AND TO CEASE ANDDESIST FROM COMMITTING OR CAUSING ANY VIOLATION AND ANYFUTURE VIOLATION OF SECTION 17(A) OF THE EXCHANGE ACT AND RULE17A-8.

Firm Statement THE FIRM, WITHOUT ADMITTING OR DENYING THE SEC'S ALLEGATIONS,AGREED TO SETTLE THIS MATTER AND TO THE IMPOSITION OF AN ORDERREQUIRING A $300,000.00 PAYMENT AND AN UNDERTAKING, AMONGOTHER ITEMS.

Sanctions Ordered: CensureMonetary/Fine $300,000.00Cease and Desist/Injunction

Settled

Disclosure 2 of 53

i


Allegations: WITHOUT ADMITTING OR DENYING THE FINDINGS, THE FIRM CONSENTEDTO THE SANCTIONS AND TO THE ENTRY OF FINDINGS THAT IT FAILED TOESTABLISH, MAINTAIN, AND ENFORCE A SUPERVISORY SYSTEM,INCLUDING WSPS, REASONABLY DESIGNED TO REVIEW EMAILCORRESPONDENCE FOR INDICATIONS OF POTENTIAL VIOLATIONS OFFEDERAL SECURITIES LAWS OR FINRA RULES. THE FINDINGS STATEDTHAT THE FIRM LACKED ANY PERTINENT WSPS, AND ITS METHODS FORREVIEWING EMAIL MESSAGES WERE INEFFECTIVE AND UNREASONABLEGIVEN ITS BUSINESS, SIZE, STRUCTURE, AND CUSTOMERS. THE FIRM'SWSPS DID NOT INCLUDE PROCEDURES DESCRIBING HOW IT WOULDCONDUCT ITS SUPERVISORY REVIEW OF ELECTRONIC COMMUNICATIONSSENT OR RECEIVED BY ITS REGISTERED INDIVIDUALS, THE EMAILSSELECTED RANDOMLY BY THE FIRM'S EMAIL VENDOR DID NOTCONSTITUTE A REASONABLE AMOUNT OF THE FIRM'S OVERALLELECTRONIC COMMUNICATIONS, AND THE SEARCH TERMS THAT WOULDFLAG AN EMAIL FOR A PRINCIPAL REVIEW WERE NOT COMPREHENSIVEENOUGH TO YIELD A MEANINGFUL SAMPLE OF FLAGGEDCOMMUNICATIONS.







Initiated By: FINRA




Docket/Case Number: 2014042949704



WITHOUT ADMITTING OR DENYING THE FINDINGS, THE FIRM CONSENTEDTO THE SANCTIONS AND TO THE ENTRY OF FINDINGS THAT IT FAILED TOESTABLISH, MAINTAIN, AND ENFORCE A SUPERVISORY SYSTEM,INCLUDING WSPS, REASONABLY DESIGNED TO REVIEW EMAILCORRESPONDENCE FOR INDICATIONS OF POTENTIAL VIOLATIONS OFFEDERAL SECURITIES LAWS OR FINRA RULES. THE FINDINGS STATEDTHAT THE FIRM LACKED ANY PERTINENT WSPS, AND ITS METHODS FORREVIEWING EMAIL MESSAGES WERE INEFFECTIVE AND UNREASONABLEGIVEN ITS BUSINESS, SIZE, STRUCTURE, AND CUSTOMERS. THE FIRM'SWSPS DID NOT INCLUDE PROCEDURES DESCRIBING HOW IT WOULDCONDUCT ITS SUPERVISORY REVIEW OF ELECTRONIC COMMUNICATIONSSENT OR RECEIVED BY ITS REGISTERED INDIVIDUALS, THE EMAILSSELECTED RANDOMLY BY THE FIRM'S EMAIL VENDOR DID NOTCONSTITUTE A REASONABLE AMOUNT OF THE FIRM'S OVERALLELECTRONIC COMMUNICATIONS, AND THE SEARCH TERMS THAT WOULDFLAG AN EMAIL FOR A PRINCIPAL REVIEW WERE NOT COMPREHENSIVEENOUGH TO YIELD A MEANINGFUL SAMPLE OF FLAGGEDCOMMUNICATIONS.


Resolution:

Other Sanctions Ordered:

Sanction Details: THE FIRM WAS CENSURED AND FINED $32,500. FINES PAID IN FULL ONJULY 17, 2019.


No

Sanctions Ordered: CensureMonetary/Fine $32,500.00

Acceptance, Waiver & Consent(AWC)


Allegations: WITHOUT ADMITTING OR DENYING THE FINDINGS, THE FIRM CONSENTEDTO THE SANCTIONS AND TO THE ENTRY OF FINDINGS THAT IT FAILED TOESTABLISH, MAINTAIN, AND ENFORCE A SUPERVISORY SYSTEM,INCLUDING WSPS, REASONABLY DESIGNED TO REVIEW EMAILCORRESPONDENCE FOR INDICATIONS OF POTENTIAL VIOLATIONS OFFEDERAL SECURITIES LAWS OR FINRA RULES. THE FINDINGS STATEDTHAT THE FIRM LACKED ANY PERTINENT WSPS, AND ITS METHODS FORREVIEWING EMAIL MESSAGES WERE INEFFECTIVE AND UNREASONABLEGIVEN ITS BUSINESS, SIZE, STRUCTURE, AND CUSTOMERS. THE FIRM'SWSPS DID NOT INCLUDE PROCEDURES DESCRIBING HOW IT WOULDCONDUCT ITS SUPERVISORY REVIEW OF ELECTRONIC COMMUNICATIONSSENT OR RECEIVED BY ITS REGISTERED INDIVIDUALS, THE EMAILSSELECTED RANDOMLY BY THE FIRM'S EMAIL VENDOR DID NOTCONSTITUTE A REASONABLE AMOUNT OF THE FIRM'S OVERALLELECTRONIC COMMUNICATIONS, AND THE SEARCH TERMS THAT WOULDFLAG AN EMAIL FOR A PRINCIPAL REVIEW WERE NOT COMPREHENSIVEENOUGH TO YIELD A MEANINGFUL SAMPLE OF FLAGGEDCOMMUNICATIONS.






https://www.finra.org/rules-guidance/oversight-enforcement/finra-disciplinary-actions?search=2014042949704


Initiated By: FINRA


Other


RELIEF SOUGHT





WITHOUT ADMITTING OR DENYING THE FINDINGS, THE FIRM CONSENTEDTO THE SANCTIONS AND TO THE ENTRY OF FINDINGS THAT IT FAILED TOESTABLISH, MAINTAIN, AND ENFORCE A SUPERVISORY SYSTEM,INCLUDING WSPS, REASONABLY DESIGNED TO REVIEW EMAILCORRESPONDENCE FOR INDICATIONS OF POTENTIAL VIOLATIONS OFFEDERAL SECURITIES LAWS OR FINRA RULES. THE FINDINGS STATEDTHAT THE FIRM LACKED ANY PERTINENT WSPS, AND ITS METHODS FORREVIEWING EMAIL MESSAGES WERE INEFFECTIVE AND UNREASONABLEGIVEN ITS BUSINESS, SIZE, STRUCTURE, AND CUSTOMERS. THE FIRM'SWSPS DID NOT INCLUDE PROCEDURES DESCRIBING HOW IT WOULDCONDUCT ITS SUPERVISORY REVIEW OF ELECTRONIC COMMUNICATIONSSENT OR RECEIVED BY ITS REGISTERED INDIVIDUALS, THE EMAILSSELECTED RANDOMLY BY THE FIRM'S EMAIL VENDOR DID NOTCONSTITUTE A REASONABLE AMOUNT OF THE FIRM'S OVERALLELECTRONIC COMMUNICATIONS, AND THE SEARCH TERMS THAT WOULDFLAG AN EMAIL FOR A PRINCIPAL REVIEW WERE NOT COMPREHENSIVEENOUGH TO YIELD A MEANINGFUL SAMPLE OF FLAGGEDCOMMUNICATIONS.


Resolution:


Sanction Details: THE FIRM AS CENSURED AND FINED $32,500.00

Firm Statement AS SET FORTH IN THE AWC, THE FIRM NEITHER ADMITS NOR DENIES THEFINDINGS AND, AS WITH ALL SETTLEMENTS, THE FIRM CONSIDERED THECOST OF LITIGATION, AS WELL AS OTHER ISSUES (INCLUDING THE FACTSAND PROPOSED SANCTION) IN MAKING ITS DECISION.



Disclosure 3 of 53

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Reporting Source: Firm

Allegations: FIRM FAILED TO ESTABLISH OR MAINTAIN AND ENFORCE WRITTENPROCEDURES, TO SUPERVISE THE BUSINESS IN WHICH IT ENGAGES THATARE REASONABLY DESIGNED TO ACHIEVE COMPLIANCE WITH THEREGULATIONS OF THE NYSE ARCA EQUITIES RULES.








Initiated By: NYSE ARCA






Principal Product Type: Equity - OTC


FIRM FAILED TO ESTABLISH OR MAINTAIN AND ENFORCE WRITTENPROCEDURES, TO SUPERVISE THE BUSINESS IN WHICH IT ENGAGES THATARE REASONABLY DESIGNED TO ACHIEVE COMPLIANCE WITH THEREGULATIONS OF THE NYSE ARCA EQUITIES RULES.


Resolution:

Other Sanctions Ordered: NONE

Sanction Details: NONE

Firm Statement FINED FOR A MINOR RULE PLAN VIOLATION AND CAUTIONARY ACTION.

Sanctions Ordered: Monetary/Fine $3,500.00

Other

Disclosure 4 of 53

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Allegations: WITHOUT ADMITTING OR DENYING THE FINDINGS, THE FIRM CONSENTEDTO THE SANCTIONS AND TO THE ENTRY OF FINDINGS THAT IT FAILED TOPUBLISH IMMEDIATELY A BID OR OFFER THAT REFLECTED THE PRICE ANDTHE FULL SIZE OF 54 CUSTOMER LIMIT ORDERS FOR OVER-THE-COUNTER (OTC) EQUITY SECURITIES HELD BY THE FIRM. THE FINDINGSSTATED THAT THE OTC EQUITY SECURITIES HELD BY THE FIRM WERE AT APRICE THAT WOULD HAVE IMPROVED THE FIRM'S BID OR OFFER IN SUCHSECURITIES. THE FINDINGS ALSO STATED THAT THE FIRM IDENTIFIED,AMONG OTHER THINGS, THE FIRM LOCKED AND CROSSED MARKETSPROCEDURES AS PART OF ITS SUPERVISORY SYSTEM FOR ACHIEVINGCOMPLIANCE WITH FINRA RULE 6460. THE FIRM FAILED TO IMPLEMENT ASUPERVISORY SYSTEM, INCLUDING POLICIES AND PROCEDURES THATREASONABLY AVOID DISPLAYING, OR ENGAGING IN A PATTERN ORPRACTICE OF DISPLAYING, LOCKING OR CROSSING QUOTATIONS IN ANYOTC EQUITY SECURITY. SPECIFICALLY, THE FIRM'S SUPERVISORY SYSTEMDID NOT INCLUDE WRITTEN SUPERVISORY PROCEDURES (WSPS)PROVIDING FOR A STATEMENT OF THE SUPERVISORY STEP(S) THEPERSON(S) RESPONSIBLE FOR SUPERVISION SHOULD TAKE WITHRESPECT TO THE APPLICABLE RULES.







Initiated By: FINRA







WITHOUT ADMITTING OR DENYING THE FINDINGS, THE FIRM CONSENTEDTO THE SANCTIONS AND TO THE ENTRY OF FINDINGS THAT IT FAILED TOPUBLISH IMMEDIATELY A BID OR OFFER THAT REFLECTED THE PRICE ANDTHE FULL SIZE OF 54 CUSTOMER LIMIT ORDERS FOR OVER-THE-COUNTER (OTC) EQUITY SECURITIES HELD BY THE FIRM. THE FINDINGSSTATED THAT THE OTC EQUITY SECURITIES HELD BY THE FIRM WERE AT APRICE THAT WOULD HAVE IMPROVED THE FIRM'S BID OR OFFER IN SUCHSECURITIES. THE FINDINGS ALSO STATED THAT THE FIRM IDENTIFIED,AMONG OTHER THINGS, THE FIRM LOCKED AND CROSSED MARKETSPROCEDURES AS PART OF ITS SUPERVISORY SYSTEM FOR ACHIEVINGCOMPLIANCE WITH FINRA RULE 6460. THE FIRM FAILED TO IMPLEMENT ASUPERVISORY SYSTEM, INCLUDING POLICIES AND PROCEDURES THATREASONABLY AVOID DISPLAYING, OR ENGAGING IN A PATTERN ORPRACTICE OF DISPLAYING, LOCKING OR CROSSING QUOTATIONS IN ANYOTC EQUITY SECURITY. SPECIFICALLY, THE FIRM'S SUPERVISORY SYSTEMDID NOT INCLUDE WRITTEN SUPERVISORY PROCEDURES (WSPS)PROVIDING FOR A STATEMENT OF THE SUPERVISORY STEP(S) THEPERSON(S) RESPONSIBLE FOR SUPERVISION SHOULD TAKE WITHRESPECT TO THE APPLICABLE RULES.


Resolution:

Other Sanctions Ordered: UNDERTAKING

Sanction Details: THE FIRM WAS CENSURED, FINED $20,000 AND REQUIRED TO REVISE ITSWSPS. FINES PAID IN FULL ON JULY 7, 2019.

Regulator Statement THE CASE NUMBER 20140423062 INCLUDES CASE NUMBERS 20150455300AND 20150475926


No




Allegations: THE FIRM FAILED TO PUBLISH IMMEDIATELY A BID OR OFFER THATREFLECTED THE PRICE AND FULL SIZE OF CUSTOMER LIMIT ORDERS.FIRMS WSPS DEEMED INADEQUATE IN THIS AREA. NO DISGORGEMENTWAS REQUIRED AS VIOLATIONS DID NOT HAVE NEGATIVE IMPACT ONCUSTOMERS.








Initiated By: FINRA




REVISE WSPS.





THE FIRM FAILED TO PUBLISH IMMEDIATELY A BID OR OFFER THATREFLECTED THE PRICE AND FULL SIZE OF CUSTOMER LIMIT ORDERS.FIRMS WSPS DEEMED INADEQUATE IN THIS AREA. NO DISGORGEMENTWAS REQUIRED AS VIOLATIONS DID NOT HAVE NEGATIVE IMPACT ONCUSTOMERS.


Resolution:

Other Sanctions Ordered: UNDERTAKING TO REVISE WSPS (WHICH HAS BEEN COMPLETED)


Firm Statement THE FIRM SETTLED THIS MATTER VIA AWC WITHOUT ADMITTING ORDENYING ANY FINDINGS OR WRONGDOING.



Disclosure 5 of 53

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Allegations: WITHOUT ADMITTING OR DENYING THE FINDINGS, THE FIRM CONSENTEDTO THE SANCTIONS AND TO THE ENTRY OF FINDINGS THAT IN 35INSTANCES, THE FIRM ACCEPTED AND HELD 24 CUSTOMER ORDERS INOVER-THE-COUNTER (OTC) SECURITIES, TRADED FOR ITS OWN ACCOUNTAT PRICES THAT WOULD HAVE SATISFIED THE CUSTOMER ORDERS, ANDFAILED TO EXECUTE OR IMMEDIATELY THEREAFTER EXECUTE THECUSTOMER ORDERS UP TO THE SIZE AND AT THE SAME PRICE AT WHICHIT TRADED FOR ITS OWN ACCOUNT OR AT A BETTER PRICE. THE FINDINGSSTATED THAT IN 11 OF THESE INSTANCES, THE FIRM ALSO FAILED TOEXECUTE A MARKETABLE CUSTOMER ORDER FULLY AND PROMPTLY. THEFINDINGS ALSO STATED THAT THE FIRM'S SUPERVISORY SYSTEM DID NOTPROVIDE FOR SUPERVISION REASONABLY DESIGNED TO ACHIEVECOMPLIANCE WITH FINRA RULE 5320. SPECIFICALLY, THE FIRM'S WRITTENSUPERVISORY PROCEDURES RELIED UPON CERTAIN EXCEPTIONREPORTS TO IDENTIFY POTENTIALLY VIOLATIVE CONDUCT, BUT THEEXCEPTION REPORTS FAILED TO CAPTURE MANY OF THE VIOLATIONSCITED HEREIN.







Initiated By: FINRA







WITHOUT ADMITTING OR DENYING THE FINDINGS, THE FIRM CONSENTEDTO THE SANCTIONS AND TO THE ENTRY OF FINDINGS THAT IN 35INSTANCES, THE FIRM ACCEPTED AND HELD 24 CUSTOMER ORDERS INOVER-THE-COUNTER (OTC) SECURITIES, TRADED FOR ITS OWN ACCOUNTAT PRICES THAT WOULD HAVE SATISFIED THE CUSTOMER ORDERS, ANDFAILED TO EXECUTE OR IMMEDIATELY THEREAFTER EXECUTE THECUSTOMER ORDERS UP TO THE SIZE AND AT THE SAME PRICE AT WHICHIT TRADED FOR ITS OWN ACCOUNT OR AT A BETTER PRICE. THE FINDINGSSTATED THAT IN 11 OF THESE INSTANCES, THE FIRM ALSO FAILED TOEXECUTE A MARKETABLE CUSTOMER ORDER FULLY AND PROMPTLY. THEFINDINGS ALSO STATED THAT THE FIRM'S SUPERVISORY SYSTEM DID NOTPROVIDE FOR SUPERVISION REASONABLY DESIGNED TO ACHIEVECOMPLIANCE WITH FINRA RULE 5320. SPECIFICALLY, THE FIRM'S WRITTENSUPERVISORY PROCEDURES RELIED UPON CERTAIN EXCEPTIONREPORTS TO IDENTIFY POTENTIALLY VIOLATIVE CONDUCT, BUT THEEXCEPTION REPORTS FAILED TO CAPTURE MANY OF THE VIOLATIONSCITED HEREIN.


Resolution:

Other Sanctions Ordered: INTEREST; UNDERTAKING: REQUIRED TO REVISE THE FIRM'S WRITTENSUPERVISORY PROCEDURES

Sanction Details: THE FIRM WAS CENSURED, FINED $15,000, ORDERED TO PAY $183.07,PLUS INTEREST, IN RESTITUTION TO CUSTOMERS, AND REQUIRED TOREVISE ITS WRITTEN SUPERVISORY PROCEDURES. FINES PAID IN FULLON 5/8/17.


No

Sanctions Ordered: CensureMonetary/Fine $15,000.00Disgorgement/Restitution



Initiated By: FINRA

Allegations: TRADING FOR FIRM'S ACCOUNT, SOMETIMES WITH THE INTENT TOSATISFY A CUSTOMER ORDER, BEFORE THE CUSTOMER'S ORDERS WEREENTERED AND FILLED, AMONG OTHER FACT PATTERNS.








Initiated By: FINRA




UNDERTAKING TO REVISE WSP






Resolution:

Other Sanctions Ordered: UNDERTAKING REGARDING REVISION TO WSPS AND RESTITUTION IN THEAMOUNT OF $183.07.


Firm Statement WITHOUT ADMITTING OR DENYING THE ALLEGATIONS, THE FIRM AGREEDTO SETTLE WITH FINRA.

Sanctions Ordered: CensureMonetary/Fine $15,000.00Disgorgement/Restitution


Disclosure 6 of 53

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Allegations: SEC ADMIN RELEASE 34-79580 / DECEMBER 16, 2016: THE SECURITIESAND EXCHANGE COMMISSION ("COMMISSION") DEEMS IT APPROPRIATEAND IN THE PUBLIC INTEREST THAT PUBLIC ADMINISTRATIVE AND CEASE-AND-DESIST PROCEEDINGS BE, AND HEREBY ARE, INSTITUTED AGAINSTWILSON-DAVIS & CO., INC. ("WDCO" OR THE "RESPONDENT"). AFTER ANINVESTIGATION, THE DIVISION OF ENFORCEMENT ALLEGES THAT FROM ATLEAST NOVEMBER 2011 THROUGH MAY 2013, WDCO WILLFULLY VIOLATEDREGULATION SHO BY TAKING ADVANTAGE OF THE BONA-FIDE MARKETMAKING EXCEPTION TO THE "LOCATE" REQUIREMENT FOR SHORT SALESIN RULE 203(B)(2)(III) WITHOUT BEING ENTITLED TO RELY ON THEEXCEPTION. RULE 203(B)(1) OF REGULATION SHO REQUIRES A BROKER-DEALER, PRIOR TO EFFECTING A SHORT SALE IN AN EQUITY SECURITYFOR ITS OWN ACCOUNT, TO "LOCATE" A SOURCE OF BORROWABLESECURITIES THAT CAN BE DELIVERED ON THE DATE THAT DELIVERY ISDUE, AND DOCUMENT SUCH LOCATE. RULE 203(B)(2)(III) PROVIDES ALIMITED EXCEPTION TO THE LOCATE REQUIREMENT FOR SHORT SALESEFFECTED BY A MARKET MAKER IN CONNECTION WITH BONA-FIDEMARKET MAKING ACTIVITIES IN THE SECURITIES FOR WHICH THEEXCEPTION IS CLAIMED. DURING THE RELEVANT TIME, WDCOCONSIDERED ALL OF ITS PROPRIETARY TRADING TO BE BONA-FIDEMARKET MAKING ACTIVITY AND RELIED ON THE BONA-FIDE MARKETMAKING EXCEPTION IN RULE 203(B)(2)(III). THIS RELIANCE WAS IMPROPERBECAUSE MUCH OF WDCO'S TRADING WAS NOT, IN FACT, BONA-FIDEMARKET MAKING. AS A RESULT, WDCO VIOLATED RULE 203(B)(1) OFREGULATION SHO. WHILE IMPROPERLY AVAILING ITSELF OF THEEXCEPTION, WDCO ENGAGED IN NUMEROUS SHORT SALES IN OVER-THE-COUNTER EQUITY SECURITIES THAT RESULTED IN SIGNIFICANT ANDIMPROPER TRADING PROFITS. AS A RESULT OF THE CONDUCT, WDCOCOMMITTED WILLFUL VIOLATIONS OF RULE 203(B)(1) OF REGULATIONSHO.DURING THE YEARS 2012, 2013, AND 2014, WDCO ALSO WILLFULLYVIOLATED SECTION 15(C)(3) OF THE EXCHANGE ACT AND RULE 15C3-5 BYFAILING TO HAVE CONTROLS AND SUPERVISORY PROCEDURESREASONABLY DESIGNED TO PREVENT THE ENTRY OF: (A) ORDERS THATEXCEEDED APPROPRIATE PRE-SET CAPITAL THRESHOLDS, (B)ERRONEOUS ORDERS, AND (C) ORDERS UNLESS THERE HAS BEENCOMPLIANCE WITH ALL REGULATORY REQUIREMENTS THAT MUST BESATISFIED ON A PRE-ORDER ENTRY BASIS AS REQUIRED BY RULE 15C3-5(B) AND (C). IN ADDITION, WDCO FAILED TO ESTABLISH, DOCUMENT ANDMAINTAIN A SYSTEM FOR REGULARLY REVIEWING THE EFFECTIVENESSOF THE RISK MANAGEMENT CONTROLS AND SUPERVISORY PROCEDURESUNDER RULE 15C3-5(E), INCLUDING FAILING TO REVIEW PROPERLY ITSBUSINESS ACTIVITY IN CONNECTION WITH MARKET ACCESS TO ASSURETHE OVERALL EFFECTIVENESS OF ITS CONTROLS AND SUPERVISORYPROCEDURES AS WELL AS FAILING TO EXECUTE THE REQUIRED CHIEFEXECUTIVE OFFICER ("CEO") CERTIFICATIONS. AS A RESULT OF THECONDUCT, WDCO COMMITTED WILLFUL VIOLATIONS OF SECTION 15(C)(3)OF THE EXCHANGE ACT AND RULE 15C3-5(B), (C) AND (E) THEREUNDER.








Initiated By: UNITED STATES SECURITIES AND EXCHANGE COMMISSION


Other


N/A



Principal Product Type: Equity Listed (Common & Preferred Stock)


SEC ADMIN RELEASE 34-79580 / DECEMBER 16, 2016: THE SECURITIESAND EXCHANGE COMMISSION ("COMMISSION") DEEMS IT APPROPRIATEAND IN THE PUBLIC INTEREST THAT PUBLIC ADMINISTRATIVE AND CEASE-AND-DESIST PROCEEDINGS BE, AND HEREBY ARE, INSTITUTED AGAINSTWILSON-DAVIS & CO., INC. ("WDCO" OR THE "RESPONDENT"). AFTER ANINVESTIGATION, THE DIVISION OF ENFORCEMENT ALLEGES THAT FROM ATLEAST NOVEMBER 2011 THROUGH MAY 2013, WDCO WILLFULLY VIOLATEDREGULATION SHO BY TAKING ADVANTAGE OF THE BONA-FIDE MARKETMAKING EXCEPTION TO THE "LOCATE" REQUIREMENT FOR SHORT SALESIN RULE 203(B)(2)(III) WITHOUT BEING ENTITLED TO RELY ON THEEXCEPTION. RULE 203(B)(1) OF REGULATION SHO REQUIRES A BROKER-DEALER, PRIOR TO EFFECTING A SHORT SALE IN AN EQUITY SECURITYFOR ITS OWN ACCOUNT, TO "LOCATE" A SOURCE OF BORROWABLESECURITIES THAT CAN BE DELIVERED ON THE DATE THAT DELIVERY ISDUE, AND DOCUMENT SUCH LOCATE. RULE 203(B)(2)(III) PROVIDES ALIMITED EXCEPTION TO THE LOCATE REQUIREMENT FOR SHORT SALESEFFECTED BY A MARKET MAKER IN CONNECTION WITH BONA-FIDEMARKET MAKING ACTIVITIES IN THE SECURITIES FOR WHICH THEEXCEPTION IS CLAIMED. DURING THE RELEVANT TIME, WDCOCONSIDERED ALL OF ITS PROPRIETARY TRADING TO BE BONA-FIDEMARKET MAKING ACTIVITY AND RELIED ON THE BONA-FIDE MARKETMAKING EXCEPTION IN RULE 203(B)(2)(III). THIS RELIANCE WAS IMPROPERBECAUSE MUCH OF WDCO'S TRADING WAS NOT, IN FACT, BONA-FIDEMARKET MAKING. AS A RESULT, WDCO VIOLATED RULE 203(B)(1) OFREGULATION SHO. WHILE IMPROPERLY AVAILING ITSELF OF THEEXCEPTION, WDCO ENGAGED IN NUMEROUS SHORT SALES IN OVER-THE-COUNTER EQUITY SECURITIES THAT RESULTED IN SIGNIFICANT ANDIMPROPER TRADING PROFITS. AS A RESULT OF THE CONDUCT, WDCOCOMMITTED WILLFUL VIOLATIONS OF RULE 203(B)(1) OF REGULATIONSHO.DURING THE YEARS 2012, 2013, AND 2014, WDCO ALSO WILLFULLYVIOLATED SECTION 15(C)(3) OF THE EXCHANGE ACT AND RULE 15C3-5 BYFAILING TO HAVE CONTROLS AND SUPERVISORY PROCEDURESREASONABLY DESIGNED TO PREVENT THE ENTRY OF: (A) ORDERS THATEXCEEDED APPROPRIATE PRE-SET CAPITAL THRESHOLDS, (B)ERRONEOUS ORDERS, AND (C) ORDERS UNLESS THERE HAS BEENCOMPLIANCE WITH ALL REGULATORY REQUIREMENTS THAT MUST BESATISFIED ON A PRE-ORDER ENTRY BASIS AS REQUIRED BY RULE 15C3-5(B) AND (C). IN ADDITION, WDCO FAILED TO ESTABLISH, DOCUMENT ANDMAINTAIN A SYSTEM FOR REGULARLY REVIEWING THE EFFECTIVENESSOF THE RISK MANAGEMENT CONTROLS AND SUPERVISORY PROCEDURESUNDER RULE 15C3-5(E), INCLUDING FAILING TO REVIEW PROPERLY ITSBUSINESS ACTIVITY IN CONNECTION WITH MARKET ACCESS TO ASSURETHE OVERALL EFFECTIVENESS OF ITS CONTROLS AND SUPERVISORYPROCEDURES AS WELL AS FAILING TO EXECUTE THE REQUIRED CHIEFEXECUTIVE OFFICER ("CEO") CERTIFICATIONS. AS A RESULT OF THECONDUCT, WDCO COMMITTED WILLFUL VIOLATIONS OF SECTION 15(C)(3)OF THE EXCHANGE ACT AND RULE 15C3-5(B), (C) AND (E) THEREUNDER.







N/A


Resolution:

Other Sanctions Ordered: PREJUDGMENT INTEREST OF $27,068.79

Sanction Details: SEC ADMIN RELEASE 34-80533/APRIL 26, 2017: AS A RESULT OF ITSCONDUCT, THE FIRM WILLFULLY VIOLATED RULE 203(B)(1) OFREGULATION SHO, AND SECTION 15(C)(3) OF THE EXCHANGE ACT ANDRULES 15C3-5(B), (C) AND (E) THEREUNDER. THE FIRM HAS SUBMITTED ANOFFER OF SETTLEMENT THAT THE COMMISSION HAS DETERMINED TOACCEPT. IN DETERMINING TO ACCEPT THE OFFER, THE COMMISSIONCONSIDERED REMEDIAL ACTS UNDERTAKEN BY WDCO. IN VIEW OF THEFOREGOING, THE COMMISSION DEEMS IT APPROPRIATE IN THE PUBLICINTEREST TO IMPOSE THE SANCTIONS AGREED TO IN WDCO'S OFFER.ACCORDINGLY, PURSUANT TO SECTION 15(B) AND SECTION 21C OF THEEXCHANGE ACT IT IS HEREBY ORDERED THAT: WDCO IS CENSURED ANDSHALL CEASE AND DESIST FROM COMMITTING OR CAUSING ANYVIOLATIONS AND ANY FUTURE VIOLATIONS OF RULE 203(B) OFREGULATION SHO AND SECTION 15(C) OF THE EXCHANGE ACT AND RULES15C3-5(B), (C) AND (E) THEREUNDER. WDCO SHALL PAY DISGORGEMENTOF $208,645.71, PREJUDGMENT INTEREST OF $27,068.79 AND A CIVILPENALTY OF $75,000, TO THE COMMISSION FOR TRANSFER TO THEGENERAL FUND OF THE UNITED STATES TREASURY.


No

Sanctions Ordered: CensureMonetary/Fine $75,000.00Disgorgement/RestitutionCease and Desist/Injunction

Order


Initiated By: US SECURITIES & EXCHANGE

Allegations: THE SEC ASSERTS THAT THE FIRM VIOLATED REG. SHO AND RULE 15C3-5BY IMPROPERLY RELYING UPON THE BONA-FIDE MARKET MAKEREXCEPTION.







Initiated By: US SECURITIES & EXCHANGE


Cease and Desist


DISGORGEMENT, PREJUDGMENT INTEREST, AND PENALTY






Resolution:

Other Sanctions Ordered: A CEASE AND DESIST ORDER WAS ENTERED STATING THAT THE FIRMSHALL CEASE AND DESIST FORM COMMITTING OR CAUSING FUTUREVIOLATIONS OF RULE 203(B) OF REG. SHO AND SECTION 15C OF THEEXCHANGE ACT AND RULES 15C3-5(B), (C), OR (E). OTHER SANCTIONDETAIL IS PROVIDED BELOW.

Sanction Details: THE SANCTIONS ISSUED WERE AS FOLLOWS: $75,000.00 PENALTY,$208,645.71 IN DISGORGEMENT OF TRADING PROFITS, AND $27,068.79 INPREJUDGMENT INTEREST. THESE AMOUNTS HAVE BEEN PAID IN FULL. ACENSURE WAS ISSUED AS WELL.

Firm Statement WITHOUT ADMITTING OR DENYING THE ALLEGATIONS, THE FIRM ENTEREDINTO A SETTLEMENT WITH THE COMMISSION. THE FIRM FURTHER STATESTHAT, TO THE EXTENT THE TERM "WILLFUL" WAS USED IN THE ORDER, INTHE SECURITIES LAW CONTEXT, "WILLFUL" MEANS ONLY THAT THE FIRMKNEW THAT IT WAS MAKING THE TRADES AT ISSUE. THE TERM "WILLFUL"IN THE CONTEXT OF THE ORDER DOES NOT MEAN THAT THERE WAS ANYINTENT BY THE FIRM TO VIOLATE SECURITIES LAW OR REGULATIONS ORTHAT THE FIRM EVEN HAD KNOWLEDGE THAT THE ALLEGED VIOLATIONOCCURRED.

Sanctions Ordered: CensureMonetary/Fine $75,000.00Disgorgement/RestitutionCease and Desist/Injunction

Decision & Order of Offer of Settlement

Disclosure 7 of 53

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Initiated By: FINRA





Principal Product Type: Other

Other Product Type(s): UNSPECIFIED SECURITIES

Allegations: WITHOUT ADMITTING OR DENYING THE FINDINGS, THE FIRM CONSENTEDTO THE SANCTIONS AND TO THE ENTRY OF FINDINGS THAT FOR THEFOURTH CALENDAR QUARTER OF 2012, THE FIRM MADE PUBLICLYAVAILABLE A REPORT ON ITS ROUTING OF NON-DIRECTED ORDERS INCOVERED SECURITIES DURING THAT QUARTER. THE FINDINGS STATEDTHAT THIS REPORT INCLUDED INACCURATE AND INCOMPLETEINFORMATION IN THAT THE FIRM IDENTIFIED ITSELF AS ONE OF THESIGNIFICANT VENUES TO WHICH IT ROUTED ORDERS FOR EXECUTION ASPRINCIPAL, BUT IDENTIFIED THE VENUE IN THE REPORT AS "PRINCIPAL,"RATHER THAN IDENTIFYING ITSELF BY THE NAME OF THE FIRM, ANDFAILED TO DISCLOSE THAT AS A ROUTING VENUE IT STOOD TO SHARE IN100 PERCENT OF WHATEVER PROFITS IT GENERATED BY TRADING ASPRINCIPAL WITH CUSTOMER ORDERS.



Resolution:


Sanction Details: THE FIRM WAS CENSURED AND FINED $10,000. FINE PAID IN FULL ON JUNE16, 2017.


No



iReporting Source:








Initiated By: FINRA


Censure






Allegations: PUBLIC REPORTING ON ROUTING OF NON-DIRECTED ORDERS WASINCOMPLETE THEREFORE INACCURATE FOR THE FOURTH QUARTER 2012.THIS WAS IN VIOLATION OF SEC RULE 606 OF REGULATION NMS.



