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1 IN THE FEDERAL DISTRICT COURT OF THE MIDDLE DISTRICT OF FLORIDA ORLANDO DIVISION FINANCIAL INDUSTRY ASSOCIATION, G&G HOLDINGS, INC., RICHARD GOBLE, and THE CASE NO ______________ GOBLE FIRST REVOCABLE FAMILY TRUST MAY 13, 1999, Plaintiffs, vs. JURY TRIAL DEMANDED SECURITIES AND EXCHANGE COMMISSION, FINANCIAL INDUSTRY REGULATORY AUTHORITY, INC. (FINRA), THE DEPOSITORY TRUST AND CLEARING CORPORATION (DTCC), MARY SHAPIRO, GRACE VOGEL, LARRY THOMPSON, TIMOTHY WARD, BRUCE BLATMAN, GEORGE FRANCESCHINI, and SAM LUQUE, JR., Defendants. ___________________________________________________/ COMPLAINT Plaintiffs FINANCIAL INDUSTRY ASSOCIATION, G&G HOLDINGS, INC., RICHARD GOBLE, and THE GOBLE FIRST REVOCABLE FAMILY TRUST MAY 13, 1999 ON BEHALF OF ITSELF AND NORTH AMERICAN CLEARING, INC., by and through their undersigned counsel, file this complaint for interference with business relations, abuse of process, defamation, and gross negligence against the above captioned individual Defendants, alleging as follows: PRELIMINARY ALLEGATIONS Jurisdiction 1. This is a complaint for damages exceeding the sum or value of seventy-five thousand dollars, exclusive of interest and costs, between citizens of different states with each Case 6:10-cv-00408-ACC-DAB Document 1 Filed 03/16/10 Page 1 of 34

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Case 6:10-cv-00408-ACC-DAB Document 1

Filed 03/16/10 Page 1 of 34

IN THE FEDERAL DISTRICT COURT OF THE MIDDLE DISTRICT OF FLORIDA ORLANDO DIVISION

FINANCIAL INDUSTRY ASSOCIATION, G&G HOLDINGS, INC., RICHARD GOBLE, and THE GOBLE FIRST REVOCABLE FAMILY TRUST MAY 13, 1999, Plaintiffs,

CASE NO ______________

vs. JURY TRIAL DEMANDED SECURITIES AND EXCHANGE COMMISSION, FINANCIAL INDUSTRY REGULATORY AUTHORITY, INC. (FINRA), THE DEPOSITORY TRUST AND CLEARING CORPORATION (DTCC), MARY SHAPIRO, GRACE VOGEL, LARRY THOMPSON, TIMOTHY WARD, BRUCE BLATMAN, GEORGE FRANCESCHINI, and SAM LUQUE, JR., Defendants. ___________________________________________________/ COMPLAINT Plaintiffs FINANCIAL INDUSTRY ASSOCIATION, G&G HOLDINGS, INC., RICHARD GOBLE, and THE GOBLE FIRST REVOCABLE FAMILY TRUST MAY 13, 1999 ON BEHALF OF ITSELF AND NORTH AMERICAN CLEARING, INC., by and through their undersigned counsel, file this complaint for interference with business relations, abuse of process, defamation, and gross negligence against the above captioned individual Defendants, alleging as follows: PRELIMINARY ALLEGATIONS Jurisdiction 1. This is a complaint for damages exceeding the sum or value of seventy-five

thousand dollars, exclusive of interest and costs, between citizens of different states with each 1

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Defendant either residing or maintaining its principal place of business in a state other than that of the Plaintiffs, and this Honorable Court possesses diversity subject matter jurisdiction pursuant to 28 U.S.C. 1332. Parties and Other Important Persons and Entities 2. Plaintiff G&G HOLDINGS CORPORATION, INC. (hereinafter referred to as

"G&G") is a Florida for profit holding corporation with its principal place of business located at 1385 W State Road 434, Suite 102, Longwood, FL 32750. 3. Plaintiff THE GOBLE FIRST REVOCABLE FAMILY TRUST MAY 13, 1999