Resolution:


Sanction Details: 10,000 FINE VIA AWC



Disclosure 8 of 53

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Initiated By: FINRA


Allegations: WITHOUT ADMITTING OR DENYING THE FINDINGS, THE FIRM CONSENTEDTO THE SANCTIONS AND TO THE ENTRY OF FINDINGS THAT IT FAILED TOENFORCE ITS WRITTEN SUPERVISORY PROCEDURES (WSPS) WHICHSPECIFIED THAT TRANSACTION REPORTS WERE PART OF THE FIRM'SREVIEW OF CUSTOMER TRANSACTIONS AND PROHIBITED TRANSACTIONSAND PRACTICES. THE FINDING STATED THAT THE FIRM'S SUPERVISORYSYSTEM FAILED TO ESTABLISH PROCEDURES FOR THE REVIEW ANDENDORSEMENT BY A REGISTERED PRINCIPAL(S) IN WRITING, ON ANINTERNAL RECORD, OF ALL TRANSACTIONS.














Resolution:

Other Sanctions Ordered: UNDERTAKING: REQUIRED TO REVISE THE FIRM'S SUPERVISORY SYSTEM

Sanction Details: SEE ABOVE


No




Initiated By: FINRA



Allegations: WITHOUT ADMITTING OR DENYING THE FINDINGS, THE FIRM CONSENTEDTO THE SANCTIONS AND TO THE ENTRY OF FINDINGS THAT IT FAILED TOENFORCE ITS WRITTEN SUPERVISORY PROCEDURES (WSPS) WHICHSPECIFIED THAT TRANSACTION REPORTS WERE PART OF THE FIRM'SREVIEW OF CUSTOMER TRANSACTIONS AND PROHIBITED TRANSACTIONSAND PRACTICES. THE FINDING STATED THAT THE FIRM'S SUPERVISORYSYSTEM FAILED TO ESTABLISH PROCEDURES FOR THE REVIEW ANDENDORSEMENT BY A REGISTERED PRINCIPAL(S) IN WRITING, ON ANINTERNAL RECORD, OF ALL TRANSACTIONS










Censure





Resolution:


Sanction Details: UPDATE WSP'S

Firm Statement WITHOUT ADMITTING OR DENYING THE FINDINGS, THE FIRM CONSENTEDTO THE SANCTIONS AND TO THE ENTRY OF FINDINGS THAT IT FAILED TOENFORCE ITS WRITTEN SUPERVISORY PROCEDURES (WSPS) WHICHSPECIFIED THAT TRANSACTION REPORTS WERE PART OF THE FIRM'SREVIEW OF CUSTOMER TRANSACTIONS AND PROHIBITED TRANSACTIONSAND PRACTICES. THE FINDING STATED THAT THE FIRM'S SUPERVISORYSYSTEM FAILED TO ESTABLISH PROCEDURES FOR THE REVIEW ANDENDORSEMENT BY A REGISTERED PRINCIPAL(S) IN WRITING, ON ANINTERNAL RECORD, OF ALL TRANSACTIONS



Disclosure 9 of 53

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Initiated By: FINRA


Allegations: SEC RULE 204(A)(2) - WILSON-DAVIS & CO., INC. HAD FAIL-TO-DELIVERPOSITIONS AT A REGISTERED CLEARING AGENCY IN TWO EQUITYSECURITIES THAT RESULTED FROM A SALE OF A SECURITY, THAT EACHWERE FORMERLY RESTRICTED SHARES PURSUANT TO SEC RULE 144,THAT THE SELLER WAS DEEMED TO OWN PURSUANT TO §242.200 ANDINTENDED TO DELIVER ONCE ALL RESTRICTIONS ON DELIVERY HAD BEENREMOVED, AND DID NOT CLOSE THE FAIL-TO-DELIVER POSITIONS BYPURCHASING OR BORROWING SECURITIES OFLIKE KIND AND QUANTITY WITHIN THE TIME FRAME PRESCRIBED BY SECRULE 204(A)(2).














Resolution:


Sanction Details: WITHOUT ADMITTING OR DENYING THE FINDINGS, THE FIRM CONSENTEDTO THE DESCRIBED SANCTIONS AND TO THE ENTRY OF FINDINGS;THEREFORE, THE FIRM IS CENSURED AND FINED $10,000. FINE PAID INFULL ON JANUARY 9, 2014.


No




Initiated By: FINRA


Allegations: SEC RULE 204(A)(2) - WILSON-DAVIS & CO., INC. HAD FAIL-TO-DELIVERPOSITIONS AT A REGISTERED CLEARING AGENCY IN TWO EQUITYSECURITIES THAT RESULTED FROM A SALE OF A SECURITY, THAT EACHWERE FORMERLY RESTRICTED SHARES PURSUANT TO SEC RULE 144,THAT THE SELLER WAS DEEMED TO OWN PURSUANT TO §242.200 ANDINTENDED TO DELIVER ONCE ALL RESTRICTIONS ON DELIVERY HAD BEENREMOVED, AND DID NOT CLOSE THE FAIL-TO-DELIVER POSITIONS BYPURCHASING OR BORROWING SECURITIES OF LIKE KIND AND QUANTITYWITHIN THE TIME FRAME PRESCRIBED BY SEC RULE 204(A)(2).










RELIEF SOUGHT





Resolution:


Sanction Details: WITHOUT ADMITTING OR DENYING THE FINDINGS, THE FIRM CONSENTEDTO THE DESCRIBED SANCTIONS AND TO THE ENTRY OF FINDINGS;THEREFORE, THE FIRM IS CENSURED AND FINED $10,000.



Disclosure 10 of 53

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Initiated By: FINRA







Allegations: FINRA RULE 6460 - WILSON-DAVIS & CO., INC. FAILED TO PUBLISHIMMEDIATELY A BID OR OFFER THAT REFLECTED THE PRICE AND THEFULL SIZE OF CUSTOMER LIMIT ORDERS FOR OVER-THE-COUNTEREQUITY SECURITIES HELD BY THE FIRM THAT WERE AT A PRICE THATWOULD HAVE IMPROVED THE FIRM'S BID OR OFFER IN SUCH SECURITIES.


Resolution: Acceptance, Waiver & Consent(AWC) 35©2020 FINRA. All rights reserved. Report about WILSON-DAVIS & CO., INC.








Resolution:


Sanction Details: WITHOUT ADMITTING OR DENYING THE FINDINGS, THE FIRM CONSENTEDTO THE DESCRIBED SANCTIONS AND TO THE ENTRY OF FINDINGS;THEREFORE, THE FIRM IS CENSURED AND FINED $5,000. FINE PAID INFULL ON JANUARY 9, 2014.


No




Initiated By: FINRA


Other


RELIEF SOUGHT





Allegations: FINRA RULE 6460 - WILSON-DAVIS & CO., INC. FAILED TO PUBLISHIMMEDIATELY A BID OR OFFER THAT REFLECTED THE PRICE AND THEFULL SIZE OF CUSTOMER LIMIT ORDERS FOR OVER-THE-COUNTEREQUITY SECURITIES HELD BY THE FIRM THAT WERE AT A PRICE THATWOULD HAVE IMPROVED THE FIRM'S BID OR OFFER IN SUCH SECURITIES.



Resolution:












Disclosure 11 of 53

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Allegations: SEC RULES 10B-10, 17A-3, 17A-4, SEC RULE 605 OF REGULATION NMS,FINRA RULE 2010, NASD RULE 3010 - WILSON-DAVIS & CO., INC. FAILED TOPROVIDE, IN CONNECTION WITH TRANSACTIONS WHERE THE FIRM ACTEDAS PRINCIPAL, WRITTEN NOTIFICATION TO ITS CUSTOMERS THAT THEPRICE DISCLOSED ON THE CONFIRMATION WAS THE REPORTED TRADEPRICE OF THE TRANSACTIONS. THE FIRM FAILED TO PROVIDE WRITTENNOTIFICATION DISCLOSING TO ITS CUSTOMERS THAT THE TRANSACTIONWAS EXECUTED AT AN AVERAGE PRICE. THE FIRM, ON ONE OCCASIONWHEN IT ACTED AS PRINCIPAL FOR ITS ACCOUNT, FAILED TO PROVIDEWRITTEN NOTIFICATION DISCLOSING TO ITS CUSTOMER THE CORRECTREPORTED TRADE PRICE. THE FIRM INCORRECTLY MARKED SHORT SALEEXECUTIONS AS LONG ON THE TRADING LEDGER IN NUMEROUSINSTANCES. THE FIRM MADE AVAILABLE A REPORT ON THE COVEREDORDERS IN NATIONAL MARKET SYSTEM SECURITIES IT RECEIVED FOREXECUTION FROM ANY PERSON WHICH CONTAINED INCOMPLETEINFORMATION AS THE FIRM FAILED TO CLASSIFY AN ORDER IN SOMEINSTANCES. THE FIRM'S SUPERVISORY SYSTEM DID NOT PROVIDE FORSUPERVISION REASONABLY DESIGNED TO ACHIEVE COMPLIANCE WITHAPPLICABLE SECURITIES LAWS, REGULATIONS AND/OR FINRA RULESADDRESSING QUALITY OF MARKET TOPICS. THE FIRM'S WRITTENSUPERVISORY PROCEDURES (WSPS)FAILED TO PROVIDE FOR MINIMUMREQUIREMENTS FOR ADEQUATE WSPS IN ORDER HANDLING(DISCLOSURE OF ORDER ROUTING INFORMATION; MARKET ORDERS; ANDDISCLOSURE OF ORDER EXECUTION INFORMATION); SALETRANSACTIONS (PROMPT DELIVERY OF SALE TRANSACTIONS;REFRAINING FROM ACCEPTING SHORT SALE ORDERS W/O PRE-BORROWING; AND NAKED SHORT SELLING ANTI-FRAUD RULE); OTHERRULES (MONITORING ELECTRONIC COMMUNICATIONS); AND USE OFMULTIPLE MARKET PARTICIPANT IDENTIFIERS (MPIDS). THE FIRM FAILEDTO PROVIDE DOCUMENTARY EVIDENCE THAT IT PERFORMED THESUPERVISORY REVIEWS SET FORTH IN ITS WSPS CONCERNING:SUPERVISORY SYSTEM, PROCEDURES AND QUALIFICATIONS(REGISTRATION); ANTI-INTIMIDATION/COORDINATION (EDUCATINGPERSONNEL); SALE TRANSACTIONS (ORDER MARKING); OTHER TRADINGRULES (TRADING HALTS; ERRONEOUS TRADE FILINGS-CONTROLS ANDSUPERVISORY PROCESSES TO ENSURE ACCURACY AND INTEGRITY OFORDERS; ACCURATE AND APPROPRIATE CLEARLY ERRONEOUS TRADEFILINGS; AND DETECTION OF POTENTIAL ORDER ENTRY ERRORS); ANDOTHER RULES (SUB-PENNY ORDERS SMALLER THAN $.01 AND $.0001).







Initiated By: FINRA






Other Product Type(s): NATIONAL MARKET SYSTEM SECURITIES

SEC RULES 10B-10, 17A-3, 17A-4, SEC RULE 605 OF REGULATION NMS,FINRA RULE 2010, NASD RULE 3010 - WILSON-DAVIS & CO., INC. FAILED TOPROVIDE, IN CONNECTION WITH TRANSACTIONS WHERE THE FIRM ACTEDAS PRINCIPAL, WRITTEN NOTIFICATION TO ITS CUSTOMERS THAT THEPRICE DISCLOSED ON THE CONFIRMATION WAS THE REPORTED TRADEPRICE OF THE TRANSACTIONS. THE FIRM FAILED TO PROVIDE WRITTENNOTIFICATION DISCLOSING TO ITS CUSTOMERS THAT THE TRANSACTIONWAS EXECUTED AT AN AVERAGE PRICE. THE FIRM, ON ONE OCCASIONWHEN IT ACTED AS PRINCIPAL FOR ITS ACCOUNT, FAILED TO PROVIDEWRITTEN NOTIFICATION DISCLOSING TO ITS CUSTOMER THE CORRECTREPORTED TRADE PRICE. THE FIRM INCORRECTLY MARKED SHORT SALEEXECUTIONS AS LONG ON THE TRADING LEDGER IN NUMEROUSINSTANCES. THE FIRM MADE AVAILABLE A REPORT ON THE COVEREDORDERS IN NATIONAL MARKET SYSTEM SECURITIES IT RECEIVED FOREXECUTION FROM ANY PERSON WHICH CONTAINED INCOMPLETEINFORMATION AS THE FIRM FAILED TO CLASSIFY AN ORDER IN SOMEINSTANCES. THE FIRM'S SUPERVISORY SYSTEM DID NOT PROVIDE FORSUPERVISION REASONABLY DESIGNED TO ACHIEVE COMPLIANCE WITHAPPLICABLE SECURITIES LAWS, REGULATIONS AND/OR FINRA RULESADDRESSING QUALITY OF MARKET TOPICS. THE FIRM'S WRITTENSUPERVISORY PROCEDURES (WSPS)FAILED TO PROVIDE FOR MINIMUMREQUIREMENTS FOR ADEQUATE WSPS IN ORDER HANDLING(DISCLOSURE OF ORDER ROUTING INFORMATION; MARKET ORDERS; ANDDISCLOSURE OF ORDER EXECUTION INFORMATION); SALETRANSACTIONS (PROMPT DELIVERY OF SALE TRANSACTIONS;REFRAINING FROM ACCEPTING SHORT SALE ORDERS W/O PRE-BORROWING; AND NAKED SHORT SELLING ANTI-FRAUD RULE); OTHERRULES (MONITORING ELECTRONIC COMMUNICATIONS); AND USE OFMULTIPLE MARKET PARTICIPANT IDENTIFIERS (MPIDS). THE FIRM FAILEDTO PROVIDE DOCUMENTARY EVIDENCE THAT IT PERFORMED THESUPERVISORY REVIEWS SET FORTH IN ITS WSPS CONCERNING:SUPERVISORY SYSTEM, PROCEDURES AND QUALIFICATIONS(REGISTRATION); ANTI-INTIMIDATION/COORDINATION (EDUCATINGPERSONNEL); SALE TRANSACTIONS (ORDER MARKING); OTHER TRADINGRULES (TRADING HALTS; ERRONEOUS TRADE FILINGS-CONTROLS ANDSUPERVISORY PROCESSES TO ENSURE ACCURACY AND INTEGRITY OFORDERS; ACCURATE AND APPROPRIATE CLEARLY ERRONEOUS TRADEFILINGS; AND DETECTION OF POTENTIAL ORDER ENTRY ERRORS); ANDOTHER RULES (SUB-PENNY ORDERS SMALLER THAN $.01 AND $.0001).


Resolution:


Sanction Details: WITHOUT ADMITTING OR DENYING THE FINDINGS, THE FIRM CONSENTEDTO THE DESCRIBED SANCTIONS AND TO THE ENTRY OF FINDINGS;THEREFORE, THE FIRM IS CENSURED AND FINED $27,500. FINE PAID INFULL JULY 27, 2015.


No




Allegations: THE SEC 10B-10 CONFIRMATION ISSUE RELATED TO TRADE CONFIRMSFOR INDIVIDUAL, SINGLE TRADES STATING THAT THE TRADES WEREMADE AT AN AVERAGE PRICE. THUS, THE INFORMATION ON THECONFIRMATION WAS CORRECT IN REGARD TO PRICE, SHARES, TIME, ETC.BUT INCORRECTLY STATED THE SINGLE TRADE WAS AN AVERAGE PRICE.THIS WAS A TECHNICAL PROBLEM THAT WILSON-DAVIS HAD PREVIOUSLYADDRESSED BUT HAD RETURNED FOR SOME UNKNOWN REASON. IT HASBEEN FIXED.

THE ISSUE RELATED TO THE COVERED ORDERED REPORT WAS BASEDON A TECHNICAL ISSUE WHICH HAS BEEN ADDRESSED BY WILSON-DAVISTRADING PLATFORM PROVIDERS.

THE INCORRECT MARKING OF SHORT SALES AS LONG SALES RESULTEDFROM CERTAIN TRADERS ENTERING THE WRONG CODE INTO THETRADING SYSTEM; INSTRUCTION HAS BEEN PROVIDED TO THESETRADERS AND THE SITUATION SHOULD NOT OCCUR AGAIN.

THE WSPS HAVE BEEN UPDATED TO ADDRESS THE ISSUES RAISED BYTHE AUDIT.








Initiated By: FINRA


Other


RELIEF SOUGHT




Other Product Type(s): NATIONAL MARKET SYSTEM SECURITIES

THE SEC 10B-10 CONFIRMATION ISSUE RELATED TO TRADE CONFIRMSFOR INDIVIDUAL, SINGLE TRADES STATING THAT THE TRADES WEREMADE AT AN AVERAGE PRICE. THUS, THE INFORMATION ON THECONFIRMATION WAS CORRECT IN REGARD TO PRICE, SHARES, TIME, ETC.BUT INCORRECTLY STATED THE SINGLE TRADE WAS AN AVERAGE PRICE.THIS WAS A TECHNICAL PROBLEM THAT WILSON-DAVIS HAD PREVIOUSLYADDRESSED BUT HAD RETURNED FOR SOME UNKNOWN REASON. IT HASBEEN FIXED.

THE ISSUE RELATED TO THE COVERED ORDERED REPORT WAS BASEDON A TECHNICAL ISSUE WHICH HAS BEEN ADDRESSED BY WILSON-DAVISTRADING PLATFORM PROVIDERS.

THE INCORRECT MARKING OF SHORT SALES AS LONG SALES RESULTEDFROM CERTAIN TRADERS ENTERING THE WRONG CODE INTO THETRADING SYSTEM; INSTRUCTION HAS BEEN PROVIDED TO THESETRADERS AND THE SITUATION SHOULD NOT OCCUR AGAIN.

THE WSPS HAVE BEEN UPDATED TO ADDRESS THE ISSUES RAISED BYTHE AUDIT.


Resolution:


Sanction Details: SIGNED A AWC AND ACCEPTED A CENSURE AND MONETARY FINE OF$27,500.00. THE MONETARY FINE WAS DIVIDED BETWEEN THE ISSUE SETFORTH IN SECTION SEVEN ABOVE, AS FOLLOWS: $5,000 FOR THECONFIRMAITION ISSUE, $7,500 FOR BOOKS AND RECORDS, $10,000 FORDISCLOSURE OF ORDER EXECUTION; AND $5,000 FOR REVISIONS TO THEWSP.



Disclosure 12 of 53

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Disclosure 12 of 53


Allegations: SEC RULE 605 OF REGULATION NMS, FINRA RULE 2010, 7450, NASD RULE3010: THE FIRM FAILED IN 11 INSTANCES TO SUBMIT A PROPRIETARYORDER IN A NON-MARKET MAKING SECURITY TO THE ORDER AUDIT TRAILSYSTEM (OATS); FAILED IN SIX INSTANCES TO SUBMIT THE CORRECTACCOUNT TYPE CODE "E" TO OATS; AND FAILED IN FIVE INSTANCES TOSUBMIT THE CORRECT ORDER RECEIPT TIME TO OATS. THE FIRM MADEAVAILABLE A REPORT ON THE COVERED ORDERS IN NATIONAL MARKETSYSTEM SECURITIES THAT IT RECEIVED FOR EXECUTION FROM ANYPERSON. THIS REPORT INCLUDED INCORRECT INFORMATION AS TOAVERAGE REALIZED AND EFFECTIVE SPREADS AND OUTSIDE THE QUOTEAVERAGE AMOUNT AND TIME. THE FIRM'S SUPERVISORY SYSTEM DID NOTPROVIDE FOR SUPERVISION REASONABLY DESIGNED TO ACHIEVECOMPLIANCE WITH RESPECT TO CERTAIN APPLICABLE SECURITIES LAWSAND REGULATIONS, AND/OR THE RULES OF NASD. AT A MINIMUM,ADEQUATE WRITTEN SUPERVISORY PROCEDURES ADDRESSING QUALITYOF MARKETS TOPICS SHOULD DESCRIBE THE FOLLOWING: SPECIFICIDENTIFICATION OF THE INDIVIDUAL(S) RESPONSIBLE FOR SUPERVISION;THE SUPERVISORY STEPS AND REVIEWS TO BE TAKEN BY THEAPPROPRIATE SUPERVISOR; THE FREQUENCY OF SUCH REVIEWS; ANDHOW SUCH REVIEWS SHALL BE DOCUMENTED. THE FIRM'S WRITTENSUPERVISORY PROCEDURES FAILED TO PROVIDE FOR ONE OR MORE OFTHE ABOVE-CITED MINIMUM REQUIREMENTS FOR ADEQUATE WRITTENSUPERVISORY PROCEDURES, IN THE FOLLOWING SUBJECT AREAS:ORDER HANDLING (DISCLOSURE OF ORDER ROUTING INFORMATION ANDORDER EXECUTION INFORMATION) AND SHORT SALES (PROMPTDELIVERY OF SALE TRANSACTIONS BY SETTLEMENT DATE, REPORTINGACCURATE SHORT SALE INDICATORS, ACCEPTING SHORT SALE ORDERSUNDER SEC RULE 204T OF REGULATION SHO, AND NAKED SHORTSELLING ANTI-FRAUD RULE); AND BOOKS AND RECORDS, USE OFMULTIPLE MARKET PARTICIPANT IDENTIFIERS, AND SUB-PENNY PRICEINCREMENTS. THE FIRM FAILED TO PROVIDE DOCUMENTARY EVIDENCETHAT ON THE TRADE DATE(S) REVIEWED IN THE TRADING AND MARKETMAKING SURVEILLANCE (TMMS) EXAMINATION IT PERFORMED THESUPERVISORY REVIEWS SET FORTH IN ITS WRITTEN SUPERVISORYPROCEDURES CONCERNING SHORT SALES (ORDER MARKINGREQUIREMENTS, PROMPT DELIVERY OF SALE TRANSACTIONS BYSETTLEMENT DATE, ACCEPTING SHORT SALE ORDERS UNDER SEC RULE204T OF REGULATION SHO, AND NAKED SHORT SELLING ANTI-FRAUDRULE), TRADING HALTS, OATS (ACCURACY AND TIMELINESS OF OATSDATA, OATS INFORMATION IS CONSISTENT WITH INFORMATIONSUBMITTED TO A TRADE REPORTING FACILITY, REJECTED OATS DATA,AND ROUTED ORDER IDENTIFICATION NUMBERS ARE CONSISTENT WITHNUMBERS FROM SENDING/RECEIVING MEMBER), AND ORDER HANDLING(DISCLOSURE OF ORDER ROUTING INFORMATION AND ORDEREXECUTION INFORMATION).







Initiated By: FINRA


Other


N/A




Other Product Type(s): UNSPECIFIED SECURITIES

SEC RULE 605 OF REGULATION NMS, FINRA RULE 2010, 7450, NASD RULE3010: THE FIRM FAILED IN 11 INSTANCES TO SUBMIT A PROPRIETARYORDER IN A NON-MARKET MAKING SECURITY TO THE ORDER AUDIT TRAILSYSTEM (OATS); FAILED IN SIX INSTANCES TO SUBMIT THE CORRECTACCOUNT TYPE CODE "E" TO OATS; AND FAILED IN FIVE INSTANCES TOSUBMIT THE CORRECT ORDER RECEIPT TIME TO OATS. THE FIRM MADEAVAILABLE A REPORT ON THE COVERED ORDERS IN NATIONAL MARKETSYSTEM SECURITIES THAT IT RECEIVED FOR EXECUTION FROM ANYPERSON. THIS REPORT INCLUDED INCORRECT INFORMATION AS TOAVERAGE REALIZED AND EFFECTIVE SPREADS AND OUTSIDE THE QUOTEAVERAGE AMOUNT AND TIME. THE FIRM'S SUPERVISORY SYSTEM DID NOTPROVIDE FOR SUPERVISION REASONABLY DESIGNED TO ACHIEVECOMPLIANCE WITH RESPECT TO CERTAIN APPLICABLE SECURITIES LAWSAND REGULATIONS, AND/OR THE RULES OF NASD. AT A MINIMUM,ADEQUATE WRITTEN SUPERVISORY PROCEDURES ADDRESSING QUALITYOF MARKETS TOPICS SHOULD DESCRIBE THE FOLLOWING: SPECIFICIDENTIFICATION OF THE INDIVIDUAL(S) RESPONSIBLE FOR SUPERVISION;THE SUPERVISORY STEPS AND REVIEWS TO BE TAKEN BY THEAPPROPRIATE SUPERVISOR; THE FREQUENCY OF SUCH REVIEWS; ANDHOW SUCH REVIEWS SHALL BE DOCUMENTED. THE FIRM'S WRITTENSUPERVISORY PROCEDURES FAILED TO PROVIDE FOR ONE OR MORE OFTHE ABOVE-CITED MINIMUM REQUIREMENTS FOR ADEQUATE WRITTENSUPERVISORY PROCEDURES, IN THE FOLLOWING SUBJECT AREAS:ORDER HANDLING (DISCLOSURE OF ORDER ROUTING INFORMATION ANDORDER EXECUTION INFORMATION) AND SHORT SALES (PROMPTDELIVERY OF SALE TRANSACTIONS BY SETTLEMENT DATE, REPORTINGACCURATE SHORT SALE INDICATORS, ACCEPTING SHORT SALE ORDERSUNDER SEC RULE 204T OF REGULATION SHO, AND NAKED SHORTSELLING ANTI-FRAUD RULE); AND BOOKS AND RECORDS, USE OFMULTIPLE MARKET PARTICIPANT IDENTIFIERS, AND SUB-PENNY PRICEINCREMENTS. THE FIRM FAILED TO PROVIDE DOCUMENTARY EVIDENCETHAT ON THE TRADE DATE(S) REVIEWED IN THE TRADING AND MARKETMAKING SURVEILLANCE (TMMS) EXAMINATION IT PERFORMED THESUPERVISORY REVIEWS SET FORTH IN ITS WRITTEN SUPERVISORYPROCEDURES CONCERNING SHORT SALES (ORDER MARKINGREQUIREMENTS, PROMPT DELIVERY OF SALE TRANSACTIONS BYSETTLEMENT DATE, ACCEPTING SHORT SALE ORDERS UNDER SEC RULE204T OF REGULATION SHO, AND NAKED SHORT SELLING ANTI-FRAUDRULE), TRADING HALTS, OATS (ACCURACY AND TIMELINESS OF OATSDATA, OATS INFORMATION IS CONSISTENT WITH INFORMATIONSUBMITTED TO A TRADE REPORTING FACILITY, REJECTED OATS DATA,AND ROUTED ORDER IDENTIFICATION NUMBERS ARE CONSISTENT WITHNUMBERS FROM SENDING/RECEIVING MEMBER), AND ORDER HANDLING(DISCLOSURE OF ORDER ROUTING INFORMATION AND ORDEREXECUTION INFORMATION).


Resolution:


Sanction Details: WITHOUT ADMITTING OR DENYING THE FINDINGS, THE FIRM CONSENTEDTO THE DESCRIBED SANCTIONS AND TO THE ENTRY OF FINDINGS;THEREFORE IT IS CENSURED, FINED $22,000 AND UNDERTAKES TOREVISE THE FIRM'S WRITTEN SUPERVISORY PROCEDURES WITHRESPECT TO THE AREAS DESCRIBED ABOVE. WITHIN 30 BUSINESS DAYSOF ACCEPTANCE OF THE AWC BY THE NATIONAL ADJUDICATORY COUNCIL(NAC), A REGISTERED PRINCIPAL OF THE FIRM SHALL SUBMIT TO FINRA ASIGNED, DATED LETTER, OR AN EMAIL FROM A WORK-RELATED ACCOUNTOF THE REGISTERED PRINCIPAL, PROVIDING THE FOLLOWINGINFORMATION: A REFERENCE TO THIS MATTER; A REPRESENTATION THATTHE FIRM HAS REVISED ITS WRITTEN SUPERVISORY PROCEDURES TOADDRESS THE DEFICIENCIES DESCRIBED; AND THE DATE THE REVISEDPROCEDURES WERE IMPLEMENTED.

FINE PAID IN FULL AUGUST 25, 2014.


No









WITHOUT ADMITTING OR DENYING THE FINDINGS, THE FIRM CONSENTEDTO THE DESCRIBED SANCTIONS AND TO THE ENTRY OF FINDINGS;THEREFORE IT IS CENSURED, FINED $22,000 AND UNDERTAKES TOREVISE THE FIRM'S WRITTEN SUPERVISORY PROCEDURES WITHRESPECT TO THE AREAS DESCRIBED ABOVE. WITHIN 30 BUSINESS DAYSOF ACCEPTANCE OF THE AWC BY THE NATIONAL ADJUDICATORY COUNCIL(NAC), A REGISTERED PRINCIPAL OF THE FIRM SHALL SUBMIT TO FINRA ASIGNED, DATED LETTER, OR AN EMAIL FROM A WORK-RELATED ACCOUNTOF THE REGISTERED PRINCIPAL, PROVIDING THE FOLLOWINGINFORMATION: A REFERENCE TO THIS MATTER; A REPRESENTATION THATTHE FIRM HAS REVISED ITS WRITTEN SUPERVISORY PROCEDURES TOADDRESS THE DEFICIENCIES DESCRIBED; AND THE DATE THE REVISEDPROCEDURES WERE IMPLEMENTED.

FINE PAID IN FULL AUGUST 25, 2014.


Initiated By: FINRA


Other


FINE - UNDERTAKING





Allegations: THERE WERE ESSENTIALLY THREE ALLEGATIONS. THE FIRST ISSUE WASTHAT CERTAIN INFORMACTION PROVIDED TO THE OATS SYSTEM WAS NOTCOMPLETELY ACCURATE, SUCH AS THE TIME THE TRADE WAS MADE ORWHETHER THE TRADE WAS AN AGENCY TRADE FOR A CUSTOMER OR APROPRIETARY TRADE FOR THE FIRM. THESE ISSUES STEMMEDPRIMARILY FROM TECHNICAL ISSUES WITH THE TRADING SYSTEM. THESECOND ISSUE RELATED TO CERTAIN REPORTS PROVIDED UNDER NMS605, WHICH INCLUDED INCORRECT INFORMATION AS TO REALIZED ANDEFFECTIVE SPREADS AND THE OUTSIDE QUOTE AVERAGE AND TIME.THIS WAS LIKEWISE A TECHNICAL ISSUE. THE FIRM HAS WORKEDDILIGENLTY WITH THE TRADING SYSTEM PROVIDER AND HAS BEENADVISED AND BELIEVES THAT THE FIRST AND SECOND ISSUES HAVEBEEN RESOLVED. THE FIRM HAS ALSO PUT PROCEDURES IN PLACE TOHELP VERIFY INFORMATION BEING SUBMITTED. THE FINAL ISSUERELATED TO WILSON-DAVIS' LENGHTY WRITTEN SUPERVISORYPROCEDURES, RELATING PRIMARILY TO AREAS WHERE ADDITIONAL TEXTNEEDED TO BE INCLUDED AND ALSO TO WHERE EVIDENCE WASALLEGEDLY NOT PROVIDED TO AUDITORS FOR THE 2009 AUDIT. THE FIRMHAS REVISED ITS PROCEDURES TO ADDRESS THESE ISSUES.



Resolution:











Sanction Details: WITHOUT ADMITTING OR DENYING THE FINDINGS, THE FIRM CONSENTEDTO THE DESCRIBED SANCTIONS AND TO THE ENTRY OF FINDINGS;THEREFORE IT IS CENSURED, FINED $22,000 AND UNDERTAKES TOREVISE THE FIRM'S WRITTEN SUPERVISORY PROCEDURES WITHRESPECT TO THE AREAS DESCRIBED ABOVE. WITHIN 30 BUSINESS DAYSOF ACCEPTANCE OF THE AWC BY THE NATIONAL ADJUDICATORY COUNCIL(NAC), A REGISTERED PRINCIPAL OF THE FIRM SHALL SUBMIT TO FINRA ASIGNED, DATED LETTER, OR AN EMAIL FROM A WORK-RELATED ACCOUNTOF THE REGISTERED PRINCIPAL, PROVIDING THE FOLLOWINGINFORMATION: A REFERENCE TO THIS MATTER; A REPRESENTATION THATTHE FIRM HAS REVISED ITS WRITTEN SUPERVISORY PROCEDURES TOADDRESS THE DEFICIENCIES DESCRIBED; AND THE DATE THE REVISEDPROCEDURES WERE IMPLEMENTED

Firm Statement THE ABOVE HAS BEEN IMPLEMENTED AND COMPLETED.

Disclosure 13 of 53

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Initiated By: FINRA





Allegations: SEC RULE 10B-10, NASD RULES 2110, 3010 - WILSON-DAVIS & CO., INC.FAILED TO PREPARE ACCURATE CUSTOMER CONFIRMATIONS; THE FIRMFAILED TO PROVIDE WRITTEN NOTIFICATION DISCLOSING TO ITSCUSTOMER THAT TRANSACTIONS WERE EXECUTED AT AN AVERAGEPRICE AND ON ONE OCCASION, FAILED TO PROVIDE WRITTENNOTIFICATION DISCLOSING TO ITS CUSTOMER THE CORRECT PRICE ANDTHAT THE TRANSACTION WAS EXECUTED AT AN AVERAGE PRICE. THEFIRM FAILED TO PROVIDE DOCUMENTARY EVIDENCE THAT IT PERFORMEDTHE SUPERVISORY REVIEWS SET FORTH IN ITS WRITTEN SUPERVISORYPROCEDURES CONCERNING TRADE REPORTING (TRADES REPORTED ONITS BEHALF), SHORT SALES (LONG/SHORT ORDER MARKINGREQUIREMENTS), TRADING HALTS, BOOKS AND RECORDS, ORDERHANDLING (DISCLOSURE OF ORDER ROUTING INFORMATION), ANDORDER AUDIT TRAIL SYSTEM (OATS) (ACCURATE AND TIMELYSUBMISSIONS, CONSISTENCY BETWEEN OATS AND TRADE REPORTINGFACILITY REPORTING AND ROUTED ORDER IDS).












Resolution:


Sanction Details: WITHOUT ADMITTING OR DENYING THE FINDINGS, THE FIRM CONSENTEDTO THE DESCRIBED SANCTIONS AND TO THE ENTRY OF FINDINGS;THEREFORE, THE FIRM IS CENSURED AND FINED $10,000. FINE PAID INFULL ON MARCH 19, 2012.


No




Allegations: SEC RULE 10B-10, NASD RULES 2110, 3010 - WILSON-DAVIS & CO., INC.FAILED TO PREPARE ACCURATE CUSTOMER CONFIRMATIONS; THE FIRMFAILED TO PROVIDE WRITTEN NOTIFICATION DISCLOSING TO ITSCUSTOMER THAT TRANSACTIONS WERE EXECUTED AT AN AVERAGEPRICE AND ON ONE OCCASION, FAILED TO PROVIDE WRITTENNOTIFICATION DISCLOSING TO ITS CUSTOMER THE CORRECT PRICE ANDTHAT THE TRANSACTION WAS EXECUTED AT AN AVERAGE PRICE. THEFIRM FAILED TO PROVIDE DOCUMENTARY EVIDENCE THAT IT PERFORMEDTHE SUPERVISORY REVIEWS SET FORTH IN ITS WRITTEN SUPERVISORYPROCEDURES CONCERNING TRADE REPORTING (TRADES REPORTED ONITS BEHALF), SHORT SALES (LONG/SHORT ORDER MARKINGREQUIREMENTS), TRADING HALTS, BOOKS AND RECORDS, ORDERHANDLING (DISCLOSURE OF ORDER ROUTING INFORMATION), ANDORDER AUDIT TRAIL SYSTEMS (OATS) (ACCURATE AND TIMELYSUBMISSIONS, CONSISTENCY BETWEEN OATS AND TRADE REPORTINGFACILITY REPORTING AND ROUTED ORDER IDS).