(hereinafter referred to as the "Goble Trust") is a revocable trust created by Richard Goble in 1999, with Richard Goble as trustee. The trust is also the sole shareholder of G&G Holdings, Inc., the Financial Industry Association, Inc., and North American Clearing, Inc. 4. Plaintiff RICHARD GOBLE (hereinafter referred to as "Goble") is a natural

person with offices located at 1385 W State Road 434, Suite 102, Longwood, FL 32750. Plaintiff Richard Goble was the director of North American Clearing Corporation when they were placed under receivership pursuant to the lawsuit filed by the Securities and Exchange Commission. 5. Plaintiff FINANCIAL INDUSTRY ASSOCIATION (hereinafter referred to as

"FIA") FIA was the largest and most successful advocate for small broker dealers in the United Sates and as a result of FIAs potential takeover of FINRAs Board from the New York Financial Cartel (CARTEL), FIA was chiefly responsible to the bylaw and name change of the National Association of Securities Dealers (NASD) to the Financial Industry Regulatory Authority (FINRA). FIA elected over 30 FINRA Board Members and Committeemen prior to its destruction by the defendants. Largely because of FIAs efforts, there is another pending case

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directly accusing SEC, FINRA, and Mary Schapiro of fraud and is filed in the Southern District of New York Case No.: 07-CV-2014 (JSR). 6. Defendant SECURITIES AND EXCHANGE COMMISSION (hereinafter

referred to as "SEC") is an agency of the United States government with offices headquartered at 100 F Street N.E., Washington DC 20549. The mission of the Securities and Exchange Commission according to its website is to protect investors, maintain fair, orderly and efficient markets, and facilitate capital formation. The Securities and Exchange Commission, through its officers and employees, embarked on a program to deprive Plaintiffs of due process, and shut down and destroy the business enterprises of Plaintiffs in retaliation for certain political events that had been taking place. 7. Defendant FINANCIAL INDUSTRY REGULATORY AUTHORITY, INC.

(hereinafter referred to as "FINRA") is a Delaware private nonprofit corporation with its principal place of operations located at 1735 K Street NW, Washington DC 20006. FINRA is a Delaware corporation, registered with the Securities and Exchange Commission ("SEC") as a national securities association pursuant to the 1938 Maloney Act Amendments to the Securities Exchange Act of 1934 ("Exchange Act"), 15 U.S.C. 78o-3, 78s(a)(1). FINRA has been commissioned by the financial industry to protect investors by making sure the securities industry operates fairly and honestly. FINRA failed to perform these duties when it deliberately and intentionally sought to interfere with the businesses of Plaintiffs without adequate cause, defame Plaintiffs, abuse process, and conduct a wholly inadequate and negligent investigation of NACI prior to recommending SEC action at detriment to Plaintiffs. 8. Defendant DEPOSITORY TRUST AND CLEARING CORPORATION

(hereinafter referred to as "DTCC"), is a New York for profit corporation with its principal place

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of business located at General Counsel's Office, 55 Water Street, 22nd Floor, New York, NY 10041. The corporation, through its subsidiaries, provides clearing, settlement, and information services for the financial industry. The DTCC, through its agent Larry Thompson, shut down the operations of NACI on the mere allegations of NACI employees Ward and Blatman immediately before the SEC filed injunctive relief against Goble, and without any investigation or consultation with the owner Goble. After being confronted immediately thereafter by Goble who explained the true and compliant state of the company, not only did Larry Thompson refuse to investigate the differing allegations before continuing to deprive NACI of its ability to operate, but also threatened Goble with more severe sanctions. 9. CARLTON FIELDS, P.A., while not presently a party to this lawsuit, (hereinafter

referred to as "Carlton") is a Florida professional association and a law firm with its principal place of business located at Corporate Center Three and International Plaza, 4221 West Boy Scout Boulevard, Suite 1000, Tampa, FL 33607. Carlton Fields presents itself as a firm that handles mass tort litigation, mergers, acquisitions, securities offerings, and bankruptcies among other areas of law. 10. SUTHERLAND, ASBILL & BRENNAN, LLP, while not presently a party to this

lawsuit, (hereinafter referred to as Sutherland Asbill) is a Georgia limited liability partnership whose principal place of business is located at 999 Peachtree Street, N.E., Suite 2300, Atlanta, GA 30309. It is a full service law firm and was the firm of the assigned receiver for North American Clearing, Inc. 11. Defendant MARY SHAPIRO (hereinafter referred to as "Shapiro") is the present

Chairman of the Securities and Exchange Commission. During the matters at issue in this suit, she was the Chairwoman of FINRA which was before that time known as the National

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Association of Securities Dealers (or NASD). Mary Shapiro was instrumental in setting in motion the intentional interference with Plaintiff's business operations. 12. Defendant GRACE VOGEL (hereinafter referred to as "Vogel") is the executive

Vice President of Member Regulation at FINRA. Grace Vogel was acting in consort with Mary Shapiro to interfere with Plaintiffs' businesses as a result of political activity of the Plaintiffs. Vogel was directing the FINRA investigators of NACI ("FINOPS"). 13. Defendant LARRY THOMPSON (hereinafter referred to as "Thompson") is the

managing director and general counsel of the DTCC and was responsible for gross negligence, intentional interference, and improperly shutting down Plaintiff's business operations. The DTCC, through its agent Thompson, shut down the operations of NACI on the mere allegations of NACI employees Ward and Blatman immediately before the SEC filed injunctive relief against Goble, and without any investigation or consultation with the owner Goble. After being confronted immediately thereafter by Goble who explained the true and compliant state of the company, not only did Thompson refuse to investigate the differing allegations before continuing to deprive NACI of its ability to operate, but also threatened Goble with more severe sanctions. 14. WILLIAM BRENNAN and FRANK CHANTAYAN, while not presently parties

to this lawsuit, (hereinafter referred to as "Brennan" and "Chantayan" respectively) are attorneys for the lawfirms Sutherland Asbill and Carlton Fields respectively. They represented Peter Anderson and Robert Gilbert. 15. PETER J. ANDERSON, while not presently a party to this lawsuit, (hereinafter

referred to as "Anderson") was the receiver assigned to North American Clearing in the SEC lawsuit, and attorney for the law firm Sutherland Asbill. He is responsible for gross negligence against the shareholders of NACI, failing to adequately protect the interests of shareholders, and

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promoting the filing of a fraudulent liquidation/bankruptcy action against NACI. He is responsible for gross negligence against the shareholders of NACI, and recommending a fraudulent and unnecessary bankruptcy proceeding to the SIPC by falsely representing the accounting and financial condition of NACI with the assistance of Sam Luque, Jr. and other employees of the receivership. 17. ROBERT GILBERT (hereinafter referred to as "Gilbert"), while not presently a

party to this lawsuit, is a natural person and an attorney shareholder at Carlton Fields, P.A. who was appointed trustee to administer the bankruptcy filed by the receiver in the SIPC action against North American Clearing, Inc. pending before the United States Bankruptcy Court. Mr. Gilbert has irresponsibility and with gross negligence allowed bankruptcy liquidation of NACI to continue unabated despite his knowledge that the financial condition of the company did not warrant such drastic action. 18. Defendant GEORGE FRANCESCHINI (hereinafter referred to as "Franceschini")

is a branch chief at the SEC and was responsible for coordinating and planning improper action that interfered with Plaintiffs' businesses. 19. Defendant TIMOTHY WARD (hereinafter referred to as "Ward) is a natural

person who was the Chief Financial Officer of North American Clearing, Inc. at the time the SEC began its action against Plaintiffs. He lied to the SEC regarding the activities of NACI, and under pressure from FINRA. 20. Defendant BRUCE BLATMAN (hereinafter referred to as "Blatman") is a natural

person who was the President of North American Clearing, Inc. at the time the SEC began its action against Plaintiffs. He lied to the SEC regarding the activities of NACI, and under pressure from FINRA.

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21.