Initiated By: FINRA


Censure







Resolution:





Disclosure 14 of 53

i


Allegations: SECTION 5 OF THE SECURITIES ACT OF 1933, NASD RULES 2110, 3010(A),3010(B): BETWEEN JANUARY AND NOVEMBER 2006, THE FIRM AND AREGISTERED REPRESENTATIVE OF THE FIRM SOLD MORE THAN TWOMILLION UNREGISTERED SHARES OF AN ENTITY, A THINLY TRADEDBULLETIN BOARD SECURITY, INTO THE PUBLIC MARKETS ON BEHALF OFNUMEROUS CUSTOMERS. THE SALES, WHICH RESULTED IN PROCEEDSOF ALMOST $2.9 MILLION TO THE CUSTOMERS AND COMMISSIONS OFAPPROXIMATELY $177,000 TO THE FIRM, CONSTITUTED ANUNREGISTERED DISTRIBUTION OF AN ENTITY SHARES IN VIOLATION OFSECTION 5 OF THE SECURITIES ACT OF 1933. THE FIRM AND ITSREGISTERED PRINCIPAL, WHO WAS RESPONSIBLE FOR SUPERVISING THEFIRM'S REGISTERED REPRESENTATIVE SALES FORCE, FAILED TOREASONABLY SUPERVISE THE REGISTERED REPRESENTATIVEADEQUATELY IN CONNECTION WITH THE SALES OF UNREGISTEREDSECURITIES. THE FIRM AND ITS PRINCIPAL FAILED TO TAKE ADEQUATEMEASURES TO REASONABLY SUPERVISE THE REGISTEREDREPRESENTATIVE AND INSTEAD ALLOWED THE REGISTEREDREPRESENTATIVE TO ENGAGE SALES OF UNREGISTERED SECURITIESWITHOUT ADEQUATE SUPERVISION. THE FIRM AND ITS PRINCIPAL HADACCESS TO INFORMATION, FROM DOCUMENTS THAT THEY RECEIVEDAND/OR REVIEWED OR SHOULD HAVE REVIEWED, SHOWING THATNUMEROUS OF THE FIRM'S CUSTOMERS WERE RECEIVING AND SELLINGLARGE QUANTITIES OF UNREGISTERED SECURITIES OF AN ENTITY, ATHINLY TRADED BULLETIN BOARD SECURITY. THE ACCOUNTS HANDLEDBY THE REGISTERED REPRESENTATIVE PRESENTED NUMEROUS REDFLAGS THAT AN ILLEGAL UNREGISTERED DISTRIBUTION WAS UNDERWAY.THE RED FLAGS INCLUDED THAT THE ENTITY WAS A LITTLE-KNOWNDEVELOPMENT STAGE ISSUER WITH A SHORT OPERATING HISTORY, HADRECENTLY UNDERGONE A REVERSE MERGER, FORWARD STOCK SPLITAND A NAME CHANGE, WAS THINLY TRADED IN THE OVER-THE-COUNTERMARKET AND HAD LITTLE OR NO TRADING ACTIVITY PRIOR TO THEACTIVITY ALLEGED IN THE COMPLAINT. IN ADDITION, NUMEROUSACCOUNTS CONTROLLED OR REFERRED BY ONE CUSTOMER HADDEPOSITED MILLIONS OF UNREGISTERED SHARES OF THE ENTITY INTOACCOUNTS AT THE FIRM, IN THE FORM OF NEWLY ISSUED CERTIFICATES,AND AFTER RECEIVING THE SHARES, NUMEROUS ACCOUNTS OF THEFIRM BEGAN SELLING THEM INTO OPEN MARKET OR TRANSFERRINGTHEM TO OTHER NEWLY-OPENED ACCOUNTS OF THE FIRM. THESE REDFLAGS SHOULD HAVE LED THE FIRM AND THE PRINCIPAL TO SUPERVISETHE REGISTERED REPRESENTATIVE MORE CLOSELY TO ENSURE HISACTIVITIES COMPLIED WITH THE REQUIREMENTS OF SECTION 5 OF THESECURITIES ACT AND THAT HE WAS NOT FACILITATING AN ILLEGALUNREGISTERED DISTRIBUTION THROUGH ACTIVITY CONDUCTEDTHROUGH THE FIRM. DESPITE NUMEROUS RED FLAGS SUGGESTING THESALES WERE PART OF AN ILLEGAL DISTRIBUTION, THE FIRM AND THEREGISTERED REPRESENTATIVE PARTICIPATED IN THE SALES AND FAILEDTO TAKE STEPS NECESSARY TO DETERMINE WHETHER THE SHARESCOULD BE SOLD WITHOUT VIOLATING SECTION 5 OF THE SECURITIESACT. THE PRINCIPAL AND THE FIRM FAILED TO ESTABLISH, MAINTAIN, ANDENFORCE A SUPERVISORY SYSTEM, INCLUDING WRITTEN PROCEDURES,REASONABLY DESIGNED TO ACHIEVE COMPLIANCE WITH THEREQUIREMENTS OF FINRA RULES AND THE FEDERAL SECURITIES LAWSCONCERNING THE SALES OF UNREGISTERED SECURITIES; AND FAILEDTO ESTABLISH A SUPERVISORY SYSTEM THAT WAS REASONABLYDESIGNED TO ENSURE THAT REGISTERED REPRESENTATIVES OR ANYOTHER FIRM PERSONNEL DETERMINED WHETHER SHARES OF STOCKDEPOSITED IN CUSTOMER ACCOUNTS WERE REGISTERED OR BEINGSOLD IN TRANSACTIONS THAT WERE EXEMPT FROM REGISTRATION, OROTHERWISE DETERMINE WHETHER SHARES IN CUSTOMER ACCOUNTSWERE BEING SOLD IN COMPLIANCE WITH SECTION 5 OF THE SECURITIESACT OF 1933.








SECTION 5 OF THE SECURITIES ACT OF 1933, NASD RULES 2110, 3010(A),3010(B): BETWEEN JANUARY AND NOVEMBER 2006, THE FIRM AND AREGISTERED REPRESENTATIVE OF THE FIRM SOLD MORE THAN TWOMILLION UNREGISTERED SHARES OF AN ENTITY, A THINLY TRADEDBULLETIN BOARD SECURITY, INTO THE PUBLIC MARKETS ON BEHALF OFNUMEROUS CUSTOMERS. THE SALES, WHICH RESULTED IN PROCEEDSOF ALMOST $2.9 MILLION TO THE CUSTOMERS AND COMMISSIONS OFAPPROXIMATELY $177,000 TO THE FIRM, CONSTITUTED ANUNREGISTERED DISTRIBUTION OF AN ENTITY SHARES IN VIOLATION OFSECTION 5 OF THE SECURITIES ACT OF 1933. THE FIRM AND ITSREGISTERED PRINCIPAL, WHO WAS RESPONSIBLE FOR SUPERVISING THEFIRM'S REGISTERED REPRESENTATIVE SALES FORCE, FAILED TOREASONABLY SUPERVISE THE REGISTERED REPRESENTATIVEADEQUATELY IN CONNECTION WITH THE SALES OF UNREGISTEREDSECURITIES. THE FIRM AND ITS PRINCIPAL FAILED TO TAKE ADEQUATEMEASURES TO REASONABLY SUPERVISE THE REGISTEREDREPRESENTATIVE AND INSTEAD ALLOWED THE REGISTEREDREPRESENTATIVE TO ENGAGE SALES OF UNREGISTERED SECURITIESWITHOUT ADEQUATE SUPERVISION. THE FIRM AND ITS PRINCIPAL HADACCESS TO INFORMATION, FROM DOCUMENTS THAT THEY RECEIVEDAND/OR REVIEWED OR SHOULD HAVE REVIEWED, SHOWING THATNUMEROUS OF THE FIRM'S CUSTOMERS WERE RECEIVING AND SELLINGLARGE QUANTITIES OF UNREGISTERED SECURITIES OF AN ENTITY, ATHINLY TRADED BULLETIN BOARD SECURITY. THE ACCOUNTS HANDLEDBY THE REGISTERED REPRESENTATIVE PRESENTED NUMEROUS REDFLAGS THAT AN ILLEGAL UNREGISTERED DISTRIBUTION WAS UNDERWAY.THE RED FLAGS INCLUDED THAT THE ENTITY WAS A LITTLE-KNOWNDEVELOPMENT STAGE ISSUER WITH A SHORT OPERATING HISTORY, HADRECENTLY UNDERGONE A REVERSE MERGER, FORWARD STOCK SPLITAND A NAME CHANGE, WAS THINLY TRADED IN THE OVER-THE-COUNTERMARKET AND HAD LITTLE OR NO TRADING ACTIVITY PRIOR TO THEACTIVITY ALLEGED IN THE COMPLAINT. IN ADDITION, NUMEROUSACCOUNTS CONTROLLED OR REFERRED BY ONE CUSTOMER HADDEPOSITED MILLIONS OF UNREGISTERED SHARES OF THE ENTITY INTOACCOUNTS AT THE FIRM, IN THE FORM OF NEWLY ISSUED CERTIFICATES,AND AFTER RECEIVING THE SHARES, NUMEROUS ACCOUNTS OF THEFIRM BEGAN SELLING THEM INTO OPEN MARKET OR TRANSFERRINGTHEM TO OTHER NEWLY-OPENED ACCOUNTS OF THE FIRM. THESE REDFLAGS SHOULD HAVE LED THE FIRM AND THE PRINCIPAL TO SUPERVISETHE REGISTERED REPRESENTATIVE MORE CLOSELY TO ENSURE HISACTIVITIES COMPLIED WITH THE REQUIREMENTS OF SECTION 5 OF THESECURITIES ACT AND THAT HE WAS NOT FACILITATING AN ILLEGALUNREGISTERED DISTRIBUTION THROUGH ACTIVITY CONDUCTEDTHROUGH THE FIRM. DESPITE NUMEROUS RED FLAGS SUGGESTING THESALES WERE PART OF AN ILLEGAL DISTRIBUTION, THE FIRM AND THEREGISTERED REPRESENTATIVE PARTICIPATED IN THE SALES AND FAILEDTO TAKE STEPS NECESSARY TO DETERMINE WHETHER THE SHARESCOULD BE SOLD WITHOUT VIOLATING SECTION 5 OF THE SECURITIESACT. THE PRINCIPAL AND THE FIRM FAILED TO ESTABLISH, MAINTAIN, ANDENFORCE A SUPERVISORY SYSTEM, INCLUDING WRITTEN PROCEDURES,REASONABLY DESIGNED TO ACHIEVE COMPLIANCE WITH THEREQUIREMENTS OF FINRA RULES AND THE FEDERAL SECURITIES LAWSCONCERNING THE SALES OF UNREGISTERED SECURITIES; AND FAILEDTO ESTABLISH A SUPERVISORY SYSTEM THAT WAS REASONABLYDESIGNED TO ENSURE THAT REGISTERED REPRESENTATIVES OR ANYOTHER FIRM PERSONNEL DETERMINED WHETHER SHARES OF STOCKDEPOSITED IN CUSTOMER ACCOUNTS WERE REGISTERED OR BEINGSOLD IN TRANSACTIONS THAT WERE EXEMPT FROM REGISTRATION, OROTHERWISE DETERMINE WHETHER SHARES IN CUSTOMER ACCOUNTSWERE BEING SOLD IN COMPLIANCE WITH SECTION 5 OF THE SECURITIESACT OF 1933.






Initiated By: FINRA


Other


N/A




Other Product Type(s): UNREGISTERED SECURITIES / THINLY TRADED BULLETIN BOARDSECURITY

SECTION 5 OF THE SECURITIES ACT OF 1933, NASD RULES 2110, 3010(A),3010(B): BETWEEN JANUARY AND NOVEMBER 2006, THE FIRM AND AREGISTERED REPRESENTATIVE OF THE FIRM SOLD MORE THAN TWOMILLION UNREGISTERED SHARES OF AN ENTITY, A THINLY TRADEDBULLETIN BOARD SECURITY, INTO THE PUBLIC MARKETS ON BEHALF OFNUMEROUS CUSTOMERS. THE SALES, WHICH RESULTED IN PROCEEDSOF ALMOST $2.9 MILLION TO THE CUSTOMERS AND COMMISSIONS OFAPPROXIMATELY $177,000 TO THE FIRM, CONSTITUTED ANUNREGISTERED DISTRIBUTION OF AN ENTITY SHARES IN VIOLATION OFSECTION 5 OF THE SECURITIES ACT OF 1933. THE FIRM AND ITSREGISTERED PRINCIPAL, WHO WAS RESPONSIBLE FOR SUPERVISING THEFIRM'S REGISTERED REPRESENTATIVE SALES FORCE, FAILED TOREASONABLY SUPERVISE THE REGISTERED REPRESENTATIVEADEQUATELY IN CONNECTION WITH THE SALES OF UNREGISTEREDSECURITIES. THE FIRM AND ITS PRINCIPAL FAILED TO TAKE ADEQUATEMEASURES TO REASONABLY SUPERVISE THE REGISTEREDREPRESENTATIVE AND INSTEAD ALLOWED THE REGISTEREDREPRESENTATIVE TO ENGAGE SALES OF UNREGISTERED SECURITIESWITHOUT ADEQUATE SUPERVISION. THE FIRM AND ITS PRINCIPAL HADACCESS TO INFORMATION, FROM DOCUMENTS THAT THEY RECEIVEDAND/OR REVIEWED OR SHOULD HAVE REVIEWED, SHOWING THATNUMEROUS OF THE FIRM'S CUSTOMERS WERE RECEIVING AND SELLINGLARGE QUANTITIES OF UNREGISTERED SECURITIES OF AN ENTITY, ATHINLY TRADED BULLETIN BOARD SECURITY. THE ACCOUNTS HANDLEDBY THE REGISTERED REPRESENTATIVE PRESENTED NUMEROUS REDFLAGS THAT AN ILLEGAL UNREGISTERED DISTRIBUTION WAS UNDERWAY.THE RED FLAGS INCLUDED THAT THE ENTITY WAS A LITTLE-KNOWNDEVELOPMENT STAGE ISSUER WITH A SHORT OPERATING HISTORY, HADRECENTLY UNDERGONE A REVERSE MERGER, FORWARD STOCK SPLITAND A NAME CHANGE, WAS THINLY TRADED IN THE OVER-THE-COUNTERMARKET AND HAD LITTLE OR NO TRADING ACTIVITY PRIOR TO THEACTIVITY ALLEGED IN THE COMPLAINT. IN ADDITION, NUMEROUSACCOUNTS CONTROLLED OR REFERRED BY ONE CUSTOMER HADDEPOSITED MILLIONS OF UNREGISTERED SHARES OF THE ENTITY INTOACCOUNTS AT THE FIRM, IN THE FORM OF NEWLY ISSUED CERTIFICATES,AND AFTER RECEIVING THE SHARES, NUMEROUS ACCOUNTS OF THEFIRM BEGAN SELLING THEM INTO OPEN MARKET OR TRANSFERRINGTHEM TO OTHER NEWLY-OPENED ACCOUNTS OF THE FIRM. THESE REDFLAGS SHOULD HAVE LED THE FIRM AND THE PRINCIPAL TO SUPERVISETHE REGISTERED REPRESENTATIVE MORE CLOSELY TO ENSURE HISACTIVITIES COMPLIED WITH THE REQUIREMENTS OF SECTION 5 OF THESECURITIES ACT AND THAT HE WAS NOT FACILITATING AN ILLEGALUNREGISTERED DISTRIBUTION THROUGH ACTIVITY CONDUCTEDTHROUGH THE FIRM. DESPITE NUMEROUS RED FLAGS SUGGESTING THESALES WERE PART OF AN ILLEGAL DISTRIBUTION, THE FIRM AND THEREGISTERED REPRESENTATIVE PARTICIPATED IN THE SALES AND FAILEDTO TAKE STEPS NECESSARY TO DETERMINE WHETHER THE SHARESCOULD BE SOLD WITHOUT VIOLATING SECTION 5 OF THE SECURITIESACT. THE PRINCIPAL AND THE FIRM FAILED TO ESTABLISH, MAINTAIN, ANDENFORCE A SUPERVISORY SYSTEM, INCLUDING WRITTEN PROCEDURES,REASONABLY DESIGNED TO ACHIEVE COMPLIANCE WITH THEREQUIREMENTS OF FINRA RULES AND THE FEDERAL SECURITIES LAWSCONCERNING THE SALES OF UNREGISTERED SECURITIES; AND FAILEDTO ESTABLISH A SUPERVISORY SYSTEM THAT WAS REASONABLYDESIGNED TO ENSURE THAT REGISTERED REPRESENTATIVES OR ANYOTHER FIRM PERSONNEL DETERMINED WHETHER SHARES OF STOCKDEPOSITED IN CUSTOMER ACCOUNTS WERE REGISTERED OR BEINGSOLD IN TRANSACTIONS THAT WERE EXEMPT FROM REGISTRATION, OROTHERWISE DETERMINE WHETHER SHARES IN CUSTOMER ACCOUNTSWERE BEING SOLD IN COMPLIANCE WITH SECTION 5 OF THE SECURITIESACT OF 1933.


Resolution:


Sanction Details: WITHOUT ADMITTING OR DENYING THE ALLEGATIONS, THE FIRMCONSENTED TO THE DESCRIBED SANCTIONS AND TO THE ENTRY OFFINDINGS, THEREFORE THE FIRM IS CENSURED, FINED $75,269, $35,269OF WHICH REPRESENTS DISGORGEMENT OF THE FIRM'S PROFITS, ANDREQUIRED, WITHIN THIRTY DAYS CERTIFY TO FINRA THAT THE FIRM HASREVIEWED IT POLICIES, SYSTEMS AND PROCEDURES FOR THELIQUIDATION OF SECURITIES DELIVERED IN CERTIFICATE ORELECTRONIC FORM AND HAS DETERMINED THAT THEY ARE REASONABLYDESIGNED TO ACHIEVE COMPLIANCE WITH FINRA RULES AND THEFEDERAL SECURITIES LAWS.FINE PAID IN FULL ON OCTOBER 23, 2014.


No




Allegations: SEC SECTION 5 OF THE SECURITIES EXCHANGE ACT OF 1933, NASDRULES 2110, 3010(A), 3010(B): BETWEEN JANUARY AND NOVEMBER 2006,THE FIRM AND A REGISTERED REPRESENTATIVE OF THE FIRM SOLDMORE THAN TWO MILLION UNREGISTERED SHARES OF AN ENTITY, ATHINLY TRADED BULLETIN BOARD SECURITY, INTO THE PUBLIC MARKETSON BEHALF OF NUMEROUS CUSTOMERS. THE SALES, WHICH RESULTEDIN PROCEEDS OF ALMOST $2.9 MILLION TO THE CUSTOMERS ANDCOMMISSIONS OF APPROXIMATELY $177,000 TO THE FIRM, CONSTITUTEDAN UNREGISTERED DISTRIBUTION OF AN ENTITY SHARES IN VIOLATIONOF SECTION 5 OF THE SECURITIES ACT OF 1933. THE FIRM AND ITSREGISTERED PRINCIPAL, WHO WAS RESPONSIBLE FOR SUPERVISING THEFIRM'S REGISTERED REPRESENTATIVE SALES FORCE, FAILED TOREASONABLY SUPERVISE THE REGISTERED REPRESENTATIVEADEQUATELY IN CONNECTION WITH THE SALES OF UNREGISTEREDSECURITIES. THE FIRM AND ITS PRINCIPAL FAILED TO TAKE ADEQUATEMEASURES TO REASONABLY SUPERVISE THE REGISTEREDREPRESENTATIVE AND INSTEAD ALLOWED THE REGISTEREDREPRESENTATIVE TO ENGAGE SALES OF UNREGISTERED SECURITIESWITHOUT ADEQUATE SUPERVISION. THE FIRM AND ITS PRINCIPAL HADACCESS TO INFORMATION, FROM DOCUMENTS THAT THEY RECEIVEDAND/OR REVIEWED OR SHOULD HAVE REVIEWED, SHOWING THATNUMEROUS OF THE FIRM'S CUSTOMERS WERE RECEIVING AND SELLINGLARGE QUANTITIES OF UNREGISTERED SECURITIES OF AN ENTITY, ATHINLY TRADED BULLETIN BOARD SECURITY. THE ACCOUNTS HANDLEDBY THE REGISTERED REPRESENTATIVE PRESENTED NUMEROUS REDFLAGS THAT AN ILLEGAL UNREGISTERED DISTRIBUTION WAS UNDERWAY.THE RED FLAGS INCLUDED THAT THE ENTITY WAS A LITTLE-KNOWNDEVELOPMENT STAGE ISSUER WITH A SHORT OPERATING HISTORY, HADRECENTLY UNDERGONE A REVERSE MERGER, FORWARD STOCK SPLITAND A NAME CHANGE, WAS THINLY TRADED IN THE OVER-THE-COUNTERMARKET AND HAD LITTLE OR NO TRADING ACTIVITY PRIOR TO THEACTIVITY ALLEGED IN THE COMPLAINT. IN ADDITION, NUMEROUSACCOUNTS CONTROLLED OR REFERRED BY ONE CUSTOMER HADDEPOSITED MILLIONS OF UNREGISTERED SHARES OF THE ENTITY INTOACCOUNTS AT THE FIRM, IN THE FORM OF NEWLY ISSUED CERTIFICATES,AND AFTER RECEIVING THE SHARES, NUMEROUS ACCOUNTS OF THEFIRM BEGAN SELLING THEM INTO OPEN MARKET OR TRANSFERRINGTHEM TO OTHER NEWLY-OPENED ACCOUNTS OF THE FIRM. THESE REDFLAGS SHOULD HAVE LED THE FIRM AND THE PRINCIPAL TO SUPERVISETHE REGISTERED REPRESENTATIVE MORE CLOSELY TO ENSURE HISACTIVITIES COMPLIED WITH THE REQUIREMENTS OF SECTION 5 OF THESECURITIES ACT AND THAT HE WAS NOT FACILITATING AN ILLEGALUNREGISTERED DISTRIBUTION THROUGH ACTIVITY CONDUCTEDTHROUGH THE FIRM. DESPITE NUMEROUS RED FLAGS SUGGESTING THESALES WERE PART OF AN ILLEGAL DISTRIBUTION, THE FIRM AND THEREGISTERED REPRESENTATIVE PARTICIPATED IN THE SALES AND FAILEDTO TAKE STEPS NECESSARY TO DETERMINE WHETHER THE SHARESCOULD BE SOLD WITHOUT VIOLATING SECTION 5 OF THE SECURITIESACT. THE PRINCIPAL AND THE FIRM FAILED TO ESTABLISH, MAINTAIN, ANDENFORCE A SUPERVISORY SYSTEM, INCLUDING WRITTEN PROCEDURES,REASONABLY DESIGNED TO ACHIEVE COMPLIANCE WITH THEREQUIREMENTS OF FINRA RULES AND THE FEDERAL SECURITIES LAWSCONCERNING THE SALES OF UNREGISTERED SECURITIES; AND FAILEDTO ESTABLISH A SUPERVISORY SYSTEM THAT WAS REASONABLYDESIGNED TO ENSURE THAT REGISTERED REPRESENTATIVES OR ANYOTHER FIRM PERSONNEL DETERMINED WHETHER SHARES OF STOCKDEPOSITED IN CUSTOMER ACCOUNTS WERE REGISTERED OR BEINGSOLD IN TRANSACTIONS THAT WERE EXEMPT FROM REGISTRATION, OROTHERWISE DETERMINE WHETHER SHARES IN CUSTOMER ACCOUNTSWERE BEING SOLD IN COMPLIANCE WITH SECTION 5 OF THE SECURITIESACT.








Allegations: SEC SECTION 5 OF THE SECURITIES EXCHANGE ACT OF 1933, NASDRULES 2110, 3010(A), 3010(B): BETWEEN JANUARY AND NOVEMBER 2006,THE FIRM AND A REGISTERED REPRESENTATIVE OF THE FIRM SOLDMORE THAN TWO MILLION UNREGISTERED SHARES OF AN ENTITY, ATHINLY TRADED BULLETIN BOARD SECURITY, INTO THE PUBLIC MARKETSON BEHALF OF NUMEROUS CUSTOMERS. THE SALES, WHICH RESULTEDIN PROCEEDS OF ALMOST $2.9 MILLION TO THE CUSTOMERS ANDCOMMISSIONS OF APPROXIMATELY $177,000 TO THE FIRM, CONSTITUTEDAN UNREGISTERED DISTRIBUTION OF AN ENTITY SHARES IN VIOLATIONOF SECTION 5 OF THE SECURITIES ACT OF 1933. THE FIRM AND ITSREGISTERED PRINCIPAL, WHO WAS RESPONSIBLE FOR SUPERVISING THEFIRM'S REGISTERED REPRESENTATIVE SALES FORCE, FAILED TOREASONABLY SUPERVISE THE REGISTERED REPRESENTATIVEADEQUATELY IN CONNECTION WITH THE SALES OF UNREGISTEREDSECURITIES. THE FIRM AND ITS PRINCIPAL FAILED TO TAKE ADEQUATEMEASURES TO REASONABLY SUPERVISE THE REGISTEREDREPRESENTATIVE AND INSTEAD ALLOWED THE REGISTEREDREPRESENTATIVE TO ENGAGE SALES OF UNREGISTERED SECURITIESWITHOUT ADEQUATE SUPERVISION. THE FIRM AND ITS PRINCIPAL HADACCESS TO INFORMATION, FROM DOCUMENTS THAT THEY RECEIVEDAND/OR REVIEWED OR SHOULD HAVE REVIEWED, SHOWING THATNUMEROUS OF THE FIRM'S CUSTOMERS WERE RECEIVING AND SELLINGLARGE QUANTITIES OF UNREGISTERED SECURITIES OF AN ENTITY, ATHINLY TRADED BULLETIN BOARD SECURITY. THE ACCOUNTS HANDLEDBY THE REGISTERED REPRESENTATIVE PRESENTED NUMEROUS REDFLAGS THAT AN ILLEGAL UNREGISTERED DISTRIBUTION WAS UNDERWAY.THE RED FLAGS INCLUDED THAT THE ENTITY WAS A LITTLE-KNOWNDEVELOPMENT STAGE ISSUER WITH A SHORT OPERATING HISTORY, HADRECENTLY UNDERGONE A REVERSE MERGER, FORWARD STOCK SPLITAND A NAME CHANGE, WAS THINLY TRADED IN THE OVER-THE-COUNTERMARKET AND HAD LITTLE OR NO TRADING ACTIVITY PRIOR TO THEACTIVITY ALLEGED IN THE COMPLAINT. IN ADDITION, NUMEROUSACCOUNTS CONTROLLED OR REFERRED BY ONE CUSTOMER HADDEPOSITED MILLIONS OF UNREGISTERED SHARES OF THE ENTITY INTOACCOUNTS AT THE FIRM, IN THE FORM OF NEWLY ISSUED CERTIFICATES,AND AFTER RECEIVING THE SHARES, NUMEROUS ACCOUNTS OF THEFIRM BEGAN SELLING THEM INTO OPEN MARKET OR TRANSFERRINGTHEM TO OTHER NEWLY-OPENED ACCOUNTS OF THE FIRM. THESE REDFLAGS SHOULD HAVE LED THE FIRM AND THE PRINCIPAL TO SUPERVISETHE REGISTERED REPRESENTATIVE MORE CLOSELY TO ENSURE HISACTIVITIES COMPLIED WITH THE REQUIREMENTS OF SECTION 5 OF THESECURITIES ACT AND THAT HE WAS NOT FACILITATING AN ILLEGALUNREGISTERED DISTRIBUTION THROUGH ACTIVITY CONDUCTEDTHROUGH THE FIRM. DESPITE NUMEROUS RED FLAGS SUGGESTING THESALES WERE PART OF AN ILLEGAL DISTRIBUTION, THE FIRM AND THEREGISTERED REPRESENTATIVE PARTICIPATED IN THE SALES AND FAILEDTO TAKE STEPS NECESSARY TO DETERMINE WHETHER THE SHARESCOULD BE SOLD WITHOUT VIOLATING SECTION 5 OF THE SECURITIESACT. THE PRINCIPAL AND THE FIRM FAILED TO ESTABLISH, MAINTAIN, ANDENFORCE A SUPERVISORY SYSTEM, INCLUDING WRITTEN PROCEDURES,REASONABLY DESIGNED TO ACHIEVE COMPLIANCE WITH THEREQUIREMENTS OF FINRA RULES AND THE FEDERAL SECURITIES LAWSCONCERNING THE SALES OF UNREGISTERED SECURITIES; AND FAILEDTO ESTABLISH A SUPERVISORY SYSTEM THAT WAS REASONABLYDESIGNED TO ENSURE THAT REGISTERED REPRESENTATIVES OR ANYOTHER FIRM PERSONNEL DETERMINED WHETHER SHARES OF STOCKDEPOSITED IN CUSTOMER ACCOUNTS WERE REGISTERED OR BEINGSOLD IN TRANSACTIONS THAT WERE EXEMPT FROM REGISTRATION, OROTHERWISE DETERMINE WHETHER SHARES IN CUSTOMER ACCOUNTSWERE BEING SOLD IN COMPLIANCE WITH SECTION 5 OF THE SECURITIESACT.






Initiated By: FINRA







SEC SECTION 5 OF THE SECURITIES EXCHANGE ACT OF 1933, NASDRULES 2110, 3010(A), 3010(B): BETWEEN JANUARY AND NOVEMBER 2006,THE FIRM AND A REGISTERED REPRESENTATIVE OF THE FIRM SOLDMORE THAN TWO MILLION UNREGISTERED SHARES OF AN ENTITY, ATHINLY TRADED BULLETIN BOARD SECURITY, INTO THE PUBLIC MARKETSON BEHALF OF NUMEROUS CUSTOMERS. THE SALES, WHICH RESULTEDIN PROCEEDS OF ALMOST $2.9 MILLION TO THE CUSTOMERS ANDCOMMISSIONS OF APPROXIMATELY $177,000 TO THE FIRM, CONSTITUTEDAN UNREGISTERED DISTRIBUTION OF AN ENTITY SHARES IN VIOLATIONOF SECTION 5 OF THE SECURITIES ACT OF 1933. THE FIRM AND ITSREGISTERED PRINCIPAL, WHO WAS RESPONSIBLE FOR SUPERVISING THEFIRM'S REGISTERED REPRESENTATIVE SALES FORCE, FAILED TOREASONABLY SUPERVISE THE REGISTERED REPRESENTATIVEADEQUATELY IN CONNECTION WITH THE SALES OF UNREGISTEREDSECURITIES. THE FIRM AND ITS PRINCIPAL FAILED TO TAKE ADEQUATEMEASURES TO REASONABLY SUPERVISE THE REGISTEREDREPRESENTATIVE AND INSTEAD ALLOWED THE REGISTEREDREPRESENTATIVE TO ENGAGE SALES OF UNREGISTERED SECURITIESWITHOUT ADEQUATE SUPERVISION. THE FIRM AND ITS PRINCIPAL HADACCESS TO INFORMATION, FROM DOCUMENTS THAT THEY RECEIVEDAND/OR REVIEWED OR SHOULD HAVE REVIEWED, SHOWING THATNUMEROUS OF THE FIRM'S CUSTOMERS WERE RECEIVING AND SELLINGLARGE QUANTITIES OF UNREGISTERED SECURITIES OF AN ENTITY, ATHINLY TRADED BULLETIN BOARD SECURITY. THE ACCOUNTS HANDLEDBY THE REGISTERED REPRESENTATIVE PRESENTED NUMEROUS REDFLAGS THAT AN ILLEGAL UNREGISTERED DISTRIBUTION WAS UNDERWAY.THE RED FLAGS INCLUDED THAT THE ENTITY WAS A LITTLE-KNOWNDEVELOPMENT STAGE ISSUER WITH A SHORT OPERATING HISTORY, HADRECENTLY UNDERGONE A REVERSE MERGER, FORWARD STOCK SPLITAND A NAME CHANGE, WAS THINLY TRADED IN THE OVER-THE-COUNTERMARKET AND HAD LITTLE OR NO TRADING ACTIVITY PRIOR TO THEACTIVITY ALLEGED IN THE COMPLAINT. IN ADDITION, NUMEROUSACCOUNTS CONTROLLED OR REFERRED BY ONE CUSTOMER HADDEPOSITED MILLIONS OF UNREGISTERED SHARES OF THE ENTITY INTOACCOUNTS AT THE FIRM, IN THE FORM OF NEWLY ISSUED CERTIFICATES,AND AFTER RECEIVING THE SHARES, NUMEROUS ACCOUNTS OF THEFIRM BEGAN SELLING THEM INTO OPEN MARKET OR TRANSFERRINGTHEM TO OTHER NEWLY-OPENED ACCOUNTS OF THE FIRM. THESE REDFLAGS SHOULD HAVE LED THE FIRM AND THE PRINCIPAL TO SUPERVISETHE REGISTERED REPRESENTATIVE MORE CLOSELY TO ENSURE HISACTIVITIES COMPLIED WITH THE REQUIREMENTS OF SECTION 5 OF THESECURITIES ACT AND THAT HE WAS NOT FACILITATING AN ILLEGALUNREGISTERED DISTRIBUTION THROUGH ACTIVITY CONDUCTEDTHROUGH THE FIRM. DESPITE NUMEROUS RED FLAGS SUGGESTING THESALES WERE PART OF AN ILLEGAL DISTRIBUTION, THE FIRM AND THEREGISTERED REPRESENTATIVE PARTICIPATED IN THE SALES AND FAILEDTO TAKE STEPS NECESSARY TO DETERMINE WHETHER THE SHARESCOULD BE SOLD WITHOUT VIOLATING SECTION 5 OF THE SECURITIESACT. THE PRINCIPAL AND THE FIRM FAILED TO ESTABLISH, MAINTAIN, ANDENFORCE A SUPERVISORY SYSTEM, INCLUDING WRITTEN PROCEDURES,REASONABLY DESIGNED TO ACHIEVE COMPLIANCE WITH THEREQUIREMENTS OF FINRA RULES AND THE FEDERAL SECURITIES LAWSCONCERNING THE SALES OF UNREGISTERED SECURITIES; AND FAILEDTO ESTABLISH A SUPERVISORY SYSTEM THAT WAS REASONABLYDESIGNED TO ENSURE THAT REGISTERED REPRESENTATIVES OR ANYOTHER FIRM PERSONNEL DETERMINED WHETHER SHARES OF STOCKDEPOSITED IN CUSTOMER ACCOUNTS WERE REGISTERED OR BEINGSOLD IN TRANSACTIONS THAT WERE EXEMPT FROM REGISTRATION, OROTHERWISE DETERMINE WHETHER SHARES IN CUSTOMER ACCOUNTSWERE BEING SOLD IN COMPLIANCE WITH SECTION 5 OF THE SECURITIESACT.