Defendant SAM LUQUE, JR. (hereinafter referred to as "Luque") is a natural

person and an employee of the SEC, and the NACI receiver. Mr. Luque was originally an employee of the SEC, and upon information and belief now runs an independent consulting company that works with the SEC. Luque, with no formal accounting training or education, was hired by the NACI Receiver Anderson and the SEC to create fabricated NACI financials that were used in the NACI fraudulent bankruptcy filing in July 2008. PRELIMINARY BACKGROUND FACTS 22. Richard Goble opened a company called North American Clearing (NACI) in

1995, a business whose primary purpose was clearing transactions for broker-dealers (the corporation's latest annual report is hereinafter attached as Plaintiffs' Exhibit "A"). The business was not itself a broker- dealer but a place where transactions could be cleared efficiently. At the time of opening and until the present day, NACI was under the regulatory authority of NASD and now FINRA (since the merger of the New York Stock Exchange with NASD). 23. After Goble opened up his clearing business, a significant number of broker-

dealers and other member firms that were regulated by the National Association of Securities Dealers (NASD, now FINRA) became increasingly concerned at their diminishing voice within the self regulatory organization, and the increasingly burdensome regulations imposed on them by the SEC and NASD (now FINRA), making it more difficult for them to establish and maintain viable businesses. As a result, NACI decided to utilize its political rights within the organization to ensure the viability of small broker-dealer firms and NACI's customers. 24. Part of NACI's response was to organize and nominate candidates for local

FINRA district elections around the country, beginning with the district covering the southeastern United States.

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25.

In response to these issues, Goble opened the Financial Industry Association

(hereinafter referred to as "FIA"), a Florida domestic for profit corporation founded in February 2006 that has been mainly involved in selecting and determining appropriate candidates for board seats in the regional districts of NASD (now FINRA), and in attempting to secure these positions to ensure adequate representation for small broker-dealer firms and as directed by the Maloney Act of 1938 and the NASD charter of 1939. 26. Candidates that ran under the guidance and direction of the FIA were largely

successful, and in 2006 two of three FIA picked candidates were elected NASD Board of Governor seats. This was a remarkable accomplishment given the history of the NASD (now FINRA). The one candidate to lose, Goble himself, continued to organize and galvanize the small firms into asserting their rights within NASD. It was later discovered the possible reason for Goble's defeat is that Schapiro, then Chairman of FINRA, had allowed many of Gobles faxed ballots to be uncounted or discarded. This clearly showed the bias of many in power at FINRA that FIA was exposing. 27. The FIA also spearheaded a petition in 2006 demanding the investigation of

NASD (now FINRA) for abusing its powers in favor of large firms against small firms, especially regarding NASD (now FINRA) audits. It also requested the resignation of NASD's (now FINRA's) then chief executive Schapiro for being blatantly aligned with the large Wall Street firms' interests. 28. As a result of the election activities of the FIA, the regional districts and board of

governors of NASD (now FINRA) were coming increasingly under the influence of the small firms, with the ultimate goal of the FIA to free up burdensome and unfair regulations on these businesses.

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29.

In August 2006, the FIA spearheaded further election activities and announced it

would be selecting independent candidates to contest the handpicked NASD (now FINRA) candidates in every regional and national position. This was an unprecedented move in the history of NASD (now FINRA). 30. At the time these activities and elections were taking place, Mary Schapiro was

Chief Executive of NASD (now FINRA). Mary Schapiro, realizing that small broker-dealer firms were beginning to gain increasing influence in the regional districts within NASD, and having had her position within the organization protected through the influence of Goldman Sachs and other large financial corporations, including the main Wall Street financial services firms, became increasingly intent on working within NASD to reduce the influence the activist small firms were having over policy and regulatory decisions. 31. Mary Schapiro met with Goble and and John Busacca, NACIs president and the

co-founder of FIA in Spring 2006 over lunch, explaining that Goldman Sachs and other large financial institutions "paid NASD's bills", and for this reason Schapiro was insisting that FIA cease attempting to nominate its own members for election to NASD Committee and Board seats. No FINRA large clearing firm President had ever received any similar Wells notice in history. 33. During this time many small firms were being threatened with audits and other

burdensome oversight, even to the point of being shut down, to the extent that they were cooperating with FIA and its attempts to secure a more prominent voice for small firms within the organization. These threats extended to Richard Goble and NACI. Most of the audits and disciplinary acts were either completely specious or for minor infractions that could have been easily resolved.

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34.