Resolution:

Other Sanctions Ordered: WITHOUT ADMITTING OR DENYING THE ALLEGATIONS, DAVIS CONSENTEDTO THE DESCRIBED SANCTIONS AND ENTRY OF FINDINGS, THEREFOREHE IS FINED $15,000 AND SUSPENDED FROM ASSOCIATION WITH ANYFINRA MEMBER IN ANY PRINCIPAL CAPACITY FOR 45 DAYS. THESUSPENSION IS IN EFFECT NOVEMBER 7, 2011, THROUGH DECEMBER 21,2011.

Sanction Details: WITHOUT ADMITTING OR DENYING THE ALLEGATIONS, THE FIRMCONSENTED TO THE DESCRIBED SANCTIONS AND TO THE ENTRY OFFINDINGS, THEREFORE THE FIRM IS CENSURED, FINED $75,269, $35,269OF WHICH REPRESENTS DISGORGEMENT OF THE FIRM'S PROFITS, ANDREQUIRED, WITHIN THIRTY DAYS CERTIFY TO FINRA THAT THE FIRM HASREVIEWED IT POLICIES, SYSTEMS AND PROCEDURES FOR THELIQUIDATION OF SECURITIES DELIVERED IN CERTIFICATE ORELECTRONIC FORM AND HAS DETERMINED THAT THEY ARE REASONABLYDESIGNED TO ACHIEVE COMPLIANCE WITH FINRA RULES AND THEFEDERAL SECURITIES LAWS.

Sanctions Ordered: CensureMonetary/Fine $75,269.00Suspension








WITHOUT ADMITTING OR DENYING THE ALLEGATIONS, THE FIRMCONSENTED TO THE DESCRIBED SANCTIONS AND TO THE ENTRY OFFINDINGS, THEREFORE THE FIRM IS CENSURED, FINED $75,269, $35,269OF WHICH REPRESENTS DISGORGEMENT OF THE FIRM'S PROFITS, ANDREQUIRED, WITHIN THIRTY DAYS CERTIFY TO FINRA THAT THE FIRM HASREVIEWED IT POLICIES, SYSTEMS AND PROCEDURES FOR THELIQUIDATION OF SECURITIES DELIVERED IN CERTIFICATE ORELECTRONIC FORM AND HAS DETERMINED THAT THEY ARE REASONABLYDESIGNED TO ACHIEVE COMPLIANCE WITH FINRA RULES AND THEFEDERAL SECURITIES LAWS.

Disclosure 15 of 53

i


Initiated By: FINRA







Allegations: NASD RULES 2110, 3010, 8211, 8213 - WILSON-DAVIS & CO., INC. FAILED TOREPORT ACCURATE TRADING INFORMATION THROUGH THE SUBMISSIONOF ELECTRONIC BLUE SHEETS IN RESPONSE TO REQUESTS FOR SUCHINFORMATION BY FINRA; THE FIRM FAILED TO INCLUDE THE SHORT SALEINDICATOR FOR ELECTRONIC BLUE SHEET RECORDS. THE FIRM'SSUPERVISORY SYSTEM DID NOT PROVIDE FOR SUPERVISIONREASONABLY DESIGNED TO ACHIEVE COMPLIANCE WITH APPLICABLESECURITIES LAWS, REGULATIONS AND NASD RULES CONCERNING THESUBMISSION OF ELECTRONIC BLUE SHEET DATA.



Resolution:


No













Initiated By: FINRA








Allegations: FAILED TO REPORT ACCURATE TRADING INFORMATION THROUGH THESUBMISSION OF ELECTRONIC BLUE SHEETS. THE FIRM FAILED TOINCLUDE THE SHORT SALE INDICATOR. THE FIRMS SUPERVISORY SYSTEMDID NOT PROVIDE FOR SUPERVISION REASONABLY DESIGNED TOACHIEVE COMPLIANCE WITH APPLICABLE SECURITY LAW.


Appealed To and Date AppealFiled:

FAILED TO REPORT ACCURATE TRADING INFORMATION THROUGH THESUBMISSION OF ELECTRONIC BLUE SHEETS. THE FIRM FAILED TOINCLUDE THE SHORT SALE INDICATOR. THE FIRMS SUPERVISORY SYSTEMDID NOT PROVIDE FOR SUPERVISION REASONABLY DESIGNED TOACHIEVE COMPLIANCE WITH APPLICABLE SECURITY LAW.


Resolution:


Sanction Details: WITHOUT ADMITTING OR DENYING THE FINDINGS, THE FIRM CONSENTEDTO THE DESCRIBED SANCTIONS AND TO THE ENTRY OF FINDINGS;THEREFORE, THE FIRM IS CENSURED AND FINED $25000.








Sanction Details: WITHOUT ADMITTING OR DENYING THE FINDINGS, THE FIRM CONSENTEDTO THE DESCRIBED SANCTIONS AND TO THE ENTRY OF FINDINGS;THEREFORE, THE FIRM IS CENSURED AND FINED $25000.

Disclosure 16 of 53

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Initiated By: NASD






Other Product Type(s): NASDAQ SECURITIES

Allegations: SEC RULES 17A-3, 604, NASD RULES 2110, 2320, 3010, 3110 - WILSON-DAVIS& CO., INC. FAILED TO DISPLAY IMMEDIATELY CUSTOMER LIMIT ORDERS INNASDAQ SECURITIES IN ITS PUBLIC QUOTATION WHEN EACH SUCHORDER WAS AT A PRICE THAT WOULD HAVE IMPROVED THE FIRM'S BID OROFFER IN EACH SUCH SECURITY; OR WHEN THE ORDER WAS PRICEDEQUAL TO ITS BID OR OFFER AND THE NATIONAL BEST BID OR OFFER FOREACH SUCH SECURITY, AND THE SIZE OF THE ORDER REPRESENTEDMORE THAN A DE MINIMIS CHANGE IN RELATION TO THE SIZE ASSOCIATEDWITH THE FIRM'S BID OR OFFER IN EACH SUCH SECURITY; FAILED TO USEREASONABLE DILIGENCE TO ASCERTAIN THE BEST INTER-DEALERMARKET AND FAILED TO BUY OR SELL IN SUCH MARKET SO THAT THERESULTANT PRICE TO ITS CUSTOMER WAS AS FAVORABLE AS POSSIBLEUNDER PREVAILING MARKET CONDITIONS; FAILED TO SHOW THECORRECT TIME OF ENTRY ON BROKERAGE ORDER MEMORANDA; ANDTHE FIRM'S SUPERVISORY SYSTEM DID NOT PROVIDE FOR SUPERVISIONREASONABLY DESIGNED TO ACHIEVE COMPLIANCE WITH APPLICABLESECURITIES LAWS, REGULATIONS AND NASD RULES CONCERNING LIMITORDER PROTECTION, BEST EXECUTION, "REGULAR & RIGOROUS"REVIEWS, THE THREE QUOTE RULE, TRADE REPORTING, AND BOOKS ANDRECORDS. THE FIRM FAILED TO ENFORCE ITS WRITTEN SUPERVISORYPROCEDURES WITH RESPECT TO BEST EXECUTION AND "REGULAR &RIGOROUS" REVIEWS.



Resolution: Acceptance, Waiver & Consent(AWC)








Sanction Details: WITHOUT ADMITTING OR DENYING THE FINDINGS, THE FIRM CONSENTEDTO THE DESCRIBED SANCTIONS AND TO THE ENTRY OF FINDINGS;THEREFORE, THE FIRM IS CENSURED, FINED $25,000 AND REQUIRED TOREVISE THE FIRM'S WRITTEN SUPEVISORY PROCEDURES REGARDINGLIMIT ORDER PROTECTION, BEST EXECUTION, "REGULAR & RIGOROUS"REVIEWS, THE THREE QUOTE RULE, TRADE REPORTING, AND BOOKS ANDRECORDS WITHIN 30 BUSINESS DAYS OF ACCEPTANCE OF THIS AWC BYTHE NAC.


No



Allegations: SEC RULES 17A-3, 604, NASD RULES 2110, 2320, 3010, 3110- WILSON DAVIS& CO FAILED TO DISPLAY IMMEDIATELY CUSTOMER LIMIT ORDERS INNASDAQ SECURITIES IN ITS PUBLIC QUOTATION WHEN EACH SUCHORDER WAS AT A PRICE THAT WOULD HAVE IMPROVED THE FIRM'S BID OROFFER IN EACH SUCH SECURITY; OR WHEN THE ORDER WAS PRICEDEQUAL TO ITS BID OR OFFER AND THE NATIONAL BEST BID OR OFFER FOREACH SUCH SECURITY, AND THE SIZE OF THE ORDER REPRESENTEDMORE THAN A DE MINIMIS CHANGE IN RELATION TO THE SIZE ASSOCIATEDWITH THE FIRM'S BID OR OFFER IN EACH SUCH SECURITY; FAILED TO USEREASONABLE DILIGENCE TO ASCERTAIN THE BEST INTER-DEALERMARKET AND FAILED TO BUY OR SELL IN SUCH MARKET SO THAT THERESULTANT PRICE TO ITS CUSTOMER WAS AS FAVORABLE AS POSSIBLEUNDER PREVAILING MARKET CONDITIONS; FAILED TO SHOW THECORRECT TIME OF ENTRY ON BROKERAGE ORDER MEMORANDA; ANDTHE FIRM'S SUPERVISORY SYSTEM DID NOT PROVIDE FOR SUPERVISIONREASONABLY DESIGNED TO ACHIEVE COMPLIANCE WITH APPLICABLESECURITIES LAWS, REGULATIONS AND NASD RULES CONCERING LIMITORDER PROTECTION, BEST EXECUTION, "REGULAR & RIGOROUS"REVIEWS, THE THREE QUOTE RULE, TRADE REPORTING, AND BOOKS ANDRECORDS. THE FIRM FAILED TO ENFORCE ITS WRITTEN SUPERVISORYPROCEDURES WITH RESPECT TO BEST EXECUTION AND "REGULAR &RIGOROUS" REVIEWS.







Initiated By: NASD


Other


ACCEPTANCE, WAIVER & CONSENT (AWC)




Other Product Type(s): NASDAQ SECURITIES

SEC RULES 17A-3, 604, NASD RULES 2110, 2320, 3010, 3110- WILSON DAVIS& CO FAILED TO DISPLAY IMMEDIATELY CUSTOMER LIMIT ORDERS INNASDAQ SECURITIES IN ITS PUBLIC QUOTATION WHEN EACH SUCHORDER WAS AT A PRICE THAT WOULD HAVE IMPROVED THE FIRM'S BID OROFFER IN EACH SUCH SECURITY; OR WHEN THE ORDER WAS PRICEDEQUAL TO ITS BID OR OFFER AND THE NATIONAL BEST BID OR OFFER FOREACH SUCH SECURITY, AND THE SIZE OF THE ORDER REPRESENTEDMORE THAN A DE MINIMIS CHANGE IN RELATION TO THE SIZE ASSOCIATEDWITH THE FIRM'S BID OR OFFER IN EACH SUCH SECURITY; FAILED TO USEREASONABLE DILIGENCE TO ASCERTAIN THE BEST INTER-DEALERMARKET AND FAILED TO BUY OR SELL IN SUCH MARKET SO THAT THERESULTANT PRICE TO ITS CUSTOMER WAS AS FAVORABLE AS POSSIBLEUNDER PREVAILING MARKET CONDITIONS; FAILED TO SHOW THECORRECT TIME OF ENTRY ON BROKERAGE ORDER MEMORANDA; ANDTHE FIRM'S SUPERVISORY SYSTEM DID NOT PROVIDE FOR SUPERVISIONREASONABLY DESIGNED TO ACHIEVE COMPLIANCE WITH APPLICABLESECURITIES LAWS, REGULATIONS AND NASD RULES CONCERING LIMITORDER PROTECTION, BEST EXECUTION, "REGULAR & RIGOROUS"REVIEWS, THE THREE QUOTE RULE, TRADE REPORTING, AND BOOKS ANDRECORDS. THE FIRM FAILED TO ENFORCE ITS WRITTEN SUPERVISORYPROCEDURES WITH RESPECT TO BEST EXECUTION AND "REGULAR &RIGOROUS" REVIEWS.


Resolution:


Sanction Details: WITHOUT ADMITTING OR DENYING THE FINDINGS, THE FIRM CONSENTEDTO THE DESCRIBED SANCTIONS AND TO THE ENTRY OF FINDINGS;THEREFORE, THE FIRM IS CENSURED, FINED $25,000 AND REQUIRED TOREVISE THE FIRM'S WRITTEN SUPERVISORY PROCEDURES REGARDINGLIMIT ORDER PROTECTION, BEST EXEUTION, "REGULAR & RIGOROUS"REVIEWS, THE THREE QUOTE RULE, TRADE REPORTING AND BOOKS ANDRECORDS WITHIN 30 BUSINESS DAYS OF ACCEPTANCE OF THIS AWC BYTHE NAC.



Disclosure 17 of 53

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Allegations: NASD CONDUCT RULES 2110 AND 3010, AND SEC RULE 11AC1-5 -RESPONDENT MEMBER ("FIRM") FAILED TO MAKE AVAILABLE A REPORT ONTHE COVERED ORDERS IN NATIONAL MARKET SYSTEM SECURITIES THATIT RECEIVED FOR EXECUTION FROM ANY PERSON. THE FIRM'SSUPERVISORY SYSTEM DID NOT PROVIDE FOR SUPERVISIONREASONABLY DESIGNED TO ACHIEVE COMPLIANCE WITH RESPECT TOTHE APPLICABLE SECURITIES LAWS AND REGULATIONS IN THEFOLLOWING AREAS: AS TO SEC RULE 11AC1-5 AND 11AC1-6, BESTEXECUTION, TRANSACTION REPORTING, OATS, AND ANTI-COMPETITIVEPRACTICES. THE FIRM'S SUPERVISORY SYSTEM DID NOT INCLUDEWRITTEN SUPERVISORY PROCEDURES PROVIDING FOR: (1) THEIDENTIFICATION OF THE PERSON(S) RESPONSIBLE FOR SUPERVISIONWITH RESPECT TO THE APPLICABLE RULES; (2) A STATEMENT OF THESUPERVISORY STEP(S) TO BE TAKE BY THE IDENTIFIED PERSON(S); (3) ASTATEMENT AS TO HOW OFTEN SUCH PERSON(S) SHOULD TAKE SUCHSTEP(S); AND (4) A STATEMENT AS TO HOW THE COMPLETION OF THESTEP(S) INCLUDE IN THE WRITTEN SUPERVISORY PROCEDURES SHOULDBE DOCUMENTED.







Initiated By: NASD




Docket/Case Number: CMS030228


Other Product Type(s): UNKNOWN TYPE OF SECURITIES

NASD CONDUCT RULES 2110 AND 3010, AND SEC RULE 11AC1-5 -RESPONDENT MEMBER ("FIRM") FAILED TO MAKE AVAILABLE A REPORT ONTHE COVERED ORDERS IN NATIONAL MARKET SYSTEM SECURITIES THATIT RECEIVED FOR EXECUTION FROM ANY PERSON. THE FIRM'SSUPERVISORY SYSTEM DID NOT PROVIDE FOR SUPERVISIONREASONABLY DESIGNED TO ACHIEVE COMPLIANCE WITH RESPECT TOTHE APPLICABLE SECURITIES LAWS AND REGULATIONS IN THEFOLLOWING AREAS: AS TO SEC RULE 11AC1-5 AND 11AC1-6, BESTEXECUTION, TRANSACTION REPORTING, OATS, AND ANTI-COMPETITIVEPRACTICES. THE FIRM'S SUPERVISORY SYSTEM DID NOT INCLUDEWRITTEN SUPERVISORY PROCEDURES PROVIDING FOR: (1) THEIDENTIFICATION OF THE PERSON(S) RESPONSIBLE FOR SUPERVISIONWITH RESPECT TO THE APPLICABLE RULES; (2) A STATEMENT OF THESUPERVISORY STEP(S) TO BE TAKE BY THE IDENTIFIED PERSON(S); (3) ASTATEMENT AS TO HOW OFTEN SUCH PERSON(S) SHOULD TAKE SUCHSTEP(S); AND (4) A STATEMENT AS TO HOW THE COMPLETION OF THESTEP(S) INCLUDE IN THE WRITTEN SUPERVISORY PROCEDURES SHOULDBE DOCUMENTED.


Resolution:


Sanction Details: WITHOUT ADMITTING OR DENYING THE ALLEGATIONS, RESPONDENT FIRMCONSENTED TO THE DESCRIBED SANCTIONS AND TO THE ENTRY OFFINDINGS; THEREFORE, THE FIRM IS CENSURED, FINED $10,000, ANDREQUIRED TO UNDERTAKE TO REVISE ITS WRITTEN SUPERVISORYPROCEDURES WITH RESPECT TO THE APPLICABLE SECURITIES LAWSAND REGULATIONS CONCERNING THE SEC RULE 11AC1-5 AND 11AC1-6,BEST EXECUTION, TRANSACTION REPORTING, OATS, AND ANTI-COMPETITIVE PRACTICES WITHIN 30 DAYS.


No









Initiated By: NASD REGULATION INC.


Other


OTHER RELIEF SOUGHT




Other Product Type(s): OTHER

Allegations: FAILED TO FILE REPORT ON COVERED ORDERS IN NATIONAL MARKETSYSTEM SECURITIES AS REQUIRED BY RULE 11AC1-5. WRITTENSUPERVISORY PROCEDURES NOT COMPLETE.



Resolution:


Sanction Details: WITHOUT ADMITTING OR DENYING THE ALLEGATIONS THE FIRM AGREESTO THE FINE AND AGREES TO REVISE THE WSP'S



Disclosure 18 of 53

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Allegations: NASD RULES 2110, 3010, 3320, 3370, 4613(B), 6130, 6620(A), 6620(A)(6) ANDIM-2110-2, AND SEC RULES 11AC1-1 AND 11AC1-4 - WITHOUT ADMITTINGOR DENYING THE ALLEGATIONS, THE RESPONDENT FIRM CONSENTED TOTHE ENTRY OF FINDINGS THAT IT EXECUTED SHORT SALE ORDERS INCERTAIN SECURITIES AND FAILED TO MAINTAIN A WRITTEN RECORD OFTHE AFFIRMATIVE DETERMINATION MADE FOR SUCH ORDERS, ANDFAILED TO MAKE AN AFFIRMATIVE DETERMINATION PRIOR TO EXECUTINGSUCH TRANSACTIONS. THE FIRM EXECUTED SHORT SALE TRANSACTIONSAND FAILED TO REPORT THESE TRANSACTIONS TO AUTOMATEDCONFIRMATION TRANSACTION SERVICE ("ACT") WITH A SHORT SALEMODIFIER, AND ALSO FAILED TO REPORT THE CORRECT SYMBOLINDICATING WHETHER FIRM EXECUTED TRANSACTIONS IN ELIGIBLESECURITIES IN A PRINCIPAL OR AGENCY CAPACITY. THE FIRMTRANSMITTED THROUGH ACT LAST SALE REPORTS OF TRANSACTIONS INOTC EQUITY SECURITIES AND FAILED TO DESIGNATE THROUGH ACT SUCHLAST SALE REPORTS AS REFLECTING A PRICE DIFFERENT FROM THECURRENT MARKET WHEN THE EXECUTION WAS BASED ON A PRIORREFERENCE POINT IN TIME. THE FIRM FAILED TO DISPLAY IMMEDIATELYTHE CUSTOMER LIMIT ORDERS IN NASDAQ SECURITIES IN ITS PUBLICQUOTATION, WHEN EACH SUCH ORDER WAS AT A PRICE THAT WOULDHAVE IMPROVED THE FIRM?S BID OR OFFER IN EACH SUCH SECURITY; ORWHEN THE ORDER WAS PRICED EQUAL TO THE FIRM?S BID OR OFFERAND THE NATIONAL BEST BID OR OFFER IN SUCH SECURITY, AND THESIZE OF THE ORDER REPRESENTED MORE THAN A DE MINIMIS CHANGE INRELATION TO THE SIZE ASSOCIATED WITH ITS BID OR OFFER IN EACHSUCH SECURITY. THE FIRM ALSO FAILED TO CONTEMPORANEOUSLY ORPARTIALLY EXECUTE CUSTOMER LIMIT ORDERS IN NASDAQ SECURITIESAFTER IT TRADED EACH SUBJECT SECURITY FOR ITS OWN MARKET-MAKING ACCOUNT AT A PRICE THAT WOULD HAVE SATISFIED EACHCUSTOMER'S LIMIT ORDER. THE FIRM WAS A MARKET MAKER INSECURITIES, AND AN ORDER WAS PRESENTED TO THE FIRM AT THEFIRM'S PUBLISHED BID OR PUBLISHED OFFER IN AN AMOUNT UP TO ITSPUBLISHED QUOTATION SIZE. (SEE ITEM #13 FOR ALLEGATIONS)







Initiated By: NATIONAL ASSOCIATION OF SECURITIES DEALERS, INC.







NASD RULES 2110, 3010, 3320, 3370, 4613(B), 6130, 6620(A), 6620(A)(6) ANDIM-2110-2, AND SEC RULES 11AC1-1 AND 11AC1-4 - WITHOUT ADMITTINGOR DENYING THE ALLEGATIONS, THE RESPONDENT FIRM CONSENTED TOTHE ENTRY OF FINDINGS THAT IT EXECUTED SHORT SALE ORDERS INCERTAIN SECURITIES AND FAILED TO MAINTAIN A WRITTEN RECORD OFTHE AFFIRMATIVE DETERMINATION MADE FOR SUCH ORDERS, ANDFAILED TO MAKE AN AFFIRMATIVE DETERMINATION PRIOR TO EXECUTINGSUCH TRANSACTIONS. THE FIRM EXECUTED SHORT SALE TRANSACTIONSAND FAILED TO REPORT THESE TRANSACTIONS TO AUTOMATEDCONFIRMATION TRANSACTION SERVICE ("ACT") WITH A SHORT SALEMODIFIER, AND ALSO FAILED TO REPORT THE CORRECT SYMBOLINDICATING WHETHER FIRM EXECUTED TRANSACTIONS IN ELIGIBLESECURITIES IN A PRINCIPAL OR AGENCY CAPACITY. THE FIRMTRANSMITTED THROUGH ACT LAST SALE REPORTS OF TRANSACTIONS INOTC EQUITY SECURITIES AND FAILED TO DESIGNATE THROUGH ACT SUCHLAST SALE REPORTS AS REFLECTING A PRICE DIFFERENT FROM THECURRENT MARKET WHEN THE EXECUTION WAS BASED ON A PRIORREFERENCE POINT IN TIME. THE FIRM FAILED TO DISPLAY IMMEDIATELYTHE CUSTOMER LIMIT ORDERS IN NASDAQ SECURITIES IN ITS PUBLICQUOTATION, WHEN EACH SUCH ORDER WAS AT A PRICE THAT WOULDHAVE IMPROVED THE FIRM?S BID OR OFFER IN EACH SUCH SECURITY; ORWHEN THE ORDER WAS PRICED EQUAL TO THE FIRM?S BID OR OFFERAND THE NATIONAL BEST BID OR OFFER IN SUCH SECURITY, AND THESIZE OF THE ORDER REPRESENTED MORE THAN A DE MINIMIS CHANGE INRELATION TO THE SIZE ASSOCIATED WITH ITS BID OR OFFER IN EACHSUCH SECURITY. THE FIRM ALSO FAILED TO CONTEMPORANEOUSLY ORPARTIALLY EXECUTE CUSTOMER LIMIT ORDERS IN NASDAQ SECURITIESAFTER IT TRADED EACH SUBJECT SECURITY FOR ITS OWN MARKET-MAKING ACCOUNT AT A PRICE THAT WOULD HAVE SATISFIED EACHCUSTOMER'S LIMIT ORDER. THE FIRM WAS A MARKET MAKER INSECURITIES, AND AN ORDER WAS PRESENTED TO THE FIRM AT THEFIRM'S PUBLISHED BID OR PUBLISHED OFFER IN AN AMOUNT UP TO ITSPUBLISHED QUOTATION SIZE. (SEE ITEM #13 FOR ALLEGATIONS)


Resolution:


Sanction Details: A CENSURE AND A $36,000 FINE (COMPOSED OF A $2,000 FINE FOR THESHORT SALE AFFIRMATIVE DETERMINATION VIOLATIONS, A $5,000 FINEFOR THE LIMIT ORDER DISPLAY VIOLATIONS, A $5,000 FOR THE LIMITORDER PROTECTION VIOLATIONS, A $5,000 FINE FOR THE SUPERVISORYVIOLATIONS, A $10,000 FINE FOR THE BACKING AWAY VIOLATIONS, AND A$9,000 FINE FOR THE TRADE REPORTING VIOLATIONS).









Regulator Statement THE FIRM FAILED TO EXECUTE THE ORDERS UPON PRESENTMENT ANDTHEREBY FAILED TO HONOR ITS PUBLISHED QUOTATION. THE FIRMFAILED, WITHIN 90 SECONDS AFTER EXECUTION, TO TRANSMIT THROUGHACT, LAST SALE REPORTS OF TRANSACTIONS IN OTC EQUITY SECURITIESAND FAILED TO DESIGNATE THROUGH ACT SUCH LAST SALE REPORTS ASLATE. THESE TRANSACTIONS WERE REQUIRED TO REPORT TO ACTDURING THE REVIEW PERIOD. THE FIRM'S SUPERVISORY SYSTEM DIDNOT PROVIDE FOR SUPERVISION REASONABLY DESIGNED TO ACHIEVECOMPLIANCE WITH RESPECT TO THE APPLICABLE SECURITIES LAWS ANDREGULATIONS CONCERNING OATS (ACCURACY AND DATE SUBMITTED);BEST EXECUTION (THREE QUOTE RULE); SECTION 21(A) ISSUES (ANTI-COORDINATION AND ANTI-INTIMIDATION); AND TRADE REPORTING.SPECIFICALLY, THE FIRM'S SUPERVISORY SYSTEM DID NOT INCLUDEWRITTEN SUPERVISORY PROCEDURES PROVIDING FOR THEIDENTIFICATION OF THE PERSON RESPONSIBLE AT THE FIRM TO ENSURECOMPLIANCE WITH THE APPLICABLE RULES; A STATEMENT OF THE STEPSTHAT SUCH PERSON SHOULD TAKE TO ENSURE COMPLIANCE; ASTATEMENT AS TO HOW OFTEN SUCH PERSON SHOULD TAKE SUCHSTEPS; AND A STATEMENT AS TO HOW ENFORCEMENT OF SUCH WRITTENSUPERVISORY PROCEDURES SHOULD BE DOCUMENTED AT THE FIRM.


Allegations: NASD RULES 2110, 3010, 3320, 3370, 4613(B), 6130, 6620(A), 6620(A)(6) ANDIM-2110-2, AND SEC RULES 11AC1-1 AND 11AC1-4 - WITHOUT ADMITTINGOR DENYING THE ALLEGATIONS, THE RESPONDENT FIRM CONSENTED TOTHE ENTRY OF FINDINGS THAT IT EXECUTED SHORT SALE ORDERS INCERTAIN SECURITIES AND FAILED TO MAINTAIN A WRITTEN RECORD OFTHE AFFIRMATIVE DETERMINATION MADE FOR SUCH ORDERS, ANDFAILED TO MAKE AN AFFIRMATIVE DETERMINATION PRIOR TO EXECUTINGSUCH TRANSACTIONS. THE FIRM EXECUTED SHORT SALE TRANSACTIONSAND FAILED TO REPORT THESE TRANSACTIONS TO AUTOMATEDCONFIRMATION TRANSACTION SERVICE ("ACT") WITH A SHORT SALEMODIFIER, AND ALSO FAILED TO REPORT THE CORRECT SYMBOLINDICATING WHETHER FIRM EXECUTED TRANSACTIONS IN ELIGIBLESECURITIES IN A PRINCIPAL OR AGENCY CAPACITY. THE FIRMTRANSMITTED THROUGH ACT LAST SALE REPORTS OF TRANSACTIONS INOTC EQUITY SECURITIES AND FAILED TO DESIGNATE THROUGH ACT SUCHLAST SALE REPORTS AS REFLECTING A PRICE DIFFERENT FROM THECURRENT MARKET WHEN THE EXECUTION WAS BASED ON A PRIORREFERENCE POINT IN TIME. THE FIRM FAILED TO DISPLAY IMMEDIATELYTHE CUSTOMER LIMIT ORDERS IN NASDAQ SECURITIES IN ITS PUBLICQUOTATION, WHEN EACH SUCH ORDER WAS AT A PRICE THAT WOULDHAVE IMPROVED THE FIRM?S BID OR OFFER IN EACH SUCH SECURITY; ORWHEN THE ORDER WAS PRICED EQUAL TO THE FIRM?S BID OR OFFERAND THE NATIONAL BEST BID OR OFFER IN SUCH SECURITY, AND THESIZE OF THE ORDER REPRESENTED MORE THAN A DE MINIMIS CHANGE INRELATION TO THE SIZE ASSOCIATED WITH ITS BID OR OFFER IN EACHSUCH SECURITY. THE FIRM ALSO FAILED TO CONTEMPORANEOUSLY ORPARTIALLY EXECUTE CUSTOMER LIMIT ORDERS IN NASDAQ SECURITIESAFTER IT TRADED EACH SUBJECT SECURITY FOR ITS OWN MARKET-MAKING ACCOUNT AT A PRICE THAT WOULD HAVE SATISFIED EACHCUSTOMER'S LIMIT ORDER. THE FIRM WAS A MARKET MAKER INSECURITIES, AND AN ORDER WAS PRESENTED TO THE FIRM AT THEFIRM'S PUBLISHED BID OR PUBLISHED OFFER IN AN AMOUNT UP TO ITSPUBLISHED QUOTATION SIZE. (SEE ITEM #13 FOR ALLEGATIONS)







Initiated By: NASD REGULATION, INC.


Censure



Docket/Case Number: CMS020187 AWC



NASD RULES 2110, 3010, 3320, 3370, 4613(B), 6130, 6620(A), 6620(A)(6) ANDIM-2110-2, AND SEC RULES 11AC1-1 AND 11AC1-4 - WITHOUT ADMITTINGOR DENYING THE ALLEGATIONS, THE RESPONDENT FIRM CONSENTED TOTHE ENTRY OF FINDINGS THAT IT EXECUTED SHORT SALE ORDERS INCERTAIN SECURITIES AND FAILED TO MAINTAIN A WRITTEN RECORD OFTHE AFFIRMATIVE DETERMINATION MADE FOR SUCH ORDERS, ANDFAILED TO MAKE AN AFFIRMATIVE DETERMINATION PRIOR TO EXECUTINGSUCH TRANSACTIONS. THE FIRM EXECUTED SHORT SALE TRANSACTIONSAND FAILED TO REPORT THESE TRANSACTIONS TO AUTOMATEDCONFIRMATION TRANSACTION SERVICE ("ACT") WITH A SHORT SALEMODIFIER, AND ALSO FAILED TO REPORT THE CORRECT SYMBOLINDICATING WHETHER FIRM EXECUTED TRANSACTIONS IN ELIGIBLESECURITIES IN A PRINCIPAL OR AGENCY CAPACITY. THE FIRMTRANSMITTED THROUGH ACT LAST SALE REPORTS OF TRANSACTIONS INOTC EQUITY SECURITIES AND FAILED TO DESIGNATE THROUGH ACT SUCHLAST SALE REPORTS AS REFLECTING A PRICE DIFFERENT FROM THECURRENT MARKET WHEN THE EXECUTION WAS BASED ON A PRIORREFERENCE POINT IN TIME. THE FIRM FAILED TO DISPLAY IMMEDIATELYTHE CUSTOMER LIMIT ORDERS IN NASDAQ SECURITIES IN ITS PUBLICQUOTATION, WHEN EACH SUCH ORDER WAS AT A PRICE THAT WOULDHAVE IMPROVED THE FIRM?S BID OR OFFER IN EACH SUCH SECURITY; ORWHEN THE ORDER WAS PRICED EQUAL TO THE FIRM?S BID OR OFFERAND THE NATIONAL BEST BID OR OFFER IN SUCH SECURITY, AND THESIZE OF THE ORDER REPRESENTED MORE THAN A DE MINIMIS CHANGE INRELATION TO THE SIZE ASSOCIATED WITH ITS BID OR OFFER IN EACHSUCH SECURITY. THE FIRM ALSO FAILED TO CONTEMPORANEOUSLY ORPARTIALLY EXECUTE CUSTOMER LIMIT ORDERS IN NASDAQ SECURITIESAFTER IT TRADED EACH SUBJECT SECURITY FOR ITS OWN MARKET-MAKING ACCOUNT AT A PRICE THAT WOULD HAVE SATISFIED EACHCUSTOMER'S LIMIT ORDER. THE FIRM WAS A MARKET MAKER INSECURITIES, AND AN ORDER WAS PRESENTED TO THE FIRM AT THEFIRM'S PUBLISHED BID OR PUBLISHED OFFER IN AN AMOUNT UP TO ITSPUBLISHED QUOTATION SIZE. (SEE ITEM #13 FOR ALLEGATIONS)


Resolution:









www.finra.org/brokercheck User GuidanceA CENSURE AND A $36,000 FINE (COMPOSED OF A $2,000 FINE FOR THESHORT SALE AFFIRMATIVE DETERMINATION VIOLATIONS, A $5,000 FINEFOR THE LIMIT ORDER DISPLAY VIOLATIONS, A $5,000 FOR THE LIMITORDER PROTECTION VIOLATIONS, A $5,000 FINE FOR THE SUPERVISORYVIOLATIONS, A $10,000 FINE FOR THE BACKING AWAY VIOLATIONS, AND A$9,000 FINE FOR THE TRADE REPORTING VIOLATIONS).

Firm Statement THE FIRM FAILED TO EXECUTE THE ORDERS UPON PRESENTMENT ANDTHEREBY FAILED TO HONOR ITS PUBLISHED QUOTATION. THE FIRMFAILED, WITHIN 90 SECONDS AFTER EXECUTION, TO TRANSMIT THROUGHACT, LAST SALE REPORTS OF TRANSACTIONS IN OTC EQUITY SECURITIESAND FAILED TO DESIGNATE THROUGH ACT SUCH LAST SALE REPORTS ASLATE. THESE TRANSACTIONS WERE REQUIRED TO REPORT TO ACTDURING THE REVIEW PERIOD. THE FIRM'S SUPERVISORY SYSTEM DIDNOT PROVIDE FOR SUPERVISION REASONABLY DESIGNED TO ACHIEVECOMPLIANCE WITH RESPECT TO THE APPLICABLE SECURITIES LAWS ANDREGULATIONS CONCERNING OATS (ACCURACY AND DATE SUBMITTED);BEST EXECUTION (THREE QUOTE RULE); SECTION 21(A) ISSUES (ANTI-COORDINATION AND ANTI-INTIMIDATION); AND TRADE REPORTING.SPECIFICALLY, THE FIRM'S SUPERVISORY SYSTEM DID NOT INCLUDEWRITTEN SUPERVISORY PROCEDURES PROVIDING FOR THEIDENTIFICATION OF THE PERSON RESPONSIBLE AT THE FIRM TO ENSURECOMPLIANCE WITH THE APPLICABLE RULES; A STATEMENT OF THE STEPSTHAT SUCH PERSON SHOULD TAKE TO ENSURE COMPLIANCE; ASTATEMENT AS TO HOW OFTEN SUCH PERSON SHOULD TAKE SUCHSTEPS; AND A STATEMENT AS TO HOW ENFORCEMENT OF SUCH WRITTENSUPERVISORY PROCEDURES SHOULD BE DOCUMENTED AT THE FIRM.