Two days after Mr Busacca of the FIA announced that all FINRA Board seats

would be contested in the late 2006 election, a "Wells Notice" was issued against Mr. Busacca and Goble. This notice is supposed to be sent by NASD (now FINRA) when it suspects that illegitimate and illegal activities are taking place in a particular firm under its authority. It declared "the staff has made a preliminary determination to recommend that disciplinary action be brought against North American Clearing (NAC) and the individuals below for various violations of NASD and other applicable rules and regulations (1) NAC prepared inaccurate customer reserve formula computations and failed to make required deposits to its special reserve account, and failed to notify NASD of its failure to make such required deposit" (attached as Plaintiff's Exhibit "B"). 35. At this point, it was becoming clear that the NASD and its financial backers like

Goldman Sachs' response to the petition that was organized by FIA were hostile. Many of the firms that signed the petition began to be promptly audited by FINRA for insignificant reasons. 36. The petition was hand delivered to Mr. Robert Colby of the SEC and hand

delivered in four individual private meetings with Goble to four SEC Commissioners appointed by the President of the United States, and Barney Frank Chairman of the House Financial Committee in a private meeting with the FIA, and to a staff member of Senator Jack Reid Chairman of the Senate Financial Committee. Aside from audits of the firms that signed the petition, it was wholly ignored by the SEC and no response was forthcoming. 37. The FIA petition was increasing pressure on Mary Schapiro to resign, and she

began using her position within NASD (now FINRA) to resist this pressure. Through her authority, numerous small firms were being audited, including those who signed the petition.

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Part of her strategy, developed in consort with the large Wall Street firms, was to merge the NYSE (owned by Goldman Sachs) with the then NASD (now FINRA). 38. Two weeks after the August 2006 FIA nomination announcement, and twelve

days after the issuance of the "Wells Notice" to NACI, NASD (now FINRA) under the direction of Mary Schapiro announced their intention to merge NYSE regulatory division owned and controlled by Goldman Sachs and NASD (now FINRA) into the new self regulatory organization to known as the "Financial Industry Regulatory Authority, Inc." or FINRA. 39. FIA and its supporters immediately began to fight the proposal, because it

reduced the small firm representation on the board of governors to a mere three seats, as opposed to the original possible maximum of twenty-four seats. 40. Given the majority ownership control of NYSE by Goldman Sachs, the merger

would also in this way serve to solidify the influence of the large broker-dealers. In short, the ability of small broker-dealer firms to ensure viable representation in making decisions over their own regulation would be severely curtailed or would end altogether. 41. During the election following FIA's announcement to contest all open district

seats and announcement of the planned NYSE/NASD merger, FIA candidates are elected to twenty-one of the thirty-five nationwide regional seats. This was again a stunning victory for small firms in their quest to fairly regulate themselves. 42. This huge success of FIA was the catalyst for the elimination of the small firm

voting rights and small firm control of the NASD, as directed by the United States Congress. Removing small firm voting rights became a high priority for Mary Schapiro, Goldman Sachs, and all of the other involved large firms.

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43.

After the announcement of the proposed NYSE/NASD merger, the FIA and the

Independent Broker Dealer Association (hereinafter known as "IBDA") again called for the resignation of Shapiro and her top management in December 2006 through a vote of no confidence among member firms. This vote was solicited in response to the proposed NYSE and NASD (now FINRA) merger. The press release announcing the vote is attached and incorporated as Exhibit "C". 44. One month later, in January 2007, Shapiro and supporters hired an aggressive

proxy firm to threaten small broker-dealers into voting for the merger. This was accomplished by offering the carrot of thirty-five thousand dollars ($35,000) payment to small firms, based on the money that already belonged to the small firms through their membership ownership of FINRA, if the merger was approved. Advertisements and flyers of NASD's efforts are attached as Plaintiff's Exhibit "D". 45. In addition, FINRA and SEC enforcement officers responsible for investigations

and audits were enlisted to solicit "get out the vote" calls to member firms, which served the double purpose of notification and intimidation. The FINRA announcements carried the implication that their support was necessary, or "anything could happen", including a haphazard and uncertain regulatory future for the small firms, and retaliation for failure to cooperate. 46. Shapiro traveled the country in January seeking to influence small firms to

approve the merger. Notifications of merger details issued by Shapiro were filled with deceptions and misrepresentations. It indicated that the minimum amount of small firm representation would increase, but failed to indicate that total small firm representation would likely be reduced. It also deceptively failed to indicate the reasonableness of any potential payout to the small firms for approving the merger.

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47.