Disclosure 19 of 53

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Allegations: NASD RULES 2110, 6740 AND SEC RULE 15C2-11 - WITHOUT ADMITTING ORDENYING THE ALLEGATIONS, THE FIRM CONSENTED TO THE FINDINGSTHAT IT PUBLISHED QUOTATIONS FOR OTC EQUITY SECURITIES INQUOTATION MEDIUMS THAT DID NOT HAVE A REASONABLE BASIS UNDERTHE CIRCUMSTANCES FOR BELIEVING THAT THE INFORMATION WASACCURATE IN ALL MATERIAL RESPECTS OR DID NOT HAVE A REASONABLEBASIS UNDER THE CIRCUMSTANCES FOR BELIEVING THAT THE SOURCESOF THE INFORMATION WERE RELIABLE; FAILED TO FILE A FORM 211 WITHTHE NASD AT LEAST THREE BUSINESS DAYS BEFORE THE FIRM'SQUOTATIONS WERE PUBLISHED OR DISPLAYED IN A QUOTATION MEDIUM;AND, THE FIRM'S SUPERVISORY SYSTEM DID NOT PROVIDE FORSUPERVISION REASONABLY DESIGNED TO ACHIEVE COMPLIANCE WITHRESPECT TO THE APPLICABLE SECURITIES LAWS AND REGULATIONSCONCERNING SEC RULE 15C2-11 AND NASD MARKETPLACE RULE 6740.SPECIFICALLY, THE NASD FOUND THAT THE FIRM'S SUPERVISORYSYSTEM DID NOT INCLUDE WRITTEN SUPERVISORY PROCEDURESPROVIDING FOR THE IDENTIFICATION OF THE PERSON RESPONSIBLE ATTHE FIRM TO ENSURE COMPLIANCE WITH THE APPLICABLE RULES, ASTATEMENT OF THE STEPS THAT SUCH PERSON SHOULD TAKE TOENSURE COMPLIANCE, A STATEMENT AS TO HOW OFTEN SUCH PERSONSHOULD TAKE SUCH STEPS, AND A STATEMENT AS TO HOWENFORCEMENT OF SUCH WRITTEN SUPERVISORY PROCEDURES SHOULDBE DOCUMENTED AT THE FIRM.







Initiated By: NATIONAL ASSOCIATION OF SECURITIES DEALERS







NASD RULES 2110, 6740 AND SEC RULE 15C2-11 - WITHOUT ADMITTING ORDENYING THE ALLEGATIONS, THE FIRM CONSENTED TO THE FINDINGSTHAT IT PUBLISHED QUOTATIONS FOR OTC EQUITY SECURITIES INQUOTATION MEDIUMS THAT DID NOT HAVE A REASONABLE BASIS UNDERTHE CIRCUMSTANCES FOR BELIEVING THAT THE INFORMATION WASACCURATE IN ALL MATERIAL RESPECTS OR DID NOT HAVE A REASONABLEBASIS UNDER THE CIRCUMSTANCES FOR BELIEVING THAT THE SOURCESOF THE INFORMATION WERE RELIABLE; FAILED TO FILE A FORM 211 WITHTHE NASD AT LEAST THREE BUSINESS DAYS BEFORE THE FIRM'SQUOTATIONS WERE PUBLISHED OR DISPLAYED IN A QUOTATION MEDIUM;AND, THE FIRM'S SUPERVISORY SYSTEM DID NOT PROVIDE FORSUPERVISION REASONABLY DESIGNED TO ACHIEVE COMPLIANCE WITHRESPECT TO THE APPLICABLE SECURITIES LAWS AND REGULATIONSCONCERNING SEC RULE 15C2-11 AND NASD MARKETPLACE RULE 6740.SPECIFICALLY, THE NASD FOUND THAT THE FIRM'S SUPERVISORYSYSTEM DID NOT INCLUDE WRITTEN SUPERVISORY PROCEDURESPROVIDING FOR THE IDENTIFICATION OF THE PERSON RESPONSIBLE ATTHE FIRM TO ENSURE COMPLIANCE WITH THE APPLICABLE RULES, ASTATEMENT OF THE STEPS THAT SUCH PERSON SHOULD TAKE TOENSURE COMPLIANCE, A STATEMENT AS TO HOW OFTEN SUCH PERSONSHOULD TAKE SUCH STEPS, AND A STATEMENT AS TO HOWENFORCEMENT OF SUCH WRITTEN SUPERVISORY PROCEDURES SHOULDBE DOCUMENTED AT THE FIRM.


Resolution:


Sanction Details: REQUIRED TO REVISE ITS WRITTEN SUPERVISORY PROCEDURESCONCERNING SEC RULE 15C2-11 AND NASD MARKETPLACE RULE 6740WITHIN 30 BUSINESS DAYS OF THE ACCEPTANCE OF THIS AWC BY THENAC.

Regulator Statement 04/17/02AC FINES & COST PAID IN FULL $10,000.00 12/10/01 INVOICE # 01-MS- 690




Initiated By: DEPARTMENT OF MARKET REGULATION, NASD REGULATION, INC.


Allegations: THE FIRM PUBLISHED QUOTATIONS ON THREE SECURITIES THAT HADBEEN SUSPENDED BY THE SEC AND DID NOT HAVE IN ITS RECORDS THEDOCUMENTATION REQUIRED BY SEC RULE 15C2-11 AND THE QUOTATIONSDID NOT REPRESENT CUSTOMER ORDERS.








Censure


MONETARY/FINE $10,000 AND AN UNDERTAKING TO REVISE THE FIRM'SWRITTEN SUPERVISORY PROCEDURES (WSP)






Resolution:

Other Sanctions Ordered: AN UNDERTAKING TO REVISE THE FIRM'S WSP TO PROVIDE FORSUPERVISION REASONABLY DESIGNED TO ACHIEVE COMPLIANCE WITHRESPECT TO THE APPLICABLE SECURITIES LAWS AND REGULATIONSCONCERNING SEC RULE 15C2-11 AND NASD MARKETPLACE RULE 6740FOR WHEN A STOCK HAS BEEN SUSPENDED.

Sanction Details: THE FIRM CONSENTED TO A CENSURE AND A FINE OF $10,000 ($5,000 FORSEC RULE 15C2-11 AND NASD MARKETPLACE RULE 6740 VIOLATIONS AND$5,000 FOR THE SUPERVISION VIOLATIONS)

Firm Statement THE FIRM HAS CONSENTED TO THE FINDINGS WITHOUT ADMITTING ORDENYING THE ALLEGATIONS.



Disclosure 20 of 53

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Allegations: NASD RULES 2110, 4632(A), 4642(A) AND 6420(A) - FAILED WITHIN 90SECONDS AFTER EXECUTION, TO TRANSMIT THROUGH ACT LAST SALEREPORTS OF TRANSACTIONS IN NASDAQ NATIONAL MARKET SECURITIESAND FILED TO DESIGNATE THROUGH ACT SUCH LAST SALE REPORTS ASLATE; FAILED WITHIN 90 SECONDS AFTER EXECUTION, TO TRANSMITTHROUGH ACT LAST SALE REPORTS OF TRANSACTIONS IN NASDAQSMALLCAP SECURITIES AND FAILED TO DESIGNATE THROUGH ACT SUCHLAST SALE REPORTS AS LATE; FAILED, WITHIN 90 SECONDS AFTEREXECUTION, TO TRANSMIT THROUGH ACT LAST SALE REPORTS OFTRANSACTIONS IN ELIGIBLE SECURITIES AND FAILED TO DESIGNATETHROUGH ACT SUCH LAST SALE REPORTS AS LATE.















Resolution:


Sanction Details: 11/02/00GS: $7,500 PAID ON 07/05/00, INVOICE NO. 00-MS-385.

Regulator Statement NONE




Allegations: VIOLATION OF MARKETPLACE RULE 4632(A) BY FAILING TO TRANSMITWITHIN 90 SECONDS 21 LAST SALE REPORTS OF TRANSACTIONS INNASDAQ NATIONAL MARKET (NNM) SECURITIES AND FAILED TODESIGNATE THROUGH ACT SUCH LAST SALE REPORTS AS LATE. FAILURETO CORRECTLY DESIGNATE 31 LAST SALE REPORTS IN NNM SECURITIESAS ".SLD". VIOLATION OF MARKETPLACE RULE 4642(A) BY FAILING TOTRANSMIT WITHIN 90 SECONDS 26 LAST SALE REPORTS OFTRANSICTIONS IN NASDAQ SMALL CAP (SC) SECURITIES AND FAILED TODESIGNATE THROUGH ACT SUCH LAST SALE REPORTS AS LATE. FAILUTETO CORRECTLY DESIGNATE 6 LAST SALE REPORTS IN SC SECURITIES AS ".SLD". VIOLATION OF MARKETPLACE RULE 6420(A) BY FAILING TOTRANSMIT WITHIN 90 SECONDS ONE LAST SALE REPORT OF ATRANSACTION IN AN ELIGIBLE SECURITY AND FAILED TO DESIGNATETHROUGH ACT SUCH LAST SALE REPORT AS LATE. VIOLATION OFMARKETPLACE RULE 6620(A) BY FAILING TO TRANSMIT WITHIN 90SECONDS 396 LAST SALE REPORTS OF TRANSACTIONS IN OTC EQUITYSECURITIES AND FAILED TO DESIGNATE THROUGH ACT SUCH LAST SALEREPORTS AS LATE. FAILURE TO CORRECTLY DESIGNATE 31 LAST SALEREPORTS IN OTC EQUITY SECURITIES AS ".SLD". VIOLATION OF NASDCONDUCT RULE 2110 BY FAILING TO TRANSMIT WITHIN 90 SECONDS 1,024LAST SALE REPORTS (2.67% DURING A THREE MONTH PERIOD) OFTRANSACTIONS IN SECURITIES WHICH CONSTITUTES A PATTERN OF LATEREPORTING WITHOUT EXCEPTIONAL CIRCUMSTANCES.









Censure






VIOLATION OF MARKETPLACE RULE 4632(A) BY FAILING TO TRANSMITWITHIN 90 SECONDS 21 LAST SALE REPORTS OF TRANSACTIONS INNASDAQ NATIONAL MARKET (NNM) SECURITIES AND FAILED TODESIGNATE THROUGH ACT SUCH LAST SALE REPORTS AS LATE. FAILURETO CORRECTLY DESIGNATE 31 LAST SALE REPORTS IN NNM SECURITIESAS ".SLD". VIOLATION OF MARKETPLACE RULE 4642(A) BY FAILING TOTRANSMIT WITHIN 90 SECONDS 26 LAST SALE REPORTS OFTRANSICTIONS IN NASDAQ SMALL CAP (SC) SECURITIES AND FAILED TODESIGNATE THROUGH ACT SUCH LAST SALE REPORTS AS LATE. FAILUTETO CORRECTLY DESIGNATE 6 LAST SALE REPORTS IN SC SECURITIES AS ".SLD". VIOLATION OF MARKETPLACE RULE 6420(A) BY FAILING TOTRANSMIT WITHIN 90 SECONDS ONE LAST SALE REPORT OF ATRANSACTION IN AN ELIGIBLE SECURITY AND FAILED TO DESIGNATETHROUGH ACT SUCH LAST SALE REPORT AS LATE. VIOLATION OFMARKETPLACE RULE 6620(A) BY FAILING TO TRANSMIT WITHIN 90SECONDS 396 LAST SALE REPORTS OF TRANSACTIONS IN OTC EQUITYSECURITIES AND FAILED TO DESIGNATE THROUGH ACT SUCH LAST SALEREPORTS AS LATE. FAILURE TO CORRECTLY DESIGNATE 31 LAST SALEREPORTS IN OTC EQUITY SECURITIES AS ".SLD". VIOLATION OF NASDCONDUCT RULE 2110 BY FAILING TO TRANSMIT WITHIN 90 SECONDS 1,024LAST SALE REPORTS (2.67% DURING A THREE MONTH PERIOD) OFTRANSACTIONS IN SECURITIES WHICH CONSTITUTES A PATTERN OF LATEREPORTING WITHOUT EXCEPTIONAL CIRCUMSTANCES.


Resolution:


Sanction Details: THE FIRM CONSENTED FO A CENSURE AND FINE OF $7,500 FOR TRADEREPORTING VIOLATIONS.


Sanctions Ordered: Censure


Disclosure 21 of 53

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Docket/Case Number:



Allegations: ALLEGED FAILURE TO REPORT SECURITIES TRADING VOLUME TONASDAQ












Resolution:


Sanction Details: THE NASD IMPOSED A FINE OF $550

Sanctions Ordered: Monetary/Fine $550.00

Consent

Disclosure 22 of 53

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Docket/Case Number:






Resolution:




Consent

Disclosure 23 of 53

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Disclosure 23 of 53







Docket/Case Number:






Resolution:


Sanction Details: THE NASD IMPOSED A FINE OF $200. THE FIRM CONSENTED TO THEIMPOSITION OF THE FINE WITHOUT ADMITTING OR DENYING THEALLEGATION.


Consent

Disclosure 24 of 53

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Initiated By: CORPORATION COMMISSIONER OF THE STATE OF OREGON


Docket/Case Number: NONE



Allegations: ALLEGED VIOLATIONS OF THE BROKER-DEALER, AGNET AND SECURITIESREGISTRATION PROVISIONS OF THE OREGON SECURITIES LAWS.








Cease and Desist




Resolution:


Sanction Details: THE FIRM WAS ORDERED TO CEASE AND DESIST ACTING AS A BROKER-DEALER IN THE STATE OF OREGON UNTIL PROPERLY REGISTERED TO DOSO. IT WAS FURTHER ORDERED THAT THE FIRM CEASE AND DESIST ALLOFFERS FOR SALE AND SALES OF SECURITIES TO RESIDENTS OF THESTATE OF OREGON UNLESS SUCH SECURITIES WERE REGISTEREDPURSUANT TO SECTION 59.055 OF THE OREGON SECURITIES LAS ORUNLESS SUCH SECURITIES ARE EXEMPT FROM REGISTRATION

Firm Statement SIMULTANEOUS TO THE ENTRY OF THE ORDER, THE APPLICATION FORBROKER-DEALER REGISTRATION IN THE STATE OF OREGON WASGRANTED

Sanctions Ordered: Cease and Desist/Injunction

Consent

Disclosure 25 of 53

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Initiated By: NASD RAGULATION, INC.




Docket/Case Number: CMS990018AWC



Allegations: VIOLATION OF SECURITIES EXCHANGE ACT RULE 11AC1-1 ("SEC FIRMQUOTE RULE"), NASD CONDUCT RULE 3320 AND THE NASD MARKETPLACERULE 4613(B) ("NASD FIRM QUOTE RULE"). FAILURE TO ESTABLISH ANDMAINTAIN WRITTEN SUPERVISORY PROCEDURES REASONABLYDESIGNED TO ACHIEVE COMPLIANCE WITH THE APPLICABLE SECURITIESLAWS AND REGULATIONS CONCERNING THE SEC AND NASD FIRM QUOTERULES. VIOLATION OF NASD CONDUCT RULES 2110 AND 3010.










CENSURE


Resolution:


Sanction Details: WILSON-DAVIS WAS CENSURED AND FINED $8,000 ($5,000 FOR THEBACKING AWAY VIOLATIONS AND $3,000 FOR THE SUPERVISORYVIOLATION) AND AN UNDERTAKING TO REVISE THE FIRM'S WRITTENSUPERVISORY PROCEDURES RELATING TO FIRM QUOTE COMPLIANCE, INA MANNER NOT UNACCEPTABLE TO THE STAFF, SHALL BE SUBMITTED INTO THE NASD WITHIN 60 CALENDAR DAYS OF ACCEPTANCE OF THE AWCBY THE NAC

Firm Statement WILSON-DAVIS CONSENTED TO THE ENTRY OF THE FINDINGS OF NASDWITHOUT ADMITTING OR DENYING THE ALLEGATIONS



Disclosure 26 of 53

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Docket/Case Number: C3A990029


Allegations: 06/21/99GK: ON JUNE 10, 1999, DISTRICT NO. 3 NOTIFIEDRESPONDENTS WILSON-DAVIS & CO., INC. AND PAUL N. DAVIS THAT THELETTER OF AWC NO. C3A990029 WAS ACCEPTED; THEREFORE,RESPONDENTS ARE CENSURED AND FINED $6,000, JOINTLY ANDSEVERALLY - (NASD RULES 2110, 3010 AND 3070 - RESPONDENTMEMBER, ACTING THROUGH RESPONDENT DAVIS, FAILED TO REPORTCUSTOMER COMPLAINTS TO THE NASD AND FAILED TO TIMELY REPORT ACUSTOMER COMPLAINT WITHIN THE REQUISITE TIME PERIOD; AND,FAILED TO ENSURE THAT THE FIRM'S WRITTEN SUPERVISORYPROCEDURES WERE REASONABLY DESIGNED TO ENSURE COMPLIANCEWITH RULE 3070).












Resolution:


Sanction Details: FINED

Regulator Statement 10-28-99, $6,000 PAID J&S ON 7/1/99, INVOICE #99-3A-497








CENSURE





Allegations: VIOLATION OF NASD CONDUCT RULES 2110 AND 3070 BY FAILING TOREPORT CUSTOMER COMPLAINTS. VIOLATION OF NASD CONDUCT RULES2110 AND 3010 BY WHICH THE NASD NOTED THAT WILSON-DAVIS' WRITTENSUPERVISORY PROCEDURES REGARDING THE REPORTING OFCUSTOMER COMPLAINTS TO THE NASD WERE DEFICIENT.



Resolution:









Sanction Details: WILSON-DAVIS AND PAUL N. DAVIS WERE JOINTLY AND SEVERALLYCENSURED AND FINED $6,000

Firm Statement WILSON-DAVIS AND PAUL DAVIS CONSENTED TO THE FINDINGS OF THENASD WITHOUT ADMITTING OR DENYING THE ALLEGATIONS.


Disclosure 27 of 53

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Principal Product Type:


Allegations:



Resolution:


Sanction Details:

Regulator Statement LETTER OF ACCEPTANCE, WAIVER AND CONSENT NO. CMS980037 AWC.

ON APRIL 15, 1998, WILSON-DAVIS & COMPANY, INC. (WDCO) WASNOTIFIED THAT THE LETTER OF ACCEPTANCE, WAIVER AND CONSENT(AWC) IT SUBMITTED WAS ACCEPTED BY NASD REGULATION INC.'SDEPARTMENT OF ENFORCEMENT AND THE NATIONAL ADJUDICATORYCOUNCIL. THE AWC ALLEGES THAT THE FOLLOWING ACTIVITYOCCURRED:

WDCO FAILED TO DESIGNATE AS LATE TO ACT TWO TRANSACTIONS INNASDAQ SMALLCAP SECURITIES; FAILED TO REPORT TO ACT THECORRECT EXECUTION TIME IN ONE TRANSACTION IN A NASDAQSMALLCAP SECURITY; AND FAILED TO REPORT TO ACT THE CORRECTSYMBOL INDICATING WHETHER TEN TRANSACTIONS IN ELIGIBLESECURITIES WERE EXECUTED AS PRINCIPAL OR AGENT. THIS CONDUCTINVOLVING NASDAQ SMALLCAP SECURITIES CONSTITUTES SEPARATEANDDISTINCT VIOLATIONS OF NASD MARKETPLACE RULES 4642(a) AND6130(d)(7).

WDCO FAILED TO SHOW ON THE MEMORANDA OF 39 BROKERAGEORDERS THETERMS AND CONDITIONS OF EACH SUCH ORDER OR INSTRUCTIONS ANDOFANY MODIFICATION OR CANCELLATION THEREOF, THE ACCOUNT FORWHICHENTERED, THE TIME OF ENTRY, AND THE TIME OF EXECUTION ORCANCELLATION. THIS CONDUCT CONSTITUTES SEPARATE AND DISTINCTVIOLATIONS OF SEC RULES 17a-3(a)(6) AND NASD CONDUCT RULE3110(a).

IN ADDITION, WDCO FAILED TO ESTABLISH, MAINTAIN AND ENFORCEWRITTEN SUPERVISORY PROCEDURES REASONABLY DESIGNED TOACHIEVECOMPLIANCE WITH THE APPLICABLE SECURITIES LAWS, REGULATIONS,AND RULES REGARDING TRADE REPORTING AND RECORD KEEPING. THISCONDUCT CONSTITUTES A VIOLATION OF NASD CONDUCT RULES 2110AND3010. WDCO WAS CENSURED AND FINED $16,000.

**$16,000.00 PAID ON 5/19/98, INVOICE # 98-MS-423**








LETTER OF ACCEPTANCE, WAIVER AND CONSENT NO. CMS980037 AWC.

ON APRIL 15, 1998, WILSON-DAVIS & COMPANY, INC. (WDCO) WASNOTIFIED THAT THE LETTER OF ACCEPTANCE, WAIVER AND CONSENT(AWC) IT SUBMITTED WAS ACCEPTED BY NASD REGULATION INC.'SDEPARTMENT OF ENFORCEMENT AND THE NATIONAL ADJUDICATORYCOUNCIL. THE AWC ALLEGES THAT THE FOLLOWING ACTIVITYOCCURRED:

WDCO FAILED TO DESIGNATE AS LATE TO ACT TWO TRANSACTIONS INNASDAQ SMALLCAP SECURITIES; FAILED TO REPORT TO ACT THECORRECT EXECUTION TIME IN ONE TRANSACTION IN A NASDAQSMALLCAP SECURITY; AND FAILED TO REPORT TO ACT THE CORRECTSYMBOL INDICATING WHETHER TEN TRANSACTIONS IN ELIGIBLESECURITIES WERE EXECUTED AS PRINCIPAL OR AGENT. THIS CONDUCTINVOLVING NASDAQ SMALLCAP SECURITIES CONSTITUTES SEPARATEANDDISTINCT VIOLATIONS OF NASD MARKETPLACE RULES 4642(a) AND6130(d)(7).

WDCO FAILED TO SHOW ON THE MEMORANDA OF 39 BROKERAGEORDERS THETERMS AND CONDITIONS OF EACH SUCH ORDER OR INSTRUCTIONS ANDOFANY MODIFICATION OR CANCELLATION THEREOF, THE ACCOUNT FORWHICHENTERED, THE TIME OF ENTRY, AND THE TIME OF EXECUTION ORCANCELLATION. THIS CONDUCT CONSTITUTES SEPARATE AND DISTINCTVIOLATIONS OF SEC RULES 17a-3(a)(6) AND NASD CONDUCT RULE3110(a).

IN ADDITION, WDCO FAILED TO ESTABLISH, MAINTAIN AND ENFORCEWRITTEN SUPERVISORY PROCEDURES REASONABLY DESIGNED TOACHIEVECOMPLIANCE WITH THE APPLICABLE SECURITIES LAWS, REGULATIONS,AND RULES REGARDING TRADE REPORTING AND RECORD KEEPING. THISCONDUCT CONSTITUTES A VIOLATION OF NASD CONDUCT RULES 2110AND3010. WDCO WAS CENSURED AND FINED $16,000.

**$16,000.00 PAID ON 5/19/98, INVOICE # 98-MS-423**


Allegations: VIOLATION OF MARKETPLACE RULE 4642(A) BY FAILING TO DESIGNATE ASLATE TO ACT TWO TRANSACTIONS IN NASDAQ SMALLCAP SECURITIESAND FAILURE TO REPORT TO ACT THE CORRECT EXECUTION TIME IN ONETRANSACTION IN A NASDAQ SMALLCAP SECURITY. VIOLATION OFMARKETPLACE RULE 6130(D)(7) BY FAILING TO REPORT TO ACT THECORRECT SYMBOL INDICATING WHETHER TEN TRANSACTIONS INELIGIBLE SECURITIES WERE EXECUTED AS PRINCIPAL OR AGENT.VIOLATIONS OF SEC RULE 17A-3(A)(6) AND NASD CONDUCT RULE 3110(A)BY FAILING TO SHOW ON THE MEMORANDA OF THIRTY-NINE BROKERAGEORDERS THE TERMS AND CONDITIONS OF EACH SUCH ORDER ORINSTRUCTIONS AND OF ANY MODIFICATION OR CANCELLATION THEREOF,THE ACCOUNT FOR WHICH ENTERED, THE TIME OF ENTRY AND THE TIMEOF EXECUTION OR CANCELLATION. VIOLATION OF NASD CONDUCT RULES2110 AND 3010 BY FAILING TO ESTABLISH, MAINTAIN, AND ENFORCEWRITTEN SUPERVISORY PROCEDURES REASONABLY DESIGNED TOACHIEVE COMPLIANCE WITH THE APPLICABLE SECURITIES LAWS,REGULATIONS, AND RULES REGARDING TRADE REPORTING ANDRECORDKEEPING.











CENSURE





VIOLATION OF MARKETPLACE RULE 4642(A) BY FAILING TO DESIGNATE ASLATE TO ACT TWO TRANSACTIONS IN NASDAQ SMALLCAP SECURITIESAND FAILURE TO REPORT TO ACT THE CORRECT EXECUTION TIME IN ONETRANSACTION IN A NASDAQ SMALLCAP SECURITY. VIOLATION OFMARKETPLACE RULE 6130(D)(7) BY FAILING TO REPORT TO ACT THECORRECT SYMBOL INDICATING WHETHER TEN TRANSACTIONS INELIGIBLE SECURITIES WERE EXECUTED AS PRINCIPAL OR AGENT.VIOLATIONS OF SEC RULE 17A-3(A)(6) AND NASD CONDUCT RULE 3110(A)BY FAILING TO SHOW ON THE MEMORANDA OF THIRTY-NINE BROKERAGEORDERS THE TERMS AND CONDITIONS OF EACH SUCH ORDER ORINSTRUCTIONS AND OF ANY MODIFICATION OR CANCELLATION THEREOF,THE ACCOUNT FOR WHICH ENTERED, THE TIME OF ENTRY AND THE TIMEOF EXECUTION OR CANCELLATION. VIOLATION OF NASD CONDUCT RULES2110 AND 3010 BY FAILING TO ESTABLISH, MAINTAIN, AND ENFORCEWRITTEN SUPERVISORY PROCEDURES REASONABLY DESIGNED TOACHIEVE COMPLIANCE WITH THE APPLICABLE SECURITIES LAWS,REGULATIONS, AND RULES REGARDING TRADE REPORTING ANDRECORDKEEPING.


Resolution:


Sanction Details: THE FIRM CONSENTED TO A CENSURE AND FINE OF $16,000 (CONMPOSEDOF $1,000 FINE FOR TRADE REPORTING VIOLATIONS, A $5,000 FINE FORRECORD KEEPING VIOLATIONS, AND A $10,000 FINE FOR SUPERVISIONVIOLATIONS.




Disclosure 28 of 53

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Initiated By: VIRGINIA




Docket/Case Number: SEC 50076

URL for Regulatory Action:



Allegations:



Resolution:


Sanction Details:

Regulator Statement COMMONWEALTH OF VIRGINIA, EX REL. STATE CORPORATIONCOMMISSIONV. WILSON-DAVIS & CO., INC.; CASE NO. SEC 50076; BEFORE THECOMMONWEALTH OF VIRGINIA, STATE CORPORATION COMMISSION. ON9/17/85 THE VIRGINIA DIVISION OF SECURITIES AND RETAILFRANCHISING ENTERED A JUDGMENT OF COMPROMISE ANDSETTLEMENTPURSUANT TO WHICH WILSON-DAVIS WAS (1) FINED $6,500 AND (2)ENJOINED FROM TRANSACTING BUSINESS AS A BROKER-DEALER UNTILREGISTERED TO DO SO; EMPLOYING UNREGISTERED AGENTS; ANDOFFERINGOR SELLING UNREGISTERED SECURITIES IN VIOLATION OF THEVIRGINIA SECURITIES ACT. WILSON-DAVIS CONSENTED TO THE ORDERWITHOUT ADMITTING OR DENYING THE ALLEGATIONS SET FORTHTHEREIN.

Sanctions Ordered: Monetary/Fine $46,500.00Cease and Desist/Injunction

Consent







Initiated By: COMMONWEALTH OF VIRGINIA, STATE CORPORATION COMMISSION





Docket/Case Number: SEC850076



Allegations: ALLEGED VIOLATIONS OF THE BROKER-DEALER, AGENT, AND SECURITIESREGISTRATION PROVISIONS OF THE VIRGINIA CODE



Resolution:

Other Sanctions Ordered: THE FIRM WAS ENJOINED FROM TRANSACTING BUSINESS AS A BROKER-DEALER UNTIL REGISTERED; EMPLOYING UNREGISTERED AGENTS; ANDOFFERING OR SELLING UNREGISTERED SECURITIES IN VIOLATION OF THEVIRGINIA SECURITEIS ACT.

Sanction Details: A JUDGMENT AND COMPROMISE AND SETTLEMENT WAS ENTERED.

Sanctions Ordered: Monetary/Fine $6,500.00Cease and Desist/Injunction

Consent

Disclosure 29 of 53

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Initiated By: ALABAMA


Docket/Case Number: CD-85-22



Allegations: A RESIDENT OF MONTGOMERY,ALABAMA STATES THAT HE HASPURCHASED PENNY-STOCK FROM WILSON-DAVIS & COMPANY, INC.WILSON-DAVIS IS NOT REGISTERED AS A BROKER-DEALER IN ALABAMA.












Resolution:


Sanction Details: CEASE & DESIST ORDER


Decision


Initiated By: ALABAMA SECURITIES COMMISSION


Cease and Desist



Docket/Case Number: ADMIN. PRO. NO. CD-85-22



Allegations: VIOLATIONS OF THE BROKER-DEALER, AGENT AND SECURITIESREGISTRATION PROVISIONS AS DEFINED BY SECTIONS 8-6-3 AND 8-6-4 OFTHE CODE OF ALABAMA 1975



Resolution:


Sanction Details: A CONSENT ORDER WAS ENTERED WHICH PROVIDED THAT THE FIRMREFRAIN FROM VIOLATIONS OF THE SECURITIES ACT OF ALABAMA IN THEFUTURE. THE FIRM CONSENTED TO THE ENTRY OF THE ORDER WITHOUTADMITTING OR DENYING THE ALLEGATIONS CONTAINED THEREIN.


Other






A CONSENT ORDER WAS ENTERED WHICH PROVIDED THAT THE FIRMREFRAIN FROM VIOLATIONS OF THE SECURITIES ACT OF ALABAMA IN THEFUTURE. THE FIRM CONSENTED TO THE ENTRY OF THE ORDER WITHOUTADMITTING OR DENYING THE ALLEGATIONS CONTAINED THEREIN.

Disclosure 30 of 53

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Initiated By: GEORGIA




Docket/Case Number: 50-85-9518



Other Product Type(s): SECURITIES

Allegations: ALLEGED SALES BY UNREGISTERED BROKER-DEALER



Resolution:


Sanction Details: SETTLEMENT ORDER IN MATTER OF ALLEGED SALES BY UNREGISTEREDBROKER-DEALER.

Sanctions Ordered:

Consent


Initiated By: COMMISSIONER OF SECURITIES, STATE OF GEORGIA


Docket/Case Number: 50-85-9518


Allegations: ALLEGED VIOLATIONS OF THE BROKER-DEALER REGISTRATIONPROVISIONS OF THE GEORGIA SECURITIES ACT OF 1973, AS AMENDED








Suspension





Resolution:

Other Sanctions Ordered: THE FIRM WILL FILE A COPY OF ITS COMPLIANCE MANUAL WITH THECOMMISSIONER; THE FIRM WILL BE SUSPENDED FROM ACCEPTING ANYNEW ACCOUNTS WITH GEORGIA RESIDENTS FOR A PERIOD OF THIRTYDAYS (UNTIL 11/30/1985); THE FIORM WILL REIMBURSE THECOMMISSIONER FOR INVESTIGATIVE COSTS INCURRED IN THE AMOUNTOF $2000.

Sanction Details: THE FIRM WILL FILE A COPY OF ITS COMPLIANCE MANUAL WITH THECOMMISSIONER; THE FIRM WILL BE SUSPENDED FROM ACCEPTING ANYNEW ACCOUNTS WITH GEORGIA RESIDENTS FOR A PERIOD OF THIRTYDAYS (UNTIL 11/30/1985); THE FIORM WILL REIMBURSE THECOMMISSIONER FOR INVESTIGATIVE COSTS INCURRED IN THE AMOUNTOF $2000.

Firm Statement A SETTLEMENT ORDER WAS ENTERED WHICH SUSPENDED THE FIRMFROM ACCEPTING NEW ACCOUNTS WITH GEORGIA RESIDENTS FOR APERIOD OF THIRTY DAYS (UNTIL 11/30/1985) AND ORDERED THE FIRM TOREIMBURSE THE GEORGIA SECURITIES DIVISION $2,000 FOR THE COSTOF THE INVESTIGATION. THE FIRM AND SAMUEL H. WILSON CONSENTEDTO THE ENTRY OF THE SETTLEMENT ORDER WITHOUT ADMITTING ORDENYING THE ALLEGATIONS OF THE APRIL 9, 1985 NOTICE ANDPROPOSED ORDER, AND WAIVE THEIR RIGHT TO A HEARING.


Settled

Disclosure 31 of 53

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Docket/Case Number: N-VS-228

Allegations:













Resolution:


Sanction Details:

Regulator Statement NASDAQ COMPLAINT N-VS-228FILED 9/24/76


Consent


Initiated By: NASDAQ COMMITTEE OF THE NASD











Resolution:











Firm Statement THE NASD IMPOSED A FINE OF $100. THE FIRM CONSENTED TO THEIMPOSITION OF THE FINE.

Disclosure 32 of 53

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Allegations:



Resolution:


Sanction Details:

Regulator Statement NASDAQ COMPLAINT N-VS-250FILED 12/2/76


Consent


Initiated By: NASDAQ COMMITTEE OF THE NASD

















Resolution:



Firm Statement THE NASD IMPOSED A FINE OF $100. THE FIRM CONSENTED TO THEIMPOSITION OF THE FINE.



Disclosure 33 of 53

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Initiated By: MISSOURI








Allegations: NOT PROPERLY REGISTERED



Resolution: Stipulation and Consent








Sanction Details: RESPONDENT, ITS AGENTS,EMPLOYEES AND SERVANTS WERE ORDEREDTO CEASE AND DESIST ITS ACTIVITIES AS A BROKER-DEALER UNLESS ANDUNTIL IT IS PROPERLY REGISTERED AS SUCH.