In reality, FIA believed board membership would now be limited to three seats for

small firms, most of the remaining being essentially handpicked representatives of the large Wall Street firms. By January 22, 2007 the merger had been approved over the protestations and activism of FIA and its allied organizations. 48. Soon after Shapiro's national tour, Goble on behalf of NACI and FIA met with

commissioners of the SEC to see what could be done about the proposed merger. Annette Nazareth, Raul Campos, Paul Akins and Kathleen Casey individually attended the private meeting. 49. Nazareth bluntly informed FIA at the meeting that the merger was being

promoted by the Wall Street firms, done to solidify their interests and curtail the recent successes of the small firms in winning elections to regional and board seats, and eventually in the hope of running many of the small firms into insolvency. 50. Nazareth further indicated that the Wall Street firms had no intention of

complying with the Maloney Act of 1938 (Section 15A of the Securities Exchange Act of 1934particularly subsection b(4)), which required fair representation of all member firms. She indicated that FINRA was the means by which the large Wall Street firms would ensure their influence, and hoped to make it almost impossible for small firms to retain their present influence. 51. In August 2007, FIA and IBDA again announced their intent to offer candidates

for all open seats in that year's elections, this time for a total of seven seats. 52. After this announcement, NACI and Busacca who were both fighting through the

FIA and IBDA for the rights of small firms and helped make the announcement, were both cited in a FINRA regulatory complaint on August 13, 2007. The allegations on which the complaint

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was based were again mostly unfounded or minor (Exhibit "E"). FIA, NACI, and IBDA felt that they were being deliberately targeted. 53. In September 2007 FINRA issued a letter (attached as Exhibit "F" and

incorporated by reference) to NACI that it was staying any further disciplinary proceedings based upon its prior 2006 "Wells Notice", after being unable to find any relevant required evidence to continue the investigation. 54. This demonstrated the speciousness of the original Wells Notice. Nothing in this

letter indicated abating, cancelling, or modifying the new disciplinary action initiated in August 2007. In short, it appeared FINRA was throwing allegation after allegation at NACI in order to wear Plaintiffs down, and the moment one specious investigation was closed a new one seemed to begin. 55. At this same time (late 2007- 2008) it was becoming clear to FINRA insiders and

Plaintiffs that massive fraud was being perpetrated by the large financial services firms on Wall Street, including Goldman Sachs, regarding their activities and leveraging before the now wellknown late 2008 financial crisis. 56. FIA's position was that FINRA had done nothing to investigate or discipline these

firms for their irresponsible violations of numerous FINRA rules. In fact, FINRA appeared to be covering up the activities of these firms for as long as possible. 57. FIA, through Goble and his membership on the board of FINRA, threatened to

publicize the huge discrepancy between FINRA's minor discipline of these large firms for their serious transgressions of FINRA regulations, and the FINRA's overbearing discipline against the small broker-dealer firms. It was during the climate of these discussions and arguments that all of the following allegations take place.

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FACTS FROM FINRA'S MARCH- MAY 2008 AUDIT 58. In March 2008, FINRA began its annual audit of NACI. During its audit, FINRA

representatives communicated mostly with Blatman (the President) and Ward (the CFO) of NACI. 59. While initially the investigation seemed to turn up nothing extraordinary,

eventually FINRA claimed to uncover damning information relating to NACI apparently experiencing a "financial crisis", unauthorized trades occurring in customer accounts in order to generate cash funds for operations purposes, and manipulating the firm's account processing system by recording $5.1 million in money market purchases without offsetting this amount by the money market sales in order to keep available funds for operating expenses at their maximum level. All of these allegations were unfounded. 60. While purporting to be a legitimate investigation, this investigation was actually

requested and directed by Shapiro and Vogel. This was ultimately due to the pressure of Goldman Sachs and other "cartel" Wall Street firms. 61. At this time while Goble was the only non-hand picked member of the FINRA

Board of Governors , and was also seen by Schapiro and the Firms as the perfect opportunity to shut down FIA and its successful operations to ensure fair representation for small member firms in the board and regions would never happen or would be delayed for a very long time. 62. At the time of the FINRA investigation that lead to SEC's federal court complaint,

Ward was delinquent in his child support payments by over $30,000 as calculated by the child support enforcement agency of his original state of Wisconsin. Ward had been moving from job to job throughout the country in an attempt to evade these obligations.