Initiated By: STATE OF MISSOURI, SECRETARY OF STATE, DIVISION OF SECURITIES


Cease and Desist






Allegations: VIOLATIONS OF THE BROKER-DEALER REGISTRATION PROVISIONS OFTHE MISSOURI SECURITIES ACT



Resolution:


Sanction Details: THE FIRM IS TO CEASE ACTING AS A BROKER-DEALER IN THE STATE OFMISSOURI UNLESS PROPERLY REGISTERED UNDER THE PROVISIONS OFTHE MISSOURI UNIFORM SECURITIES ACT.

Firm Statement AN ORDER TO CEASE AND DESIST WAS ENTERED PROVIDING THAT THEFIRM CEASE ACTING AS A BROKER-DEALER IN THE STATE OF MISSOURIUNLESS PROPERLY REGISTERED UNDER THE PROVISIONS OF THEMISSOURI UNIFORM SECURITIES ACT. THE FIRM CONSENTED TO THEENTRY OF THE ORDER WITHOUT ADMITTING OR DENYING THEALLEGATIONS


Order






Disclosure 34 of 53

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Initiated By: NEBRASKA




Docket/Case Number: UNKNOWN



Other Product Type(s): UNREGISTERED SECURITIES

Allegations: WILSON-DAVIS & COMPANY,INC. WAS DENIED REGISTRATION AS ABROKER-DEALER IN THE STATE OF NEBRASKA AS IT HAD A DISCIPLINARYHISTORY. WILSON-DAVIS ALSO CONDUCTED BUSINESS IN NEBRASKAWITHOUT BEING A REGISTEREDBROKER-DEALER. THE FIRM ALSO SOLD UNREGISTERED SECURITIES.



Resolution:


Sanction Details: WILSON-DAVIS & COMPANY,INC. WAS DENIED REGISTRATION AS ABROKER-DEALER IN THE STATE OF NEBRASKA

Sanctions Ordered: Revocation/Expulsion/Denial

Decision


Initiated By: STATE OF NEBRASKA, BUREAU OF SECURITIES



Allegations: ALLEGED VIOLATIONS OF THE BROKER-DEALER AND AGENTREGISTRATION PROVISIONS OF THE NEBRASKA REVISED STATUTES








Denial






Resolution:


Sanction Details: ORDER DENYING THE BROKER-DEALER APPLICATION OF THE FIRM

Firm Statement THE NEBRASKA BUREAU OF SECURITIES DETERMINED THAT DUE TO THEPRESENT VIOLATIONS AND PRIOR SANCTIONS CITED BY THE SEC ANDTHE NASD THAT IT WAS IN THE BEST INTEREST OF THE PUBLIC TO DENYTHE APPLICATION OF THE FIRM, FOR REGISTRATION AS A BROKER-DEALER. AN ORDER DENYING BROKER-DEALER REGISTRATION WASENTERED. THE FIRM REQUESTED A HEARING REGARDING THE DENIAL

Sanctions Ordered: Revocation/Expulsion/Denial

Order

Disclosure 35 of 53

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Initiated By: MASSACHUSETTS SECURITIES DIVISION




Docket/Case Number: R-93-148




Allegations: FILED AN APPLICATION FOR REGISTRATION AS ABROKER-DEALER WHICH WAS MATERIALLY INCOMPLETE, AND FAILED TOCOMPLETE THE APPLICATION.









Resolution:


Sanction Details: Not Provided

Regulator Statement PROCEEDING INITIATED TO DENY THE APPLICATION OFWILSON-DAVIS & CO., INC. ("WD") FOR REGISTRATION AS ABROKER-DEALER IN MASSACHUSETTS, AND THE APPLICATIONS OF ITSAGENT JAMES M. WALKER, AND ITS OFFICERS AND DIRECTORS. WD FILEDAN APPLICATION FOR REGISTRATION ON APRIL 20, 1993 AND, AS OFTHE DATE OF INITIATION OF THIS PROCEEDING, HAD FAILED TORESPOND FULLY TO THE DIVISION'S DEFICIENCY LETTERS ANDREQUESTSFOR ADDITIONAL INFORMATION. PURSUANT TO AN OFFER OFSETTLEMENTWHICH WAS SUBMITTED BY TH RESPONDENTS, A CONSENT ORDER WASENTERED PURSUANT TO WHICH WD WITHREW ITS APPLICAION FORREGISTRATION IN MA AND THE PROCEEDING WAS DISMISSED.

Sanctions Ordered:

Consent


Initiated By: COMMONWEALTH OF MASSACHUSETTS


Other


VOLUNTARY WITHDRAWAL OF APPLICATION FOR BROKER-DEALERREGISTRATION


Docket/Case Number: R-93-148



Allegations: ALLEGED VIOLATIONS OF THE BROKER-DEALER AND AGENTREGISTRATION PROVISIONS OF SECTION 202(A) OF M.G.L. C. 110A OF THEMASSACHUSETTS UNIFORM SECURITIES ACT.


Resolution: Order 84©2020 FINRA. All rights reserved. Report about WILSON-DAVIS & CO., INC.






Resolution:

Other Sanctions Ordered: THE FIRM SHALL VOLUNTARILY FILE WITH THE CRD AND THE STATE OFMASSACHUSETTS, WITHIN 10 DAYS, A FORM BDW FOR THE WITHDRAWALOF THE FIRM'S APPLICATION FOR BROKER-DEALER REGISTRATION. UPONTHE FILING OF THE FROM BDW, MASSACHUSETTS DISMISSED THEPROCEEDING.

Sanction Details: THE FIRM SHALL IMPLEMENT AND MAINTAIN PROCEDURES REASONABLYDESIGNED TO PREVENT AND DETECT VIOLATIONS OF THE SECURITIESLAWS; AND SHALL COMPLY HENCEFORTH WITH THE MASSACHUSETTSUNIFORM SECURITIES ACT, M.G.L. C 110A

Firm Statement ON OR ABOUT APRIL 20, 1993, THE FIRM FILED AN APPLICATION FORBROKER-DEALER REGISTRATION IN THE STATE OF MASSACHUSETTS("MA"). ON MAY 3, 1993, MA REQUESTED BY LETTER THAT ADDITIONALINFORMATION BE PROVIDED. THE FIRM FAILED TO RETURN ALLREQUESTED INFORMATION IN THE TIME SPECIFIED. ON 10/25/1993, MAENTERED AN ORDER STATING THAT THE FIRM WOULD VOLUNTARILY FILEA FORM BDW TO WITHDRAW ITS APPLICATION FOR BROKER-DEALERREGISTRATION AND THE FIRM WAS FURTHER ORDERED TO IMPLEMENTAND MAINTAIN PROCEDURES REASONABLY DESIGNED TO PREVENT ANDDETECT VIOLATIONS OF THE SECURITIES LAWS; AND SHALL COMPLYHENCEFORTH WITH THE MASSACHUSETTS UNIFORM SECURITIES ACT,M.G.L. C 110A.THIS ACTION WAS DISMISSED BY MA ON 10/25/1993

Sanctions Ordered:

Order

Disclosure 36 of 53

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Allegations:









Resolution:


Sanction Details:

Regulator Statement COMPLAINT NO. C3A920007 (DISTRICT NO. 3) FILED JANUARY 21, 1992AGAINST WILSON-DAVIS & CO., INC., SAMUEL HENRY WILSON, AND LYLEWESLEY DAVIS ALLEGING VIOLATIONS OF ARTICLE III, SECTIONS 1 AND4 OF THE RULES OF FAIR PRACTICE IN THAT, IN VIOLATION OF SECRULE 15c3-3(b), RESPONDENT MEMBER, ACTING THROUGH RESPONDENTDAVIS, DELIVERED SECURITIES THAT CREATED OR INCREASED ADEFICIENCY IN THE QUANTITY OF THOSE SECURITIES WHICH WEREREQUIRED TO BE IN POSSESSION OR CONTROL OF RESPONDENTMEMBER;FAILED TO CANCEL OR OTHERWISE LIQUIDATE THREE TRANSACTIONSWITHIN THE TIME PERIOD REQUIRED BY REGULATION T OF THE FEDERALRESERVE BOARD; AND, RESPONDENT MEMBER, ACTING THROUGHRESPONDENT WILSON, EFFECTED 16 TRANSACTIONS AT UNFAIR ANDUNREASONABLE PRICES BASED ON ALL RELEVANT CIRCUMSTANCES INTHATRESPONDENT MEMBER CHARGED PRICES IN THESE TRANSACTIONSWHICHINCLUDED MARK-UPS OR MARK-DOWNS BETWEEN 5.22 AND 16.58PERCENT,WITH GROSS PROFITS RANGING BETWEEN $119 AND $1,994.

DECISION RENDERED JULY 13, 1992, WHEREIN THE OFFER OFSETTLEMENT SUBMITTED BY RESPONDENTS WAS ACCEPTED;THEREFORE,RESPONDENTS MEMBER AND WILSON ARE CENSURED AND FINED $5,000,JOINTLY AND SEVERALLY AND REQUIRED TO REPAY $3,055 TO THECUSTOMERS TO WHOM THEY SOLD SECURITIES AT UNFAIR PRICES ANDSHALL PROVIDE EVIDENCE OF SUCH REPAYMENT TO THE NASD DISTRICT3STAFF WITHIN 30 DAYS OF THIS ORDER; AND, RESPONDENT DAVIS ISCENSURED AND FINED $5,000. ***$5,000.00 J&S PAID ON 8/11/92 INVOICE #92-3A-703***


Consent

i86©2020 FINRA. All rights reserved. Report about WILSON-DAVIS & CO., INC.






Initiated By: NASD DISTRICT BUSINESS CONDUCT COMMITTEE FOR DIST 3




CENSURE





Allegations: ALLEGED VIOLATIONS OF SEC RULE 15C3-3(B) AND ARTICLE III, SECTION 1OF THE NASD'S RULES OF FAIR PRACTICE BY THE DELIVERY OFSECURITIES WHICH CREATED OR INCREASED A DEFICIENCY IN THEQUANTITY OF THOSE SECURITIE WHICH WERE REQUIRED TO BE IN THEPOSSESSION OR CONTROL OF THE FIRM; VIOLATION OF FED RESERVEBOARD REGULATION T, IN VIOLATION OF ARTICLE III, SECTION I, BYFAILING TO CANCEL OR OTHERWISE LIQUIDATE TRANSACTIONS IN THEPERIOD REQUIRED; AND VIOLATION OF ARTICLE III, SECTIONS 1 AND 4 OFTHE RULES OF FAIR PRACTICE BY EFFECTING SIXTEEN TRANSACTIONSWITH CUSTOMERS AT PRICES WHICH WERE NOT FAIR AND REASONABLE



Resolution:


Sanction Details: THE FIRM AND SAMUEL WILSON WERE CENSURED AND FINED $5,000,JOINTLY AND SEVERALLY. IN ADDITION THEY WERE REQUIRED TO REPAYTHE CUSTOMERS TO WHOM THEY SOLD SECURITIES AT UNFAIR PRICESTHE AMOUNT OF THE OVERCHARGE AND SHALL PROVIDE PROOF OF THEOVERCHARGE WITHIN 30 DAYS.ADDITIONALLY, LYLE DAVIS WAS CENSURED FINED $5,000


Decision

Disclosure 37 of 53

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Allegations:



Resolution:


Sanction Details:

Regulator Statement MARKET SURVEILLANCE COMMITTEE COMPLAINT #CMS910021 AWC: (A)LETTER OF ACCEPTANCE, WAIVER AND CONSENT FILED SEPTEMBER 19,1991 AGAINST RESPONDENT MEMBER WILSON-DAVIS & COMPANYALLEGINGVIOLATIONS OF PART VI, SECTION 2(d) OF SCHEDULE D FOR ENTERINGNASDAQ QUOTATIONS CONTAINING EXCESS SPREADS.

THE LETTER OF ACCEPTANCE, WAIVER AND CONSENT WAS ACCEPTED BYTHE MARKET SURVEILLANCE COMMITTEE ON NOVEMBER 11, 1991 AND BYTHE NATIONAL BUSINESS CONDUCT COMMITTEE ON DECEMBER 16, 1991. ***$1,000.00 FINE ***$1,000.00 PAID ON 12/30/91 INVOICE #91-MS-1480***


Consent



Allegations: ALLEGED VIOLATIONS OF PART IV, SECTION 2(D) OF SCEDULE D OF THENASD'S BYLAWS FOR QUOTATIONS ENTERED INTO THE NASDAQ SYSTEMSTHAT WERE NOT REASONABLY RELATED TO THE PREVAILING MARKET.
















Resolution:


Sanction Details: THE NASD FINED THE FIRM $1000

Firm Statement THE FIRM ACCEPTED FINE IMPOSED BY THE AWC WITHOUT ADMITTING ORDENYING THE ALLEGATIONS CONTAINED IN THE AWC



Disclosure 38 of 53

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Docket/Case Number: MS-1040-AWC



Allegations:



Resolution: Acceptance, Waiver & Consent(AWC)








Sanction Details:

Regulator Statement MARKET SURVEILLANCE COMMITTEE COMPLAINT #MS-1040-AWC (A)LETTEROF ACCEPTANCE, WAIVER AND CONSENT FILED JANUARY 21, 1991AGAINST RESPONDENT MEMBER ALLEGED THAT WILSON-DAVIS & CO.,INC.(WDCO) A MEMBER, CHARGED EXCESSICVE MARK-UPS RANGIN FROM12% TO33% IN TWELVE OF FIFTEEN SALES EXECUTED DURING TTHE PERIODJANUARY 8, 1987 THROUGH JANUARY 29, 1987.

THE LETTER OF ACCEPTANCE, WAIVE AND CONSENY WAS ACCEPTED BYTHEMARKET SURVEILLANCE COMMITTEE ON FEBRUARY 1, 1991 AND BY THENATIONAL BUSINESS CONDUCT COMMITTEE ON APRIL 10, 1991,CENSUREDAND FINE $5,000.00 ***$5,000.00 PAID ON 5/15/91 INVOICE #91-MS-496***



Initiated By: THE MARKET SURVEILLANCE COMMITTEE OF THE NASD




CENSURE


Docket/Case Number: MS-1040-ACW


Other Product Type(s): IPO OF GREAT AMERICAN SODA POP AND WATER SHOP, INC.

Allegations: ALLEGED VIOLATIONS OF ARTICLE III, SECTIONS 1 AND 4 OF THE NASD'SRULES OF FAIR PRACTICE FOR EXCESSIVE MARK-UPS.


Resolution: Acceptance, Waiver & Consent(AWC)90©2020 FINRA. All rights reserved. Report about WILSON-DAVIS & CO., INC.






Resolution:


Sanction Details: THE FIRM WAS CENSURED AND FINED $5,000

Firm Statement THE FIRM ENTERED INTO THE AWC WITH CENSURED AND FINED IT $5,000.IN ADDITION THE FIRM IS REQUIRED TO ADDRESS CORRECTIVEMEASURES TAKEN TO PREVENT RECURRENCE OF THE VIOLATIONS. THEFIRM ACCEPTED THE AWC WITHOUT ADMITTING OR DENYING THEALLEGATIONS CONTAINED THEREIN.



Disclosure 39 of 53

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Docket/Case Number: DEN-954



Allegations:



Resolution:


Sanction Details:

Regulator Statement COMPLAINT NUMBER DEN-954 (DISTRICT NO. 3) FILED MAY 24, 1990AGAINST RESPONDENTS WILSON-DAVIS COMPANY, INC. AND LYLE W.DAVIS ALLEGING VIOLATIONS OF ARTICLE III, SECTION 1 OF THERULES OF FAIR PRACTICE IN THAT RESPONDENT MEMBER, ACTINGTHROUGH RESPONDENT DAVIS, FAILED TO OBTAIN AND MAINTAINPHYSICAL POSSESSION OR CONTROL OF FULLY-PAID SECURITIES; FAILEDTO MAINTAIN INFORMATION REQUIRED PURSUANT TO SEC RULE15c2-11(a)(3) FOR SECURITIES IN WHICH IT FURNISHED QUOTATIONS;AND, FAILED TO CANCEL OR LIQUIDATE CUSTOMERS' TRANSACTIONSTHATWERE NOT PAID FOR WITHIN THE REQUIRED TIME.

AMENDED COMPLAINT FILED MAY 30, 1990 TO DELETE THE SECONDCAUSEOF COMPLAINT CONCERNING RESPONDENTS' FAILURE TO MAINTAININFORMATION REQUIRED PURSUANT TO SEC RULE 15c2-11.

DECISION RENDERED OCTOBER 11, 1990, WHEREIN RESPONDENTS ARECENSURED, FINED $5,000, REQUIRED TO IMPLEMENT A SYSTEM WITHIN90 DAYS FROM THE DATE OF THIS DECISION THAT WILL ALLOW THE FIRMTO INTERFACE WITH ITS CLEARING CORPORATION TO PREVENT THEOCCURRENCE OF A FAILURE TO MAINTAIN POSSESSION AND CONTROL OFFULLY-PAID SECURITIES, AND ASSESSED COSTS IN THE AMOUNT OF$527.50, JOINTLY AND SEVERALLY. IF NO FURTHER ACTION, DECISIONIS FINAL NOVEMBER 24, 1990.

NOVEMBER 24, 1990 - DECISION IS FINAL. ***$56527.50 J&S PAID ON 11/5/90 INVOICE #90-03-1190***


Decision






COMPLAINT NUMBER DEN-954 (DISTRICT NO. 3) FILED MAY 24, 1990AGAINST RESPONDENTS WILSON-DAVIS COMPANY, INC. AND LYLE W.DAVIS ALLEGING VIOLATIONS OF ARTICLE III, SECTION 1 OF THERULES OF FAIR PRACTICE IN THAT RESPONDENT MEMBER, ACTINGTHROUGH RESPONDENT DAVIS, FAILED TO OBTAIN AND MAINTAINPHYSICAL POSSESSION OR CONTROL OF FULLY-PAID SECURITIES; FAILEDTO MAINTAIN INFORMATION REQUIRED PURSUANT TO SEC RULE15c2-11(a)(3) FOR SECURITIES IN WHICH IT FURNISHED QUOTATIONS;AND, FAILED TO CANCEL OR LIQUIDATE CUSTOMERS' TRANSACTIONSTHATWERE NOT PAID FOR WITHIN THE REQUIRED TIME.

AMENDED COMPLAINT FILED MAY 30, 1990 TO DELETE THE SECONDCAUSEOF COMPLAINT CONCERNING RESPONDENTS' FAILURE TO MAINTAININFORMATION REQUIRED PURSUANT TO SEC RULE 15c2-11.

DECISION RENDERED OCTOBER 11, 1990, WHEREIN RESPONDENTS ARECENSURED, FINED $5,000, REQUIRED TO IMPLEMENT A SYSTEM WITHIN90 DAYS FROM THE DATE OF THIS DECISION THAT WILL ALLOW THE FIRMTO INTERFACE WITH ITS CLEARING CORPORATION TO PREVENT THEOCCURRENCE OF A FAILURE TO MAINTAIN POSSESSION AND CONTROL OFFULLY-PAID SECURITIES, AND ASSESSED COSTS IN THE AMOUNT OF$527.50, JOINTLY AND SEVERALLY. IF NO FURTHER ACTION, DECISIONIS FINAL NOVEMBER 24, 1990.

NOVEMBER 24, 1990 - DECISION IS FINAL. ***$56527.50 J&S PAID ON 11/5/90 INVOICE #90-03-1190***


Initiated By: NASD DISTRICT BUSINESS CONDUCT COMMITTEE FOR DIST 3




Docket/Case Number: DEN-954



Allegations: ALLEGED VIOLATIONS OF ARTICLE III, SECTION 1 OF THE NASD'S RULESOF FAIR PRACTICE BY FAILING TO MAINTAIN POSSESSION AND CONTROLOF SECURITIES AND FAILING TO COMPLY WITH REGULATION T OF THEFEDERAL RESERVE BOARD.








CENSURE


Resolution:


Sanction Details: THE FIRM AND LYLE W. DAVIS SHALL BE CENSURED, FINED $5,000 AND BEREQUIRED TO IMPLEMENT A SYSTEMS WITHIN 90 DAYS (BY 01/09/1991)THAT WILL ALLOW THE FIRM TO INTERFACE WITH ITS CLEARINGCORPORATION TO PREVENT THE OCCURRENCE OF A FAILURE TOMAINTAIN POSSESSION AND CONTROL OF FULLY PAID SECURITIES.ADDITIONALLY THE COSTS OF THE PROCEEDING ($527.50) SHALL BEASSESSED AGAINST THE RESPONDENTS, JOINTLY AND SEVERALLY.


Decision

Disclosure 40 of 53

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Docket/Case Number: DEN-856-AWC



Allegations:



Resolution:


Sanction Details:

Sanctions Ordered: CensureMonetary/Fine $500.00







Sanction Details:

Regulator Statement ON JUNE 26, 1989, THE LETTER OF ACCEPTANCE, WAIVER AND CONSENTNO. DEN-856-AWC (DISTRICT NO. 3) SUBMITTED BY RESPONDENTSWILSON-DAVIS & CO., INC. AND LYLE W. DAVIS WAS ACCEPTED;THEREFORE, THEY ARE CENSURED AND FINED $500.00, JOINTLY ANDSEVERALLY - (ARTICLE III, SECTION 1 OF THE RULES OF FAIRPRACTICE - RESPONDENT MEMBER, OPERATING THROUGH RESPONDENTDAVIS, FAILED TO PREPARE WEEKLY RECORDS WHICH WOULD ALLOWTHEFIRM TO DETERMINE WHETHER ITS MARGIN ACCOUNTS WERECURRENTLY ANDPROPERLY COLLATERALIZED; FAILED TO MAINTAIN COMPLETEINFORMATIONON ALL OF ITS ACTIVE OPTION ACCOUNTS; AND, ON 18 OCCASIONS,FAILED TO PROMPTLY TRANSMIT CUSTOMER FUNDS TO THE ESCROWACCOUNT). *** $500.00 PAID J&S ON 7/7/89 INVOICE #89-03-183.***






CENSURE


Docket/Case Number: DEN-856/AWC



Allegations: ALLEGATIONS OF FAILURE TO PREPARE AT LEAST WEEKLY RECORDSRELATING TO MARGIN ACCOUNT COLLATERAL; FAILURE TO MAINTAINCOMPLETE INFORMATION ON ALL OF ITS ACTIVE OPTION ACCOUNTS; ANDFAILURE TO PROMPTLY TRANSMIT CUSTOMER FUNDS TO THE ESCROWACCOUNT ON 18 OCCASIONS.



Resolution:









Sanction Details: THE NASD IMPOSED A FINE OF $500 AND CENSURE, JOINTLY ANDSEVERALLY AGAINST THE FIRM AND LYLE DAVIS.

Firm Statement THE NASD IMPOSED A FINE OF $500 AND CENSURE, JOINTLY ANDSEVERALLY AGAINST THE FIRM AND LYLE DAVIS. THE FIRM AND LYLEDAVIS CONSENTED TO THE IMPOSITION OF THE FINE AND CENSUREWITHOUT ADMITTING OR DENYING THE ALLEGATIONS.


Disclosure 41 of 53

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Allegations:



Resolution:


Sanction Details:

Regulator Statement 3/14/89-LITIGATION, ACTIONS AND PROCEEDINGS BULLETIN VOLUME 51,BULLETIN NO. 1, PAGE 73 DISCLOSES: MARKET SURVEILLANCECOMMITTEECOMPLAINT #N-VS-878 FILED 9/13/84, ALLEGING FAILURE TO REPORTNASDAQ VOLUME. DECISION RENDERED 10/2/84 WHEREIN WILSON-DAVIS& CO., INC. WAS FINED $500.00.


Decision


















Resolution:


Sanction Details: THE NASD IMPOSED A FINE OF $500.

Firm Statement THE NASD IMPOSED A FINE OF $500. THE FIRM CONSENTED TOTHEIMPOSITION OF THE FINE WITHOUT ADMITTING OR DENYING THEALLEGATIONS



Disclosure 42 of 53

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Allegations:











Resolution:


Sanction Details:

Regulator Statement MARKET SURVEILLANCE COMMITTEE COMPLAINT #MS-617-AWC:

LETTER OF ACCEPTANCE, WAIVER AND CONSENT (AWC) FILEDSEPTEMBER25, 1987 AGAINST RESPONDENT WILSON-DAVIS & CO., INC. ALLEGINGVIOLATIONS OF PART VI, SECTION 4(a) OF SCHEDULE D IN THATRESPONDENT FAILED TO REPORT ITS NASDAQ VOLUME.

THE AWC WAS ACCEPTED BY THE MARKET SURVEILLANCE COMMITTEEONNOVEMBER 5, 1987 AND BY THE NATIONAL BUSINESS CONDUCTCOMMITTEEON NOVEMBER 24, 1987. $250 FINE

**$250 FINE PAID 5/9/88**


Consent




















Resolution:



Firm Statement THE FIRM ENTERED INTO AN ACCEPTANCE, WAIVER AND CONSENT INWHICH THE NASD IMPOSED A FINE OF $250. THE FIRM CONSENTEDTOTHE IMPOSITION OF THE FINE WITHOUT ADMITTING OR DENYING THEALLEGATIONS SET FORTH IN THE AWC



Disclosure 43 of 53

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Initiated By: ILLINOIS








Allegations: ILLINOIS ALLEGED THAT WILSON DAVIS FAILED TO SUPERVISE THEIRAGENT WHICH RESULTED IN HIM COMMITTING A VIOLATION OF THEILLINOIS SECURITIES LAW OF 1953. WILSON DAVIS NEITHER ADMITS NORDENIES THE ABOVE REFERENCED ALLEGATION.



Resolution:


Consent







Sanction Details: BY MEANS OF A CONSENT ORDER, WILSON DAVIS HAS BEEN CENSUREDIN THE STATE OF ILLINOIS.



Initiated By: STATE OF ILLINOIS, SECURITIES DEPARTMENT


Censure






Allegations: ALLEGED VIOLATIONS OF THE BROKER-DEALER AND AGENTREGISTRATION PROVISIONS OF THE ILLINOIS SECURITIES LAW.



Resolution:


Sanction Details: A CONSENT ORDER OF SANCTION WAS ENTERED AGAINST THE FIRM ANDIMPOSES AN OBILIGATION ON THE FIRM TO MAKE A $1,000 CONTRIBUTIONTO THE ILLINOIS INVESTOR PROTECTION AND EDUCATION PROGRAM. INADDITION, THE ORDER PROHIBITS THE FIRM FROM OFFERING ORSELLING SECURITIES IN ILLINOIS UNLESS REGISTERED. THE FIRMEXECUTED A STIPULATION AND CONSENT TO THE ENTRY OF THE ORDERWITHOUT ADMITTING OR DENYING THE ALLEGATIONS.


Consent

Disclosure 44 of 53

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Initiated By: WISCONSIN




Docket/Case Number: X-2147(E)



Other Product Type(s): SECURITIES

Allegations: TRANSACTIONS IN SECURITIES BY UNLICENSED BROKER-DEALER;EMPLOYMENT OF UNLICENSED AGENTS.



Resolution:


Sanction Details: ORDER OF PROHIBITION

Sanctions Ordered:

Consent


Initiated By: COMMISSIONER OF SECURITIES, STATE OF WISCONSIN


Prohibition



Docket/Case Number: X-2147



Allegations: ALLEGED VIOLATIONS OF THE BROKER-DEALER AND AGENTREGISTRATION PROVISIONS OF THE WISCONSIN STATUTES









Resolution:

Other Sanctions Ordered: THE FIRM, ITS SUCCESSORS, AFFILIATES, CONTROLLING PERSONS, ANDANY ENTITY OR PERSON DIRECTLY OR INDIRECTLY CONTROLLED ORORGANIZED BY OR ON ITS BEHALF ARE PROHIBITED FROM TRANSACTINGBUSINESS AS A BROKER-DEALER IN WISCONSIN UNLESS LICENSED OREXEMPT. FURTHER THEY ARE ALSO PROHIBITED FROM EMPLOYING ANAGENT TO REPRESENT IT IN WISCONSIN UNLESS THE AGENT IN LICENSEDOR EXCEPTED FROM THE LICENSING REQUIREMENTS.

Sanction Details: THE FIRM, ITS SUCCESSORS, AFFILIATES, CONTROLLING PERSONS, ANDANY ENTITY OR PERSON DIRECTLY OR INDIRECTLY CONTROLLED ORORGANIZED BY OR ON ITS BEHALF ARE PROHIBITED FROM TRANSACTINGBUSINESS AS A BROKER-DEALER IN WISCONSIN UNLESS LICENSED OREXEMPT. FURTHER THEY ARE ALSO PROHIBITED FROM EMPLOYING ANAGENT TO REPRESENT IT IN WISCONSIN UNLESS THE AGENT IN LICENSEDOR EXCEPTED FROM THE LICENSING REQUIREMENTS.

Firm Statement AN ORDER OF PROHIBITION WAS ENTERED AGAINST THE FIRM. THE FIRMCONSENTED TO THE ENTRY OF THE ORDER WITHOUT ADMITTING ORDENYING THE ALLEGATIONS.

Sanctions Ordered:

Consent

Disclosure 45 of 53

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Initiated By: ILLINOIS








Allegations: SALE OF UNREGISTERED SECURITIES, UNREGISTERED SALESPERSONS









Resolution:

Other Sanctions Ordered: A CONSENT ORDER OF PROHIBITION AND ASESSED COSTS OFINVESTIGATION IN THE AMOUNT OF $1,000.00

Sanction Details: STIPULATION ENTERED BY WILSON DAVIS & CO., INC. ILLINOISSECRETARY OF STATE HAS ISSUED A CONSENT ORDER OF PROHIBITIONAND ASESSED COSTS OF INVESTIGATION IN THE AMOUNT OF $1,000.00.WILSON DAVIS HAS ABANDONED A PENDING REGISTRATION APPLICATIONAND AGREED NOT TOFILE A NEW APPLICATION FOR A PERIOD OF 2 YEARS FROM THE DATE OFORDER.

Sanctions Ordered:

Stipulation and Consent


Initiated By: ILLINOIS DEPARTMENT OF SECURITIES


Prohibition






Allegations: ALLEGED VIOLATIONS OF THE BROKER-DEALER, AGENT AND SECURITIESREGISTRATION PROVISIONS OF THE ILLINOIS SECURITIES LAWS.



Resolution:

Other Sanctions Ordered: THE FIRM WILL NOT FILE AN APPLICATION AS A DEALER IN THE STATE OFILLINOIS FOR A PERIOD OF TWO YEARS. THE FIRM SHALL NOTIFY ALLRESIDENTS OF THE STATE OF ILLINOIS FOR WHICH IT HOLDS SECURITIESOR MAINTAINS ACCOUNTS AS A DEALER AND RETURN ALL FUNDS AND/ORSECURITIES HELD BY THE FIRM OR TRANSFER THE ACCOUNT(S) AND THECONTENTS THEROF TO A DEALER OF THE CUSTOMER'S CHOICE.


Consent






THE FIRM WILL NOT FILE AN APPLICATION AS A DEALER IN THE STATE OFILLINOIS FOR A PERIOD OF TWO YEARS. THE FIRM SHALL NOTIFY ALLRESIDENTS OF THE STATE OF ILLINOIS FOR WHICH IT HOLDS SECURITIESOR MAINTAINS ACCOUNTS AS A DEALER AND RETURN ALL FUNDS AND/ORSECURITIES HELD BY THE FIRM OR TRANSFER THE ACCOUNT(S) AND THECONTENTS THEROF TO A DEALER OF THE CUSTOMER'S CHOICE.

Sanction Details: THE FIRM WILL NOT FILE AN APPLICATION AS A DEALER IN THE STATE OFILLINOIS FOR A PERIOD OF TWO YEARS. THE FIRM SHALL NOTIFY ALLRESIDENTS OF THE STATE OF ILLINOIS FOR WHICH IT HOLDS SECURITIESOR MAINTAINS ACCOUNTS AS A DEALER AND RETURN ALL FUNDS AND/ORSECURITIES HELD BY THE FIRM OR TRANSFER THE ACCOUNT(S) AND THECONTENTS THEROF TO A DEALER OF THE CUSTOMER'S CHOICE. THEFIRM WITHDREW ITS APPLICATION FOR REGISTRATION

Firm Statement AN ORDER OF PROHIBITION WAS ENTERED WHICH PROVIDED THAT THEFIRM WILL NOT FILE AN APPLICATION AS A DEALER IN THE STATE OFILLINOIS FOR A PERIOD OF TWO YEARS; THAT THE FIRM SHALL NOTIFY ALLRESIDENTS OF THE STATE OF ILLINOIS FOR WHICH IT HOLDS SECURITIESOR MAINTAINS ACCOUNTS AS A DEALER AND RETURN ALL FUNDS AND/ORSECURITIES HELD BY THE FIRM OR TRANSFER THE ACCOUNT(S) AND THECONTENTS THEROF TO A DEALER OF THE CUSTOMER'S CHOICE; AND THEFIRM SHALL REIMBURSE THE STATE OF ILLINOIS $5000 FOR THE COST OFTHE INVESTIGATION. THE FIRM STIPULATED AND CONSENTED TO THEENTRY OF THE ORDER WITHOUT ADMITTING OR DENYING THEALLEGATIONS SET FORTH THEREIN.

Disclosure 46 of 53

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Docket/Case Number: AWC-19



Allegations:



Resolution: Decision








Sanction Details:

Regulator Statement COMP. AWC-19 FILED 07/22/81, DIST. 3.DECISION, 07/22/81, CENSURED; FINED$1,000.00 JOINTLY AND SEVERALLY.ALL RIGHTS WAIVED.COMPLAINT FINAL 07/22/81.FINES & COSTS PAID 08/27/81,JOINTLY AND SEVERALLY.FC#8035







CENSURE


Docket/Case Number: AWC 19



Allegations: ALLEGED VIOLATIONS OF REGULATION T; FAILURE TO REPORTSECURITIES TRADING VOLUME TO NASDAQ; AND FAILURE TO INCREASETHE BOND COVERAGE TO THE REQUIRED AMOUNT



Resolution:


Sanction Details: THE NASD IMPOSED A $1,000 FINE JOINTLY AND SEVERALLY UPON THEFIRM AND SAMUEL WILSON AND CENSURED EACH OF THEM.

Sanctions Ordered: CensureMonetary/Fine







Sanction Details: THE NASD IMPOSED A $1,000 FINE JOINTLY AND SEVERALLY UPON THEFIRM AND SAMUEL WILSON AND CENSURED EACH OF THEM.

Firm Statement THE NASD IMPOSED A $1,000 FINE JOINTLY AND SEVERALLY UPON THEFIRM AND SAMUEL WILSON AND CENSURED EACH OF THEM. THE FIRMAND SAMUEL WILSON CONSENTED TO THE IMPOSITION OF THE SANCTIONPURSUANT TO A LETTER OF ADMISSION,WAIVER & CONSENT WITHOUTADMITTING OR DENYING THE ALLEGATIONS CONTAINED THEREIN.

Disclosure 47 of 53

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Initiated By: IOWA




Docket/Case Number: C-85-01-149




Allegations:



Resolution:


Sanction Details:

Regulator Statement NOTICE OF HEARING; BEFORE THE SUPERINTENDENT OF SECURITIES OFTHE STATE OF IOWA. ON 12/3/85 THE IOWA SECURITIES DIVISIONISSUED A NOTICE OF HEARING TO DETERMINE WHETHER OR NOT GOODCAUSE EXISTED FOR THE IOWA SUPERINTENDENT OF SECURITIES TODENYTHE APPLICATION OF WILSON-DAVIS TO BECOME REGISTERED AS ABROKER-DEALER IN IOWA AND/OR TO ISSUE A CEASE AND DESISTAGAINST WILSON-DAVIS, SAMUEL H. WILSON, AND LYLE W. DAVISAGAINST FURTHER VIOLATIONS OF THE BROKER-DEALER, AGENT, ANDSECURITIES REGISTRATION PROVISIONS OF THE IOWA UNIFORMSECURITIES ACT. THE MATTER IS CURRENTLY PENDING A HEARING INTHE STATE OF IOWA.

*** 3/14/89-FORM U6 (8074-07389) DISCLOSES: ORDER AND COSENT TOORDER, WHERE RESPONDENTS WILSON-DAVIS & CO., INC., SAMUEL H.WILSON AND LYLE W. DAVIS, DO NOT ADMIT OR DENY ALLEGATIONS.ALLEGATIONS WERE 13 UNREGISTERED AGENTS OF AN UNREGISTEREDBROKER-DEALER ENGAGED IN AT LEAST 65 TRANSACTIONS IN 28UNREGISTERED SECURITIES ON BEHALF OF 17 IOWANS IN VIOLATION OFTHE IOWA UNIFORM SECURITIES ACT. SETTLEMENT ORDERED THEPAYMENTOF A $3,000 CIVIL PENALTY, GRANTING RESPONDENT A BD LICENSE,SUSPENDING THE BD LICENSE FOR A PERIOD OF THREE MONTHSBEGINNING EFFECTIVE DATE OF BD REGISTRATION. WILSON AND DAVISWERE CENSURED AS PERSONS DIRECTLY OR INDIRECTLY CONTROLLINGTHEBROKER-DEALER. DOCKET/CASE NO. C-85-01-149, DATED MARCH 16,1986.

Sanctions Ordered: Suspension

Consent






NOTICE OF HEARING; BEFORE THE SUPERINTENDENT OF SECURITIES OFTHE STATE OF IOWA. ON 12/3/85 THE IOWA SECURITIES DIVISIONISSUED A NOTICE OF HEARING TO DETERMINE WHETHER OR NOT GOODCAUSE EXISTED FOR THE IOWA SUPERINTENDENT OF SECURITIES TODENYTHE APPLICATION OF WILSON-DAVIS TO BECOME REGISTERED AS ABROKER-DEALER IN IOWA AND/OR TO ISSUE A CEASE AND DESISTAGAINST WILSON-DAVIS, SAMUEL H. WILSON, AND LYLE W. DAVISAGAINST FURTHER VIOLATIONS OF THE BROKER-DEALER, AGENT, ANDSECURITIES REGISTRATION PROVISIONS OF THE IOWA UNIFORMSECURITIES ACT. THE MATTER IS CURRENTLY PENDING A HEARING INTHE STATE OF IOWA.

*** 3/14/89-FORM U6 (8074-07389) DISCLOSES: ORDER AND COSENT TOORDER, WHERE RESPONDENTS WILSON-DAVIS & CO., INC., SAMUEL H.WILSON AND LYLE W. DAVIS, DO NOT ADMIT OR DENY ALLEGATIONS.ALLEGATIONS WERE 13 UNREGISTERED AGENTS OF AN UNREGISTEREDBROKER-DEALER ENGAGED IN AT LEAST 65 TRANSACTIONS IN 28UNREGISTERED SECURITIES ON BEHALF OF 17 IOWANS IN VIOLATION OFTHE IOWA UNIFORM SECURITIES ACT. SETTLEMENT ORDERED THEPAYMENTOF A $3,000 CIVIL PENALTY, GRANTING RESPONDENT A BD LICENSE,SUSPENDING THE BD LICENSE FOR A PERIOD OF THREE MONTHSBEGINNING EFFECTIVE DATE OF BD REGISTRATION. WILSON AND DAVISWERE CENSURED AS PERSONS DIRECTLY OR INDIRECTLY CONTROLLINGTHEBROKER-DEALER. DOCKET/CASE NO. C-85-01-149, DATED MARCH 16,1986.


Initiated By: SUPERINTENDENT OF SECURITIES OF THE STATE OF IOWA


Suspension


CIVIL AND ADMINISTRATIVE PENALTIES


Docket/Case Number: C-85-01-149



Allegations: ALLEGED VIOLATIONS OF THE BROKER-DEALER, AGENT AND SECURITIESREGISTRATION PROVISIONS OF THE IOWA UNIFORM SECURITIES ACT.



Resolution:


Sanctions Ordered: Monetary/Fine $3,000.00Suspension

Consent







Sanction Details: AN ORDER WAS ENTERED WHICH PROVIDED THE THE FIRM PAY A CIVILPENALTY OF $3000; FILING OF THOSE DOCUMENTS REQUIRED OF ABROKER-DEALER; SAID LICENSE BE SUSPENDED FOR A PERIOD OFTHREE MONTHS (UNTIL 06/06/1986).

Firm Statement AN ORDER WAS ENTERED WHICH PROVIDED THE THE FIRM PAY A CIVILPENALTY OF $3000; BE ISSUED AN IOWA SECURITIES BROKER-DEALERLICENSE UPON EXECUTION OF THE ORDER, PAYMENT OF THE $3,000 CIVILPENALTY, AND THE FILING OF THOSE DOCUMENTS REQUIRED OF ABROKER-DEALER; SAID LICENSE BE SUSPENDED FOR A PERIOD OFTHREE MONTHS (UNTIL 06/06/1986). IT WAS FURTHER ORDERED THATSAMUEL H. WILSON AND LYLE W. DAVIS BE CENSURED. THE FIRM,SAMUEL WILSON AND LYLE DAVIS CONSENTED TO THE ENTRY OF THEORDER WITHOUT ADMITTING OR DENYING THE ALLEGATIONS CONTAINEDTHEREIN.

Disclosure 48 of 53

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Initiated By: MARYLAND




Docket/Case Number: Unknown




Allegations:



Resolution:


Sanction Details:

Sanctions Ordered: Bar

Consent






Sanction Details:

Regulator Statement IN THE MATTER OF WILSON DAVIS & COMPANY, INC.; ADMINISTRATIVEPROCEEDING; BEFORE THE SECURITIES COMMISSIONER,STATE OFMARYLAND. ON 8/26/85 THE MARYLAND DIVISION OF SECURITIESENTERED A CONSENT ORDER PROHIBITING WILSON-DAVIS AND ITSOFFICERS, DIRECTORS, AGENTS, AND EMPLOYEES FROM OFFERING ORSELLING SECURITIES IN MARYLAND IN VIOLATION OF THE MARYLANDSECURITIES ACT OR RULES PROMULGATED THEREUNDER. THIS ORDERWASBASED UPON ALLEGED VIOLATIONS OF THE BROKER-DEALER AND AGENTREGISTRATION PROVISIONS OF THE MARYLAND SECURITIES ACT.


Initiated By: SECURITIES COMMISSIONER, STATE OF MARYLAND







Allegations: ALLEGED VIOLATIONS OF THE BROKER-DEALER AND AGENTREGISTRATION PROVISIONS OF THE MARYLAND SECURITIES ACT



Resolution:


Sanction Details: THE FIRM NOR ANY OF ITS OFFICERS, DIRECTORS, AGENTS OREMPLYEES SHALL OFFER OR SELL SECURITIES IN THE STATE OFMARYLAND IN VIOLATION OF ANY SECTION OF THE MARYLANDSECURITIES ACT (THE "ACT")OR THE RULES PROMULGATEDTHEREUNDER. NONE OF THE FOREGOING PERSONS SHALL OFFER ORSELL SECURITIES UNLESS REGISTERED AS BROKER/DEALERS ORAGENTS AS REQUIRED BY THE ACT, OR UNLESS EVIDENCE IS PROVIDEDTHAT ESTABLISHES AN EXEMPTION THEREFROM. THE FIRM AGREES TOWAIVE RELIANCE UPON SECTION 11-412(C) OF THE ACT FOR TWELVEMONTHS (UNTIL 08/26/1986)

Sanctions Ordered:

Consent






THE FIRM NOR ANY OF ITS OFFICERS, DIRECTORS, AGENTS OREMPLYEES SHALL OFFER OR SELL SECURITIES IN THE STATE OFMARYLAND IN VIOLATION OF ANY SECTION OF THE MARYLANDSECURITIES ACT (THE "ACT")OR THE RULES PROMULGATEDTHEREUNDER. NONE OF THE FOREGOING PERSONS SHALL OFFER ORSELL SECURITIES UNLESS REGISTERED AS BROKER/DEALERS ORAGENTS AS REQUIRED BY THE ACT, OR UNLESS EVIDENCE IS PROVIDEDTHAT ESTABLISHES AN EXEMPTION THEREFROM. THE FIRM AGREES TOWAIVE RELIANCE UPON SECTION 11-412(C) OF THE ACT FOR TWELVEMONTHS (UNTIL 08/26/1986)

Firm Statement A CONSENT ORDER WAS ENTERED PROHIBITING THE FIRM AND ITSOFFICERS, DIRECTORS, AGENTS AND EMPLOYEES FROM OFFERING ORSELLING IN MARYLAND IN VIOLATION OF THE MARYLAND SECURITIES ACTAND THE RULES PROMULGATED THEREUNDER

Disclosure 49 of 53

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Initiated By: ARIZONA




Docket/Case Number: S-2233-1




Allegations:



Resolution:


Sanction Details:

Regulator Statement IN THE MATTER OF THE OFFERING OF SECURITIES BY WILSON DAVIS &CO., DOCKET NO. S-2233-I, DECISION NO. 54639; BEFORE THEARIZONA CORPORATION COMMISSION. ON 8/7/85 THE ARIZONASECURITIESDIVISION ENTERED AN ORDER TO CEASE AND DESIST FROM OFFERINGTOSELL OR SELLING SECURITIES IN VIOLATION OF THE BROKER-DEALERAND SECURITIES REGISTRATION PROVISIONS OF THE SECURITIES ACT OFARIZONA. WILSON-DAVIS CONSENTED TO THE ENTRY OF THE ORDERWITHOUT ADMITTING OR DENYING THE ALLEGATIONS SET FORTHTHEREIN.


Consent






IN THE MATTER OF THE OFFERING OF SECURITIES BY WILSON DAVIS &CO., DOCKET NO. S-2233-I, DECISION NO. 54639; BEFORE THEARIZONA CORPORATION COMMISSION. ON 8/7/85 THE ARIZONASECURITIESDIVISION ENTERED AN ORDER TO CEASE AND DESIST FROM OFFERINGTOSELL OR SELLING SECURITIES IN VIOLATION OF THE BROKER-DEALERAND SECURITIES REGISTRATION PROVISIONS OF THE SECURITIES ACT OFARIZONA. WILSON-DAVIS CONSENTED TO THE ENTRY OF THE ORDERWITHOUT ADMITTING OR DENYING THE ALLEGATIONS SET FORTHTHEREIN.


Initiated By: ARIZONA CORPORATION COMMISSION


Cease and Desist



Docket/Case Number: S-2233-I



Allegations: ALLEGED VIOLATIONS OF THE BROKER-DEALER AND SECURITIESREGISTRATION PROVISIONS OF THE ARIZONA SECURITIES ACT



Resolution:


Sanction Details: AN ORDER TO CEASE AND DESIST AND CONSENT TO SAME WHICHPROVIDED THE THE FIRM CEASE AND DESIST FROM OFFERING TO SELLOR SELLING SECURITIES IN VIOLATION OF THE BROKER-DEALER ANDSECURITIES PROVISIONS OF THE SECURITIES ACT OF ARIZONA. THEFIRM CONSENTED TO THE ORDER WITHOUT ADMITTING OR DENYING THEALLEGATIONS CONTAINED THEREIN


Consent

Disclosure 50 of 53

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Allegations:















Resolution:


Sanction Details:

Regulator Statement SUMMARY COMPLAINT NO N-VS-853 - BEFORE THE TRADING COMPANY OFTHE NASD, INC. ON MARCH 19, 1984 THE NASD IMPOSED A FINE OF $250ON WILSON-DAVIS. THE FINE WAS BASED UPON THE FAILURE ON THEPARTOF WILSON-DAVIS TO REPORT SECURITIES TRADING VOLUME TONASDAQ.


Decision


Initiated By: TRADING COMMITTEE OF THE NASD

















Resolution:


Sanction Details: THE NASD IMPOSED A FINE OF $250. THE FIRM CONSENTED TO THEIMPOSITION OF THE FINE AND PAID $250 ON 3/30/1984



Disclosure 51 of 53

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Initiated By: PENNSYLVANIA






Principal Product Type: Options


Allegations: SELLING AN UNREGISTERED SECURITY AND TRANSACTING BUSINESS INPA WHILE ITS REGISTRATION APPLICATION WAS PENDING AND EFFECTINGSALES THROUGH UNREGISTERD AGENTS.



Resolution:

Other Sanctions Ordered: BACK REGISTRATION FEES AND COSTS OF INVESTIGATION IMPOSED.

Sanction Details: FINDINGS OF FACT,CONCLUSIONS OF LAW AND ORDER ISSUED -COMPANY REGISTERED AS A BD AND SIMULTANEOUSLY SUSPENDED FOR45 BUSINESS DAYS FOR SELLING AN UNREGISTERED SECURITY ANDTRANSACTING BUSINESS IN PA WHILE ITS REGISTRATION APPLICATIONWAS PENDING AND EFFECTING SALES THROUGHUNREGISTERD AGENTS. IN ADDITION, BACK REGISTRATION FEES ANDCOSTS OF INVESTIGATION IMPOSED.

Sanctions Ordered: Suspension

Decision





www.finra.org/brokercheck User GuidanceFINDINGS OF FACT,CONCLUSIONS OF LAW AND ORDER ISSUED -COMPANY REGISTERED AS A BD AND SIMULTANEOUSLY SUSPENDED FOR45 BUSINESS DAYS FOR SELLING AN UNREGISTERED SECURITY ANDTRANSACTING BUSINESS IN PA WHILE ITS REGISTRATION APPLICATIONWAS PENDING AND EFFECTING SALES THROUGHUNREGISTERD AGENTS. IN ADDITION, BACK REGISTRATION FEES ANDCOSTS OF INVESTIGATION IMPOSED.


Initiated By: PENNSYLVANIA SECURITIES COMMISSION


Suspension






Allegations: ALLEGED VIOLATIONS OF THE BROKER-DEALER, AGENT AND SECURITIESREGISTRATION PROVISIONS FO THE PENNSYLVANIA SECURITIES ACT OF1972



Resolution:

Other Sanctions Ordered: REGISTRATION OF BROKER DEALER LICENSE SUSPENDED FOR 45 DAYS

Sanction Details: THE REGISTRATION OF THE FIRM WAS DECLARED EFFECTIVE, HOWEVER,SUCH REGISTRATION WAS SUSPENDED FOR 45 DAYS (UNTIL 12/20/1985)

Firm Statement AN ORDER WAS ENTERED WHICH PROVIDED THAT THE REGISTATION OFTHE FIRM WAS DECLARED EFFECTIVE; SUCH REGISTRATION WASSUSPENDED FOR 45 DAYS (UNTIL 12/20/1985); IT WAS ORDERED TOCOMPLY WITH ALL PROVISIONS OF THE PENNSYLVANIA SECURITIES ACTOF 1972 IN THE FUTURE; AND THE FIRM WAS REQUIRED TO REIMBURSETHE COSTS OF THE INVESTIGATION AS WELL AS PAY PRIOR YEARSBROKER-DEALER AND AGENT REGISTRATION FEES IN THE AMOUNT OF$1,025. THE FIRM CONSENTED TO THE ENTRY OF THE ORDER WITHOUTADMITTING OR DENYING THE ALLEGATIONS CONTAINED THEREIN.


Order

Disclosure 52 of 53

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Disclosure 52 of 53


Initiated By: IDAHO






Principal Product Type: Options


Allegations: NA



Resolution:

Other Sanctions Ordered: 1 YEAR PROBATION AND INITIATION OF SPECIAL PROCEDURES.

Sanction Details: BY STIPULATION OF PARTY:(1) $1,000 FINE, (2) 30 DAY SUSPENSION, (3) 1YEAR PROBATION AND (4) INITIATION OF SPECIAL PROCEDURES.


Stipulation and Consent


Initiated By: DIRECTOR DEPARTMENT OF FINANCE, STATE OF IDAHO


Suspension





Allegations: ALLEGED VIOLATIONS OF TEH BROKER-DEALER, AGENT AND SECURITIESREGISTRATION PROVISIONS OF THE IDAHO SECURITIES ACT








Suspension



Resolution:


Sanction Details: THE PENDING APPLICATION FOR BROKER-DEALER REGISTRATION WASAPPROVED, HOWEVER, THE REGISTRATION LICENSE IS SUSPENED FOR APERIOD OF 30 DAYS.

Firm Statement AN AGREEMENT AND ORDER WAS ENTERED WHICH PROVIDED FOR,AMONG OTHER THINGS, THE APPROVAL OF THE PENDING APPLICATIONFOR BROKER-DEALER REGISTRATION; THE SUSPENSION OF SUCHREGISTRATION LICENSE FOR A PERIOD OF 30 DAYS; AND THE IMPOSITIONOF A $1,000 FINE. THE FIRM CONSENTED TO THE ENTRY OF THE ORDERWITHOUT ADMITTING OR DENYING THE ALLECTIONS CONTAINEDTHEREIN.


Order

Disclosure 53 of 53

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Initiated By: SECURITIES AND EXCHANGE COMMISSION




Docket/Case Number:



Allegations:



Resolution: Decision & Order of Offer of Settlement








Sanction Details:

Regulator Statement NEWS DIGEST 77-199, DATED 07/20/77RELEASE #34-13742PUBLIC ADMINISTRATIVE PROCEEDINGS ORDERED.PURSUANT TO AN OFFER OF SETTLEMENT,CENSURED.



Initiated By: SECURITIES & EXCHANGE COMMISSION


Censure



Docket/Case Number: ADMIN PRO FILE NO 3-5254



Allegations: FAILURE TO SUPERVISE



Resolution:


Sanction Details: THE FIRM HAS UNDERTAKEN TO ADOPT AND IMPLEMENT VARIOUSSUPERVISORY PROCEEDURES WITH A VIEW TOWARD PREVENTINGVIOLATIVE CONDUCT BY PERSONS SUBJECT TO THE FIRMS'SUPERVISION.

Firm Statement THIS ACTION WAS BASED UPON THE FAILURE TO SUPERVISE ANOTHERPERSON AFFILIATED WITH THE FIRM WHO ENGAGED IN VIOLATIONS OFPROVISIONS OF THE SECURITIES EXCHANGE ACT OF 1934 AND THEINVESTMENT ADVISORS ACT OF 1940. AN ORDER WAS ENTEREDINSTITUTING PROCEEDINGS AND IMPOSING REMEDIAL SANCTIONS INWHICH THE FIRM, MR. WILSON, AND MR. DAVIS WERE EACH CENSURED.ALL CONSENTED TO THE ENTRY OF THE ORDER IMPOSING THESANCTIONS WITHOUT ADMITTING OR DENYING THE ALLEGATIONS


Order






THIS ACTION WAS BASED UPON THE FAILURE TO SUPERVISE ANOTHERPERSON AFFILIATED WITH THE FIRM WHO ENGAGED IN VIOLATIONS OFPROVISIONS OF THE SECURITIES EXCHANGE ACT OF 1934 AND THEINVESTMENT ADVISORS ACT OF 1940. AN ORDER WAS ENTEREDINSTITUTING PROCEEDINGS AND IMPOSING REMEDIAL SANCTIONS INWHICH THE FIRM, MR. WILSON, AND MR. DAVIS WERE EACH CENSURED.ALL CONSENTED TO THE ENTRY OF THE ORDER IMPOSING THESANCTIONS WITHOUT ADMITTING OR DENYING THE ALLEGATIONS






Regulatory - On Appeal

This type of disclosure event involves (1) a formal proceeding initiated by a regulatory authority (e.g., a state securitiesagency, self-regulatory organization, federal regulator such as the Securities and Exchange Commission, foreign financialregulatory body) for a violation of investment-related rules or regulations that is currently on appeal; or (2) a revocation orsuspension of the authority of a brokerage firm or its control affiliate to act as an attorney, accountant or federal contractorthat is currently on appeal.

Disclosure 1 of 1


Allegations: THE FIRM WAS NAMED A RESPONDENT IN A FINRA COMPLAINT ALLEGINGTHAT IT DISREGARDED MANY CRITICAL SUPERVISORY OBLIGATIONS ANDTHIS FAILURE TO SUPERVISE RESULTED IN THE FIRM COMMITTINGWILLFUL VIOLATIONS OF FEDERAL SECURITIES REGULATIONS, FAILING TOACT IN ACCORDANCE WITH AN ORDER OF A FINRA DISCIPLINARY HEARINGPANEL AND HAVING A PATENTLY DEFICIENT SYSTEM OF SUPERVISION ASIT RELATES TO KEY ASPECTS OF ITS BUSINESS. THE COMPLAINT ALLEGESTHAT THE FIRM, ACTING THROUGH ITS FORMER REGISTEREDREPRESENTATIVE, FAILED TO FIND LOCATES FOR AT LEAST 122 SHORTTRANSACTIONS EFFECTED IN FOUR LOW-PRICED STOCKS. THE FIRMIMPROPERLY RELIED ON THE BONA-FIDE MARKET MAKER EXEMPTIONPURSUANT TO RULE 203(B)(2) OF REGULATION SHO UNDER THESECURITIES EXCHANGE ACT OF 1934. THE FIRM'S CLAIM THAT IT ACTEDAS A MARKET MAKER IN THE RELEVANT STOCKS WAS FALSE. AS A RESULT,THE FIRM WILLFULLY VIOLATED RULE 203(B)(1) OF REG SHO OF THEEXCHANGE ACT OF 1934 AND FINRA RULE 2010. THE COMPLAINT ALSOALLEGES THAT THE FIRM FAILED TO ESTABLISH AND MAINTAINREASONABLE SUPERVISORY SYSTEMS AND WRITTEN SUPERVISORYPROCEDURES (WSPS) IN CONNECTION WITH THE USE OF THE MARKETMAKER EXEMPTION, THE LOCATE REQUIREMENTS AND OVERALLCOMPLIANCE WITH REG SHO. THE FIRM FAILED TO REASONABLYSUPERVISE THE FORMER REPRESENTATIVE'S TRADING ACTIVITIES ANDFAILED TO ENSURE HIS TRADING ACTIVITIES COMPLIED WITH THE REGSHO. THE FIRM'S INADEQUATE SUPERVISORY SYSTEM, PROCEDURESAND SUPERVISION RESULTED IN NUMEROUS VIOLATIONS OF REG SHO.THE FIRM FAILED TO ENSURE APPROPRIATE SUPERVISORS WEREASSIGNED TO SUPERVISE EACH REGISTERED REPRESENTATIVE ANDREGISTERED PRINCIPAL. AS A RESULT, THE FIRM FAILED TO IMPLEMENT AREASONABLE SUPERVISORY SYSTEM TO SUPERVISE THE REGISTEREDREPRESENTATIVES AND PRINCIPALS AT THE FIRM. THE FIRM FAILED TOENFORCE ITS PROCEDURES REGARDING HEIGHTENED SUPERVISION.THE FIRM FURTHER ACTED IN KNOWING VIOLATION OF THE FINRAHEARING PANEL ORDER WHEN PERMITTING AN EQUITY TRADER TOREMAIN EMPLOYED AND PERFORM HIS NORMAL DUTIES BETWEEN THEISSUANCE OF THE HEARING PANEL DECISION AND ALSO WITHOUTHEIGHTENED SUPERVISION. EVEN AFTER A HEIGHTENED SUPERVISIONPLAN WAS ESTABLISHED FOR THE EQUITY TRADER, THE FIRM FAILED TOENSURE THAT THE EQUITY TRADER WAS, IN FACT, SUBJECT TOHEIGHTENED SUPERVISION AS REQUIRED BY THE HEARING PANEL'SORDER. THE FIRM FAILED TO REASONABLY SUPERVISE INSTANTMESSAGE COMMUNICATIONS FOR ITS REGISTERED REPRESENTATIVES.THE COMPLAINT FURTHER ALLEGES THAT THE FIRM FAILED TOESTABLISH AND IMPLEMENT ADEQUATE AML POLICIES AND PROCEDURESTO DETECT, INVESTIGATE AND REPORT, WHERE APPROPRIATE,SUSPICIOUS TRADING ACTIVITY. THE FIRM FAILED TO DETECT ANDINVESTIGATE TRADING ACTIVITY IN A LITTLE-KNOWN, HIGHLY ILLIQUIDPENNY STOCK DESPITE THE PRESENCE OF NUMEROUS RED FLAGSINDICATIVE OF POTENTIALLY SUSPICIOUS ACTIVITY AS A RESULT OF THEFAILURE TO ESTABLISH AND IMPLEMENT ADEQUATE AML POLICIES ANDPROCEDURES. IT NEVER TOOK ANY INVESTIGATIVE STEPS TO ASSESSWHETHER FILING A SAR WITH REGARD TO THE ACTIVITY IN THE LITTLE-KNOWN PENNY STOCK WAS WARRANTED AS A RESULT OF THE FAILURETO ESTABLISH AND IMPLEMENT ADEQUATE AML POLICIES ANDPROCEDURES. THE FIRM FAILED TO CONDUCT ADEQUATE AML TRAINING.IN ADDITION, THE COMPLAINT ALLEGES THAT DESPITE THE FIRM NOTACTING AS A BONA-FIDE MARKET MAKER, ITS FORMER REPRESENTATIVEPLACED THE ORDERS TO SELL SHARES OF THE FOUR STOCKS SHORTAND NEITHER HE NOR ANYONE ELSE AT THE FIRM MADE ANY EFFORT TOBORROW, ARRANGE TO BORROW, OR LOCATE THE SECURITIES. THE FIRMLACKED AN ADEQUATE SUPERVISORY SYSTEM, LACKED ADEQUATESUPERVISORY PROCEDURES AND LACKED ADEQUATE SUPERVISIONCONCERNING MARKET MAKING AND SHORT SALES. THE FIRM'S FORMERREPRESENTATIVE WAS CAUGHT WHEN THE MARKET MOVED AGAINSTHIM, LEAVING THE FIRM WITH A NAKED SHORT POSITION OF OVER ONEMILLION SHARES. THE FIRM WAS ONLY ABLE TO COVER THE SHORTPOSITION IN THE PARTICULAR STOCK BY OBTAINING SUBSTANTIALFINANCIAL ASSISTANCE IN THE FORM OF A $4 MILLION LOAN.

Current Status: On Appeal


ON MARCH 1, 2018, RESPONDENT FILED WITH THE OFFICE OF HEARINGOFFICERS AN APPEAL OF THE EXTENDED HEARING PANEL DECISION. ONDECEMBER 30, 2019, THE FIRM APPEALED THE NAC DECISION TO THESEC.






Initiated By: FINRA





THE FIRM WAS NAMED A RESPONDENT IN A FINRA COMPLAINT ALLEGINGTHAT IT DISREGARDED MANY CRITICAL SUPERVISORY OBLIGATIONS ANDTHIS FAILURE TO SUPERVISE RESULTED IN THE FIRM COMMITTINGWILLFUL VIOLATIONS OF FEDERAL SECURITIES REGULATIONS, FAILING TOACT IN ACCORDANCE WITH AN ORDER OF A FINRA DISCIPLINARY HEARINGPANEL AND HAVING A PATENTLY DEFICIENT SYSTEM OF SUPERVISION ASIT RELATES TO KEY ASPECTS OF ITS BUSINESS. THE COMPLAINT ALLEGESTHAT THE FIRM, ACTING THROUGH ITS FORMER REGISTEREDREPRESENTATIVE, FAILED TO FIND LOCATES FOR AT LEAST 122 SHORTTRANSACTIONS EFFECTED IN FOUR LOW-PRICED STOCKS. THE FIRMIMPROPERLY RELIED ON THE BONA-FIDE MARKET MAKER EXEMPTIONPURSUANT TO RULE 203(B)(2) OF REGULATION SHO UNDER THESECURITIES EXCHANGE ACT OF 1934. THE FIRM'S CLAIM THAT IT ACTEDAS A MARKET MAKER IN THE RELEVANT STOCKS WAS FALSE. AS A RESULT,THE FIRM WILLFULLY VIOLATED RULE 203(B)(1) OF REG SHO OF THEEXCHANGE ACT OF 1934 AND FINRA RULE 2010. THE COMPLAINT ALSOALLEGES THAT THE FIRM FAILED TO ESTABLISH AND MAINTAINREASONABLE SUPERVISORY SYSTEMS AND WRITTEN SUPERVISORYPROCEDURES (WSPS) IN CONNECTION WITH THE USE OF THE MARKETMAKER EXEMPTION, THE LOCATE REQUIREMENTS AND OVERALLCOMPLIANCE WITH REG SHO. THE FIRM FAILED TO REASONABLYSUPERVISE THE FORMER REPRESENTATIVE'S TRADING ACTIVITIES ANDFAILED TO ENSURE HIS TRADING ACTIVITIES COMPLIED WITH THE REGSHO. THE FIRM'S INADEQUATE SUPERVISORY SYSTEM, PROCEDURESAND SUPERVISION RESULTED IN NUMEROUS VIOLATIONS OF REG SHO.THE FIRM FAILED TO ENSURE APPROPRIATE SUPERVISORS WEREASSIGNED TO SUPERVISE EACH REGISTERED REPRESENTATIVE ANDREGISTERED PRINCIPAL. AS A RESULT, THE FIRM FAILED TO IMPLEMENT AREASONABLE SUPERVISORY SYSTEM TO SUPERVISE THE REGISTEREDREPRESENTATIVES AND PRINCIPALS AT THE FIRM. THE FIRM FAILED TOENFORCE ITS PROCEDURES REGARDING HEIGHTENED SUPERVISION.THE FIRM FURTHER ACTED IN KNOWING VIOLATION OF THE FINRAHEARING PANEL ORDER WHEN PERMITTING AN EQUITY TRADER TOREMAIN EMPLOYED AND PERFORM HIS NORMAL DUTIES BETWEEN THEISSUANCE OF THE HEARING PANEL DECISION AND ALSO WITHOUTHEIGHTENED SUPERVISION. EVEN AFTER A HEIGHTENED SUPERVISIONPLAN WAS ESTABLISHED FOR THE EQUITY TRADER, THE FIRM FAILED TOENSURE THAT THE EQUITY TRADER WAS, IN FACT, SUBJECT TOHEIGHTENED SUPERVISION AS REQUIRED BY THE HEARING PANEL'SORDER. THE FIRM FAILED TO REASONABLY SUPERVISE INSTANTMESSAGE COMMUNICATIONS FOR ITS REGISTERED REPRESENTATIVES.THE COMPLAINT FURTHER ALLEGES THAT THE FIRM FAILED TOESTABLISH AND IMPLEMENT ADEQUATE AML POLICIES AND PROCEDURESTO DETECT, INVESTIGATE AND REPORT, WHERE APPROPRIATE,SUSPICIOUS TRADING ACTIVITY. THE FIRM FAILED TO DETECT ANDINVESTIGATE TRADING ACTIVITY IN A LITTLE-KNOWN, HIGHLY ILLIQUIDPENNY STOCK DESPITE THE PRESENCE OF NUMEROUS RED FLAGSINDICATIVE OF POTENTIALLY SUSPICIOUS ACTIVITY AS A RESULT OF THEFAILURE TO ESTABLISH AND IMPLEMENT ADEQUATE AML POLICIES ANDPROCEDURES. IT NEVER TOOK ANY INVESTIGATIVE STEPS TO ASSESSWHETHER FILING A SAR WITH REGARD TO THE ACTIVITY IN THE LITTLE-KNOWN PENNY STOCK WAS WARRANTED AS A RESULT OF THE FAILURETO ESTABLISH AND IMPLEMENT ADEQUATE AML POLICIES ANDPROCEDURES. THE FIRM FAILED TO CONDUCT ADEQUATE AML TRAINING.IN ADDITION, THE COMPLAINT ALLEGES THAT DESPITE THE FIRM NOTACTING AS A BONA-FIDE MARKET MAKER, ITS FORMER REPRESENTATIVEPLACED THE ORDERS TO SELL SHARES OF THE FOUR STOCKS SHORTAND NEITHER HE NOR ANYONE ELSE AT THE FIRM MADE ANY EFFORT TOBORROW, ARRANGE TO BORROW, OR LOCATE THE SECURITIES. THE FIRMLACKED AN ADEQUATE SUPERVISORY SYSTEM, LACKED ADEQUATESUPERVISORY PROCEDURES AND LACKED ADEQUATE SUPERVISIONCONCERNING MARKET MAKING AND SHORT SALES. THE FIRM'S FORMERREPRESENTATIVE WAS CAUGHT WHEN THE MARKET MOVED AGAINSTHIM, LEAVING THE FIRM WITH A NAKED SHORT POSITION OF OVER ONEMILLION SHARES. THE FIRM WAS ONLY ABLE TO COVER THE SHORTPOSITION IN THE PARTICULAR STOCK BY OBTAINING SUBSTANTIALFINANCIAL ASSISTANCE IN THE FORM OF A $4 MILLION LOAN.











Resolution:

Regulator Statement EXTENDED HEARING PANEL DECISION RENDERED FEBRUARY 27, 2018,WHEREIN THE FIRM WAS FINED $1,470,000, AND ORDERED TO PAY $51,624,PLUS INTEREST, IN DISGORGEMENT FOR IMPROPER SHORT SALES. FINRAALSO ORDERED RESPONDENT TO, JOINTLY AND SEVERALLY, PAY$13,443.39 IN COSTS. THE SANCTIONS WERE BASED ON FINDINGS THATTHE FIRM WILLFULLY VIOLATED RULE 203(B)(1) OF REGULATION SHOTHROUGH ITS SHORT-SELLING ACTIVITY. THE FINDINGS STATED THAT THEFIRM MADE AT LEAST 122 SHORT SALES IN CONNECTION WITH ITSFORMER REGISTERED REPRESENTATIVE'S SPECULATIVE TRADINGSTRATEGY IN FOUR LOW-PRICED SECURITIES AND THE FIRM FAILED TOCOMPLY WITH THE BORROW REQUIREMENT IN CONNECTION WITH EACHOF THESE SHORT SALES. THE FIRM'S OVERALL CONDUCT IN EACH OFTHE FOUR SECURITIES WAS THAT OF A SPECULATIVE TRADERENDEAVORING TO PIGGY-BACK THE TRAJECTORY OF POTENTIAL "PUMPAND DUMP" SCHEMES, NOT THAT OF A GENUINE MARKET MAKER. THEFINDINGS ALSO STATED THAT THE FIRM AND ITS PRESIDENT AND CCO,FAILED TO ESTABLISH AND MAINTAIN REASONABLE SUPERVISORYSYSTEMS AND WSPS IN CONNECTION WITH THE FIRM'S USE OF THEMARKET MAKER EXEMPTION TO THE BORROW REQUIREMENT OFREGULATION SHO. THE FIRM LACKED REASONABLE SUPERVISORYSYSTEMS, INCLUDING WSPS. IN ADDITION, THE FIRM AND THE CCO FAILEDTO ADEQUATELY CONSIDER A BROKER FOR HEIGHTENED SUPERVISIONAFTER A COMPLAINT WAS FILED AGAINST THE FIRM, A PRINCIPAL AND THEBROKER, AND DOCUMENT ANY DECISIONS MADE IN THAT REGARD. ALIKE,WHEN A HEIGHTENED SUPERVISION PLAN WAS FINALLY DEVISED, IT WASUNREASONABLE AND INADEQUATE. FURTHER, THE FIRM, ACTINGTHROUGH THE CCO, FAILED TO CLEARLY ASSIGN EACH REGISTEREDPERSON TO AN APPROPRIATELY REGISTERED REPRESENTATIVE AND/ORPRINCIPAL RESPONSIBLE FOR SUPERVISING THAT INDIVIDUAL'SACTIVITIES. THE FIRM AND THE CCO ALSO FAILED TO REASONABLYSUPERVISE INSTANT MESSAGE COMMUNICATIONS FOR THE FIRM'SREGISTERED REPRESENTATIVES. THE FINDINGS ALSO INCLUDED THATTHE FIRM FAILED TO ESTABLISH AND IMPLEMENT REASONABLE AMLPOLICIES AND PROCEDURES TO DETECT, INVESTIGATE, AND REPORT,WHERE APPROPRIATE, SUSPICIOUS TRADING ACTIVITY. THE FIRM ANDTHE CCO FAILED TO ESTABLISH OR MAINTAIN AML POLICIES ANDPROCEDURES TAILORED TO THE RISKS POSED BY ITS PENNY STOCKBUSINESS. ALSO, THE FIRM'S CCO FAILED TO PROVIDE ADEQUATE AMLTRAINING TO ENABLE EMPLOYEES TO DETECT POTENTIALLY SUSPICIOUSTRADING ACTIVITY, INCLUDING THE RISKS AND RED FLAGS ASSOCIATEDWITH PENNY STOCK ACTIVITY. EMPLOYEES WERE NOT TRAINED ONSPECIFIC STEPS TO BE TAKEN IN ORDER TO MONITOR FOR OR DETECTANY POTENTIALLY SUSPICIOUS TRADING ACTIVITY.ON MARCH 1, 2018, RESPONDENT FILED WITH THE OFFICE OF HEARINGOFFICERS AN APPEAL OF THE EXTENDED HEARING PANEL DECISIONDATED FEBRUARY 27, 2018. THE SANCTIONS ARE NOT IN EFFECTPENDING REVIEW.

NAC DECISION RENDERED DECEMBER 19, 2019. THE NAC AFFIRMED THEFINDINGS AND MODIFIED THE SANCTIONS IMPOSED BY THE OHO. THESANCTIONS WERE BASED ON FINDINGS INCLUDING THAT THE FIRMENGAGED IN SHORT SELLING IN VIOLATION OF RULE 203(B)(1) OFREGULATION SHO OF THE SECURITIES EXCHANGE ACT OF 1934 ("REGSHO") BECAUSE THE FIRM FAILED TO FIND LOCATES FOR 122 SHORTTRANSACTIONS EFFECTED IN FOUR LOW-PRICED STOCKS.

ON DECEMBER 30, 2019, THE FIRM APPEALED THE DECISION TO THE SEC.THE SANCTIONS ARE NOT IN EFFECT PENDING THE REVIEW.


No

Other






EXTENDED HEARING PANEL DECISION RENDERED FEBRUARY 27, 2018,WHEREIN THE FIRM WAS FINED $1,470,000, AND ORDERED TO PAY $51,624,PLUS INTEREST, IN DISGORGEMENT FOR IMPROPER SHORT SALES. FINRAALSO ORDERED RESPONDENT TO, JOINTLY AND SEVERALLY, PAY$13,443.39 IN COSTS. THE SANCTIONS WERE BASED ON FINDINGS THATTHE FIRM WILLFULLY VIOLATED RULE 203(B)(1) OF REGULATION SHOTHROUGH ITS SHORT-SELLING ACTIVITY. THE FINDINGS STATED THAT THEFIRM MADE AT LEAST 122 SHORT SALES IN CONNECTION WITH ITSFORMER REGISTERED REPRESENTATIVE'S SPECULATIVE TRADINGSTRATEGY IN FOUR LOW-PRICED SECURITIES AND THE FIRM FAILED TOCOMPLY WITH THE BORROW REQUIREMENT IN CONNECTION WITH EACHOF THESE SHORT SALES. THE FIRM'S OVERALL CONDUCT IN EACH OFTHE FOUR SECURITIES WAS THAT OF A SPECULATIVE TRADERENDEAVORING TO PIGGY-BACK THE TRAJECTORY OF POTENTIAL "PUMPAND DUMP" SCHEMES, NOT THAT OF A GENUINE MARKET MAKER. THEFINDINGS ALSO STATED THAT THE FIRM AND ITS PRESIDENT AND CCO,FAILED TO ESTABLISH AND MAINTAIN REASONABLE SUPERVISORYSYSTEMS AND WSPS IN CONNECTION WITH THE FIRM'S USE OF THEMARKET MAKER EXEMPTION TO THE BORROW REQUIREMENT OFREGULATION SHO. THE FIRM LACKED REASONABLE SUPERVISORYSYSTEMS, INCLUDING WSPS. IN ADDITION, THE FIRM AND THE CCO FAILEDTO ADEQUATELY CONSIDER A BROKER FOR HEIGHTENED SUPERVISIONAFTER A COMPLAINT WAS FILED AGAINST THE FIRM, A PRINCIPAL AND THEBROKER, AND DOCUMENT ANY DECISIONS MADE IN THAT REGARD. ALIKE,WHEN A HEIGHTENED SUPERVISION PLAN WAS FINALLY DEVISED, IT WASUNREASONABLE AND INADEQUATE. FURTHER, THE FIRM, ACTINGTHROUGH THE CCO, FAILED TO CLEARLY ASSIGN EACH REGISTEREDPERSON TO AN APPROPRIATELY REGISTERED REPRESENTATIVE AND/ORPRINCIPAL RESPONSIBLE FOR SUPERVISING THAT INDIVIDUAL'SACTIVITIES. THE FIRM AND THE CCO ALSO FAILED TO REASONABLYSUPERVISE INSTANT MESSAGE COMMUNICATIONS FOR THE FIRM'SREGISTERED REPRESENTATIVES. THE FINDINGS ALSO INCLUDED THATTHE FIRM FAILED TO ESTABLISH AND IMPLEMENT REASONABLE AMLPOLICIES AND PROCEDURES TO DETECT, INVESTIGATE, AND REPORT,WHERE APPROPRIATE, SUSPICIOUS TRADING ACTIVITY. THE FIRM ANDTHE CCO FAILED TO ESTABLISH OR MAINTAIN AML POLICIES ANDPROCEDURES TAILORED TO THE RISKS POSED BY ITS PENNY STOCKBUSINESS. ALSO, THE FIRM'S CCO FAILED TO PROVIDE ADEQUATE AMLTRAINING TO ENABLE EMPLOYEES TO DETECT POTENTIALLY SUSPICIOUSTRADING ACTIVITY, INCLUDING THE RISKS AND RED FLAGS ASSOCIATEDWITH PENNY STOCK ACTIVITY. EMPLOYEES WERE NOT TRAINED ONSPECIFIC STEPS TO BE TAKEN IN ORDER TO MONITOR FOR OR DETECTANY POTENTIALLY SUSPICIOUS TRADING ACTIVITY.ON MARCH 1, 2018, RESPONDENT FILED WITH THE OFFICE OF HEARINGOFFICERS AN APPEAL OF THE EXTENDED HEARING PANEL DECISIONDATED FEBRUARY 27, 2018. THE SANCTIONS ARE NOT IN EFFECTPENDING REVIEW.

NAC DECISION RENDERED DECEMBER 19, 2019. THE NAC AFFIRMED THEFINDINGS AND MODIFIED THE SANCTIONS IMPOSED BY THE OHO. THESANCTIONS WERE BASED ON FINDINGS INCLUDING THAT THE FIRMENGAGED IN SHORT SELLING IN VIOLATION OF RULE 203(B)(1) OFREGULATION SHO OF THE SECURITIES EXCHANGE ACT OF 1934 ("REGSHO") BECAUSE THE FIRM FAILED TO FIND LOCATES FOR 122 SHORTTRANSACTIONS EFFECTED IN FOUR LOW-PRICED STOCKS.

ON DECEMBER 30, 2019, THE FIRM APPEALED THE DECISION TO THE SEC.THE SANCTIONS ARE NOT IN EFFECT PENDING THE REVIEW.


Initiated By: FINRA



Allegations: FINRA ASSERTS THAT THE FIRM AND MESSRS. BARKLEY AND SNOWFAILED TO PROPERLY SUPERVISE CERTAIN ACTIVITIES AT THE FIRM ANDIMPROPERLY RELIED UPON THE BONA FIDE MARKET MAKER EXCEPTIONTO REG. SHO.

Current Status: On Appeal


APPLICATION FOR REVIEW FILED WITH SEC ON 12/31/19.










THE NAC ISSUED THE FOLLOWING SANCTIONS TO THE FIRM: FORALLEGED SHORT SALES IN VIOLATION OF REG SHO, THE FIRM WAS FINED$350,000 AND ORDERED TO DISGORGE $51,624 (PLUS PRE-JUDGMENTINTEREST). FOR ITS ALLEGED FAILURES TO SUPERVISE AND IMPLEMENTADEQUATE AML PROCEDURES IN VIOLATION OF RULE 3010 AND 3310 AND2010, THE FIRM WAS FINED AN ADDITIONAL $750,000 AND DIRECTED TORETAIN AN INDEPENDENT CONSULTANT AS DETAILED ABOVE.




Resolution:

Other Sanctions Ordered: DISGORGEMENT OF $51,624

Sanction Details: THE SPECIFIC AMOUNTS OF THE FINES (FOR REG. SHO ANDSUPERVISORY VIOLATIONS) AND DISGORGEMENT (FOR REG. SHO) ARESET FORTH ABOVE.

Firm Statement THE FIRM STRONGLY DISPUTES FINRA'S ALLEGATIONS AND HASAPPEALED THE NAC'S DECISION. FINRA'S ALLEGATIONS AND THE NAC'SDECISION WERE BASED ON A SELECTIVE VIEW OF EVIDENCE AND THERELEVANT LAW, ESSENTIALLY IGNORING ANY EVIDENCE (OR LEGALPRECEDENT) THAT DID NOT SUPPORT FINRA'S ALLEGATIONS. INPARTICULAR, IN REGARD TO THE ALLEGATIONS OF "MATCHED TRADES" INA CERTAIN STOCK, THE EVIDENCE DEMONSTRATED THAT THERE WERENO "MATCH TRADES" WHATSOEVER (WHICH FINRA EVENTUALLYADMITTED AT THE HEARING). THE TRADES AT ISSUE WERE INFREQUENTAND GENERALLY INVOLVED LONG TIME, WELL KNOWN CLIENTS WHO AREOUTSTANDING MEMBERS OF THE SALT LAKE CITY COMMUNITY. THESTOCK TRADED AT MINIMAL VOLUME (I.E.,500 OR 1000 SHARES PER DAY)AND THE TRADES WERE REVIEWED BY A PRINCIPAL OF THE FIRM ON ADAILY BASIS. THE ASSERTION THAT THE FIRM (OR MR. SNOW) DID NOTTAILOR ITS AML POLICIES AND SUPERVISION IS NOT SUPPORTED BY THEFACTS OR LEGAL PRECEDENT. LIKEWISE, IN REGARD TO REG. SHOVIOLATIONS, ENFORCEMENT AND THE NAC SELECTIVELY FOCUSED ONLEGAL CONSIDERATIONS IN SUPPORT OF THEIR POSITION WHILEIGNORING SEC GUIDANCE (AND THE APPLICABLE FACTS) THAT DID NOTSUPPORT THE PURPORTED VIOLATION SUCH AS THE SEC'S STATEMENTTHAT "BROKER DEALERS THAT MAKE A MARKET IN A SECURITYGENERALLY STAND READY TO BUY AND SELL THE SECURITY ON AREGULAR AND CONTINUOUS BASIS AT A PUBLICLY QUOTED PRICE, EVENWHEN THERE ARE NO OTHER BUYERS OR SELLERS. THUS, MARKETMAKERS MUST SELL A SECURITY TO A BUYER EVEN WHEN THERE ARETEMPORARY SHORTAGES OF THAT SECURITY AVAILABLE IN THE MARKET.THIS MAY OCCUR, FOR EXAMPLE, IF THERE IS A SUDDEN SURGE INBUYING INTEREST IN THAT SECURITY." THE EVIDENCE ESTABLISHEDTHAT THE FIRM (AND MR. BARKLEY) PROVIDED REASONABLESUPERVISION AND DID NOT VIOLATE REG. SHO. FOR THESE REASONS,AMONG OTHERS (INCLUDING THE IMPOSITION OF PUNITIVE SANCTIONS),THE FIRM FILED AN APPLICATION FOR REVIEW.

Sanctions Ordered: Monetary/Fine $1,100,000.00Disgorgement/Restitution

Decision






THE FIRM STRONGLY DISPUTES FINRA'S ALLEGATIONS AND HASAPPEALED THE NAC'S DECISION. FINRA'S ALLEGATIONS AND THE NAC'SDECISION WERE BASED ON A SELECTIVE VIEW OF EVIDENCE AND THERELEVANT LAW, ESSENTIALLY IGNORING ANY EVIDENCE (OR LEGALPRECEDENT) THAT DID NOT SUPPORT FINRA'S ALLEGATIONS. INPARTICULAR, IN REGARD TO THE ALLEGATIONS OF "MATCHED TRADES" INA CERTAIN STOCK, THE EVIDENCE DEMONSTRATED THAT THERE WERENO "MATCH TRADES" WHATSOEVER (WHICH FINRA EVENTUALLYADMITTED AT THE HEARING). THE TRADES AT ISSUE WERE INFREQUENTAND GENERALLY INVOLVED LONG TIME, WELL KNOWN CLIENTS WHO AREOUTSTANDING MEMBERS OF THE SALT LAKE CITY COMMUNITY. THESTOCK TRADED AT MINIMAL VOLUME (I.E.,500 OR 1000 SHARES PER DAY)AND THE TRADES WERE REVIEWED BY A PRINCIPAL OF THE FIRM ON ADAILY BASIS. THE ASSERTION THAT THE FIRM (OR MR. SNOW) DID NOTTAILOR ITS AML POLICIES AND SUPERVISION IS NOT SUPPORTED BY THEFACTS OR LEGAL PRECEDENT. LIKEWISE, IN REGARD TO REG. SHOVIOLATIONS, ENFORCEMENT AND THE NAC SELECTIVELY FOCUSED ONLEGAL CONSIDERATIONS IN SUPPORT OF THEIR POSITION WHILEIGNORING SEC GUIDANCE (AND THE APPLICABLE FACTS) THAT DID NOTSUPPORT THE PURPORTED VIOLATION SUCH AS THE SEC'S STATEMENTTHAT "BROKER DEALERS THAT MAKE A MARKET IN A SECURITYGENERALLY STAND READY TO BUY AND SELL THE SECURITY ON AREGULAR AND CONTINUOUS BASIS AT A PUBLICLY QUOTED PRICE, EVENWHEN THERE ARE NO OTHER BUYERS OR SELLERS. THUS, MARKETMAKERS MUST SELL A SECURITY TO A BUYER EVEN WHEN THERE ARETEMPORARY SHORTAGES OF THAT SECURITY AVAILABLE IN THE MARKET.THIS MAY OCCUR, FOR EXAMPLE, IF THERE IS A SUDDEN SURGE INBUYING INTEREST IN THAT SECURITY." THE EVIDENCE ESTABLISHEDTHAT THE FIRM (AND MR. BARKLEY) PROVIDED REASONABLESUPERVISION AND DID NOT VIOLATE REG. SHO. FOR THESE REASONS,AMONG OTHERS (INCLUDING THE IMPOSITION OF PUNITIVE SANCTIONS),THE FIRM FILED AN APPLICATION FOR REVIEW.






Regulatory - Pending

This type of disclosure event may include a pending formal proceeding initiated by a regulatory authority (e.g., a statesecurities agency, self-regulatory organization, federal regulatory agency such as the Securities and ExchangeCommission, foreign financial regulatory body) for alleged violations of investment-related rules or regulations.

Disclosure 1 of 2


Allegations: THE FIRM WAS NAMED A RESPONDENT IN A FINRA COMPLAINT ALLEGINGTHAT IT WILLFULLY VIOLATED SECTION 10(B) OF THE EXCHANGE ACT ANDRULE 10B-5 THEREUNDER AND VIOLATED FINRA RULE 2020 BYMANIPULATING THE STOCK MARKET. THE COMPLAINT ALLEGES THAT THEFIRM AND A REGISTERED REPRESENTATIVE MANIPULATED THE MARKETFOR A LOW-PRICED, THINLY TRADED, OTC MICROCAP SECURITY ISSUEDBY A COMPANY. THE MANIPULATIVE ACTIVITY BENEFITED NUMEROUSFIRM CUSTOMERS WHO COLLECTIVELY DEPOSITED AND LIQUIDATEDMILLIONS OF SHARES OF THE COMPANY STOCK INTO THE PUBLICMARKETS AT INFLATED PRICES. THE MANIPULATION BEGAN WHEN THEREPRESENTATIVE PURCHASED 250 SHARES OF THE COMPANY STOCK AT$5.00 PER SHARE INTO THE FIRM'S PROPRIETARY ACCOUNT. THISPURCHASE ARTIFICIALLY SET THE CLOSING PRICE OF THE COMPANYSTOCK AT $5.00 PER SHARE AND HELPED RELEASE MILLIONS OF SHARESOF THE COMPANY STOCK HELD BY THE REPRESENTATIVE'S CUSTOMERSFROM RESALE RESTRICTIONS IMPOSED ON THEM BY A LOCK-UP/LEAK-OUT AGREEMENT BETWEEN THE CUSTOMERS AND THE ISSUER. THEREPRESENTATIVE USED HIS ROLE AS A COMPANY MARKET MAKER TOCOORDINATE TRADING IN THE COMPANY, COINCIDENT WITH A COMPANYSTOCK PROMOTION PAID FOR BY ONE OF HIS CUSTOMERS, TO HELPCREATE THE FALSE APPEARANCE OF ACTIVE TRADING IN THE COMPANYSTOCK AT STEADILY INCREASING PRICES. THIS MANIPULATIVE ACTIVITYALLOWED THE REPRESENTATIVE'S CUSTOMERS TO LIQUIDATE THEIRCOMPANY STOCK AT ARTIFICIALLY INFLATED PRICES, GENERATING ATOTAL OF APPROXIMATELY $10 MILLION IN NET SALES PROCEEDS ANDOVER $400,000 IN COMMISSIONS FOR THE FIRM AND THEREPRESENTATIVE. THE COMPLAINT ALSO ALLEGES THAT THE FIRM, ITSHEAD OF TRADING, CHIEF EXECUTIVE OFFICER (CEO), AND CHIEFCOMPLIANCE OFFICER (CCO) FAILED TO ESTABLISH, MAINTAIN, ANDENFORCE A SUPERVISORY SYSTEM, INCLUDING WSPS, REASONABLYDESIGNED TO ACHIEVE COMPLIANCE WITH APPLICABLE SECURITIESLAWS, REGULATIONS, AND FINRA RULES. THE FIRM AND ITS DESIGNATEDSUPERVISORS FAILED TO REASONABLY SUPERVISE THEREPRESENTATIVE'S TRADING BY IGNORING VARIOUS RED FLAGS OFPOTENTIALLY MANIPULATIVE TRADING SET FORTH IN THE FIRM'S WSPSTHAT ALSO FAILED TO ESTABLISH HOW THE FIRM'S TRADING ACTIVITYSHOULD BE SUPERVISED TO DETECT AND PREVENT MANIPULATIVETRADING. IN PRACTICE, NO ONE AT THE FIRM WAS CONDUCTING AREASONABLE REVIEW OF MICROCAP LIQUIDATION AND TRADINGACTIVITY TO DETECT AND PREVENT MANIPULATIVE TRADING, INCLUDINGTHE REPRESENTATIVE'S MANIPULATIVE TRADING ACTIVITY INVOLVINGTHE COMPANY. THE COMPLAINT FURTHER ALLEGES THAT THE FIRM ANDITS CCO, WHO WAS RESPONSIBLE FOR THE FIRM'S AML PROGRAM,FAILED TO ESTABLISH AND IMPLEMENT AML POLICIES AND PROCEDURESREASONABLY DESIGNED TO DETECT, INVESTIGATE AND REPORT, IFNECESSARY, SUSPICIOUS ACTIVITY RELATED TO THE FIRM'S MICROCAPLIQUIDATION BUSINESS. AS A RESULT, NUMEROUS RED FLAGS OFSUSPICIOUS ACTIVITY RELATED TO THE COMPANY'S TRADING ANDLIQUIDATION ACTIVITY WENT UNDETECTED AND UNADDRESSED. INADDITION, THE COMPLAINT ALLEGES THAT THE FIRM AND ITS CEOPROVIDED FALSE AND MISLEADING INFORMATION TO FINRA BYPROVIDING A FALSE AND MISLEADING SPREADSHEET PURPORTING TOREPRESENT A CONTEMPORANEOUS ANNOTATED RECORD OF THE FIRM'SAND THE CEO'S DAILY REVIEW AND SUPERVISION OF THE FIRM'S TRADINGACTIVITY IN THE COMPANY, WHEN, IN FACT, NO SUCH RESPONSIVEDOCUMENTS EXISTED.

Current Status: Pending






Initiated By: FINRA







THE FIRM WAS NAMED A RESPONDENT IN A FINRA COMPLAINT ALLEGINGTHAT IT WILLFULLY VIOLATED SECTION 10(B) OF THE EXCHANGE ACT ANDRULE 10B-5 THEREUNDER AND VIOLATED FINRA RULE 2020 BYMANIPULATING THE STOCK MARKET. THE COMPLAINT ALLEGES THAT THEFIRM AND A REGISTERED REPRESENTATIVE MANIPULATED THE MARKETFOR A LOW-PRICED, THINLY TRADED, OTC MICROCAP SECURITY ISSUEDBY A COMPANY. THE MANIPULATIVE ACTIVITY BENEFITED NUMEROUSFIRM CUSTOMERS WHO COLLECTIVELY DEPOSITED AND LIQUIDATEDMILLIONS OF SHARES OF THE COMPANY STOCK INTO THE PUBLICMARKETS AT INFLATED PRICES. THE MANIPULATION BEGAN WHEN THEREPRESENTATIVE PURCHASED 250 SHARES OF THE COMPANY STOCK AT$5.00 PER SHARE INTO THE FIRM'S PROPRIETARY ACCOUNT. THISPURCHASE ARTIFICIALLY SET THE CLOSING PRICE OF THE COMPANYSTOCK AT $5.00 PER SHARE AND HELPED RELEASE MILLIONS OF SHARESOF THE COMPANY STOCK HELD BY THE REPRESENTATIVE'S CUSTOMERSFROM RESALE RESTRICTIONS IMPOSED ON THEM BY A LOCK-UP/LEAK-OUT AGREEMENT BETWEEN THE CUSTOMERS AND THE ISSUER. THEREPRESENTATIVE USED HIS ROLE AS A COMPANY MARKET MAKER TOCOORDINATE TRADING IN THE COMPANY, COINCIDENT WITH A COMPANYSTOCK PROMOTION PAID FOR BY ONE OF HIS CUSTOMERS, TO HELPCREATE THE FALSE APPEARANCE OF ACTIVE TRADING IN THE COMPANYSTOCK AT STEADILY INCREASING PRICES. THIS MANIPULATIVE ACTIVITYALLOWED THE REPRESENTATIVE'S CUSTOMERS TO LIQUIDATE THEIRCOMPANY STOCK AT ARTIFICIALLY INFLATED PRICES, GENERATING ATOTAL OF APPROXIMATELY $10 MILLION IN NET SALES PROCEEDS ANDOVER $400,000 IN COMMISSIONS FOR THE FIRM AND THEREPRESENTATIVE. THE COMPLAINT ALSO ALLEGES THAT THE FIRM, ITSHEAD OF TRADING, CHIEF EXECUTIVE OFFICER (CEO), AND CHIEFCOMPLIANCE OFFICER (CCO) FAILED TO ESTABLISH, MAINTAIN, ANDENFORCE A SUPERVISORY SYSTEM, INCLUDING WSPS, REASONABLYDESIGNED TO ACHIEVE COMPLIANCE WITH APPLICABLE SECURITIESLAWS, REGULATIONS, AND FINRA RULES. THE FIRM AND ITS DESIGNATEDSUPERVISORS FAILED TO REASONABLY SUPERVISE THEREPRESENTATIVE'S TRADING BY IGNORING VARIOUS RED FLAGS OFPOTENTIALLY MANIPULATIVE TRADING SET FORTH IN THE FIRM'S WSPSTHAT ALSO FAILED TO ESTABLISH HOW THE FIRM'S TRADING ACTIVITYSHOULD BE SUPERVISED TO DETECT AND PREVENT MANIPULATIVETRADING. IN PRACTICE, NO ONE AT THE FIRM WAS CONDUCTING AREASONABLE REVIEW OF MICROCAP LIQUIDATION AND TRADINGACTIVITY TO DETECT AND PREVENT MANIPULATIVE TRADING, INCLUDINGTHE REPRESENTATIVE'S MANIPULATIVE TRADING ACTIVITY INVOLVINGTHE COMPANY. THE COMPLAINT FURTHER ALLEGES THAT THE FIRM ANDITS CCO, WHO WAS RESPONSIBLE FOR THE FIRM'S AML PROGRAM,FAILED TO ESTABLISH AND IMPLEMENT AML POLICIES AND PROCEDURESREASONABLY DESIGNED TO DETECT, INVESTIGATE AND REPORT, IFNECESSARY, SUSPICIOUS ACTIVITY RELATED TO THE FIRM'S MICROCAPLIQUIDATION BUSINESS. AS A RESULT, NUMEROUS RED FLAGS OFSUSPICIOUS ACTIVITY RELATED TO THE COMPANY'S TRADING ANDLIQUIDATION ACTIVITY WENT UNDETECTED AND UNADDRESSED. INADDITION, THE COMPLAINT ALLEGES THAT THE FIRM AND ITS CEOPROVIDED FALSE AND MISLEADING INFORMATION TO FINRA BYPROVIDING A FALSE AND MISLEADING SPREADSHEET PURPORTING TOREPRESENT A CONTEMPORANEOUS ANNOTATED RECORD OF THE FIRM'SAND THE CEO'S DAILY REVIEW AND SUPERVISION OF THE FIRM'S TRADINGACTIVITY IN THE COMPANY, WHEN, IN FACT, NO SUCH RESPONSIVEDOCUMENTS EXISTED.


Allegations: ENFORCEMENT ASSERTS THAT A REGISTERED REPRESENTATIVE WITHWILSON-DAVIS ("WILSON-DAVIS" OR "THE FIRM") ENGAGED IN EFFORTS TOMANIPULATE AN OVER-THE-COUNTER STOCK AND THAT CERTAINMEMBERS OF THE FIRM'S MANAGEMENT (AND THEREFORE THE FIRM)FAILED TO ADEQUATELY SUPERVISE THIS REPRESENTATIVE AND FAILEDTO HAVE ADEQUATE AML PROCEDURES AND POLICIES. ENFORCEMENTALSO ALLEGES THAT THE FIRM AND ONE MEMBER OF MANAGEMENTVIOLATED RULE 8210 IN REGARD TO CERTAIN DOCUMENTS PRODUCED.THE FIRM AND THE RELATED INDIVIDUALS STRONGLY DENY ALLENFORCEMENT'S ALLEGATIONS.








Initiated By: FINRA


Disgorgement






ENFORCEMENT ASSERTS THAT A REGISTERED REPRESENTATIVE WITHWILSON-DAVIS ("WILSON-DAVIS" OR "THE FIRM") ENGAGED IN EFFORTS TOMANIPULATE AN OVER-THE-COUNTER STOCK AND THAT CERTAINMEMBERS OF THE FIRM'S MANAGEMENT (AND THEREFORE THE FIRM)FAILED TO ADEQUATELY SUPERVISE THIS REPRESENTATIVE AND FAILEDTO HAVE ADEQUATE AML PROCEDURES AND POLICIES. ENFORCEMENTALSO ALLEGES THAT THE FIRM AND ONE MEMBER OF MANAGEMENTVIOLATED RULE 8210 IN REGARD TO CERTAIN DOCUMENTS PRODUCED.THE FIRM AND THE RELATED INDIVIDUALS STRONGLY DENY ALLENFORCEMENT'S ALLEGATIONS.

Firm Statement THE FIRM (AND ITS MANAGEMENT) AND THE RELEVANT REPRESENTATIVEDENY ENFORCEMENT'S ALLEGATIONS AS SUCH ALLEGATIONS ARE NOTSUPPORTED BY EVIDENCE AND ARE SPECULATIVE IN NATURE. THE FIRMAND THE REGISTERED REPRESENTATIVE AT ISSUE DO NOT ENGAGE INMARKETPLACE MANIPULATION AND HAVE ENGAGED IN CONSTANT,INCREASING, AND GOOD FAITH EFFORTS TO MAKE SURE THAT, INREGARD TO MARKET MANIPULATION AND AML, THE FIRM DOES NOTALLOW ITS CLIENTS TO USE THE FIRM TO "FACILITATE CRIMINALACTIVITY," OF ANY KIND, THROUGH THE FIRM. THE FIRM LIKEWISEENDEAVORS IN CONSTANT AND APPROPRIATE SUPERVISION OF ITSREPRESENTATIVES, AND THE FIRM AND ITS MANAGEMENT ACTCONSISTENT WITH THE GOOD FAITH AND HIGH STANDARDS OFCOMMERCIAL TRADE. ENFORCEMENT'S ALLEGATIONS TO THE CONTRARYARE SIMPLY INCORRECT.

Disclosure 2 of 2

i


Initiated By: NORTH CAROLINA


Docket/Case Number:



Allegations:













Regulator Statement ON 8/16/85 THE NORTH CAROLINA SECURITIES DIVISION ENERED ANORDER TO CEASE AND DESIST PROHIBITING WILSON-DAVIS AND ITSAGENTS FROM OFFERING AND/OR SELLING SECURITIES TO RESIDENTSOFNORTH CAROLINA UNTIL SUCH SECURITIES ARE REGISTERED ORCONFIRMATION IS OBTAINED THAT SUCH SECURITIES ARE EXEMPT FROMREGISTRATION. THE ORDER FURTHER PROVIDES THAT WILSON-DAVISAND ITS AGENTS CEASE SELLING SECURITIES TO RESIDENTS OF NORTHCAROLINA UNTIL THE PERSONS MAKING SAID SALES ARE REGISTERED ASSALESMEN IN NORTH CAROLINA. WILSON-DAVIS AND ITS AGENTS NAMEDIN THE ORDER HAVE REQUESTED AND HAVE BEEN GRANTED A HEARING,AND THIS MATTER IS THEREFORE PENDING A HEARING IN THE STATE OFNORTH CAROLINA.


Initiated By: STATE OF NORTH CAROLINA, DEPT. OF THE SECRETARY OF STATE


Cease and Desist



Docket/Case Number: DR85-018



Allegations: ALLEGED VIOLATIONS OF THE BROKER-DEALER, AGENT AND SECURITIESREGISTRATION PROVISIONS OF CHAPTER 78A OF THE NORTH CAROLINAGENERAL STATUTES


Firm Statement THE NORTH CAROLINA SECURITIES DIVISION ENTERED AN ORDER TOCEASE & DESIST PROHIBITING THE FIRM AND ITS AGENTS FROMOFFERING AND/OR SELLING SECURITIES UNTIL SUCH SECURITIES AREREGISTERED OR EXEMPT FROM REGISTRATION AND THAT SUCHPERSONS THAT MAKE THE OFFERS HAVE BEEN REGISTERED TO ACT ASSECURITIES SALESMEN IN NORTH CAROLINA. THE FIRM AND ITS AGENTSNAMED IN THE ORDER HAVE REQUESTED AND BEEN GRANTED AHEARING. THIS MATTER IS PENDING.






THE NORTH CAROLINA SECURITIES DIVISION ENTERED AN ORDER TOCEASE & DESIST PROHIBITING THE FIRM AND ITS AGENTS FROMOFFERING AND/OR SELLING SECURITIES UNTIL SUCH SECURITIES AREREGISTERED OR EXEMPT FROM REGISTRATION AND THAT SUCHPERSONS THAT MAKE THE OFFERS HAVE BEEN REGISTERED TO ACT ASSECURITIES SALESMEN IN NORTH CAROLINA. THE FIRM AND ITS AGENTSNAMED IN THE ORDER HAVE REQUESTED AND BEEN GRANTED AHEARING. THIS MATTER IS PENDING.






Arbitration Award - Award / Judgment

Brokerage firms are not required to report arbitration claims filed against them by customers; however, BrokerCheckprovides summary information regarding FINRA arbitration awards involving securities and commodities disputesbetween public customers and registered securities firms in this section of the report. The full text of arbitration awards issued by FINRA is available at www.finra.org/awardsonline.

Disclosure 1 of 1


Type of Event: ARBITRATION

Arbitration Forum:

Case Initiated:

Case Number:

Allegations:

Disputed Product Type:

Sum of All Relief Requested:

Disposition:

Disposition Date:

Sum of All Relief Awarded:

FINRA

05/05/2015

15-00963

ACCOUNT ACTIVITY-FRAUD; ACCOUNT ACTIVITY-MANIPULATION; ACCOUNTACTIVITY-MISREPRESENTATION; ACCOUNT ACTIVITY-OMISSION OF FACTS;ACCOUNT ACTIVITY-OTHER; ACCOUNT ACTIVITY-SUITABILITY; ACCOUNTACTIVITY-UNAUTHORIZED TRADING; ACCOUNT ACTIVITY-VIOLATE OF BLUESKY LWS

COMMON STOCK; OTHER TYPES OF SECURITIES

$18,000,000.00

AWARD AGAINST PARTY

11/22/2016

$99,441.25

There may be a non-monetary award associated with this arbitration.Please select the Case Number above to view more detailed information.





www.finra.org/awardsonline

https://www.finra.org/arbitration-mediation/arbitration-awards-online?search=15-00963


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