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63.

NACI and Goble were contacted by the child support enforcement agency about

the time of the FINRA audit. Ward at this time was fearful of being terminated by NACI because of the child support issue. 64. The recent revelation of Ward's child support issues to NACI and Goble, coupled

with a minor miscalculation Ward made in May 2008 concerning NACI's reserve compilation, induced him to invent a false story about the insolvency of NACI while under pressure from FINRA regulators to "tell all" or face the loss of his job. 65. FINRA regulators exaggerated the seriousness of the violations of Ward's

mistaken reserve miscalculation in their interviews with Ward. They hoped that he would succumb to pressure and reveal any additional information about NACI's possible violations. 66. Ward, nervous he could be fired by NACI at any time after the discovery of the

child support evasion problem, and lose his job as CFO of the company- devised a plan with Blatman (the President of NACI) to fabricate additional false allegations and lie to FINRA. 67. Ward and Blatman were hoping their cooperation with FINRA regulators and

FINOP investigators would enable them to completely control NACI. They felt their positions would be preserved with a new corporate management introduced by the SEC, and the loss of Goble. Ward also faced arrest by the State of Wisconsin for child support evasion should he be fired by Goble. 68. Ward's miscalculation of the May 2008 reserve compilation caused him to be

threatened by FINRA with severe sanctions unless he fully "cooperated" to bring down NACI and expose any other violations. 69. Ward's inexperience in the industry made him oblivious that these threats from

FINRA were without basis, as threats rarely if ever carried out. Ward did not realize that without

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an intention to defraud these were minor mistakes and rule violations that likely would not result in any serious sanctions. 70. Ward also saw advantages to his own career, and used this opportunity to

fabricate deliberate unauthorized money market transfers stories, combined with his false claim of corporate insolvency. 71. Increasing EBOC reserves were required to be held in May 2008 as FINRA's

requirements became more and more stringent. 72. Before the investigation, in early 2008, a number of "trade breaks" occurred at

NACI. These trade breaks were the result of software glitches as NACI was instituting new financial software. In addition, FINRA's 2007 complaint filed against NACI was being resolved at this time. This complaint alleged insufficient funds in the EBOC accounts. 73. At the suggestion of the SEC, it was determined that NACI was able to

recalculate and recategorize some of the EBOC calculations, and that when this was done they were found to have the required sufficient funds. 74. In May 2008 a particular trade break occurred that attracted the attention of the

FINOP investigators. As part of the ordinary course of business, Richard Goble as owner of NACI, along with Blatman and Ward, sought to obtain an approximately five million dollar loan from the firm's bank, to purchase money market positions and decrease the required regulatory reserve amounts. These freed up funds would assist the firm in its ordinary clearing obligations, but were preventative only, and were not required for the company to survive on a day to day basis.

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75.

The bank declined to extend the loan. Faced with this, Blatman and Ward should

have reversed a corresponding money market purchase that they had initiated, in order to ensure reserve account amounts were adequate. 76. Unlike prior "trade breaks" which were really differences based on how the

reserve amount should be calculated, Blatmann honestly forgot to reverse the transaction when the loan was not approved, and when Ward calculated the reserve requirement, the calculation erroneously indicated funds could be withdrawn from the reserve account. 77. As a result, the funds were erroneously withdrawn and the EBOC account was

underfunded. This was not intentional or deliberate on the part of NACI. The ongoing FINRA audit in less than 24 hours discovered this erroneous withdrawl from the reserve account. Since the withdrawal was purely erroneous, this constituted a "trade break", or an unintended error that should not result in serious sanctions from FINRA. 78. Yet FINRA, as part of its investigation, intimidated the inexperienced Ward and

Blatman into "wrongfully confessing" that the entire scheme was intentional, and that NACI was somehow insolvent. 79. These unintentional "trade breaks", including ones involving millions of dollars

for small firms, happen on occasion without ever resulting in any significant sanctions. 80. Under pressure from FINRA regulators, Ward lied about the supposed insolvency

and capital deposit requirement of NACI. These allegations of insolvency and intentional fraud were later determined to be falsehoods by Plaintiffs and their counsel then appearing in the SEC proceedings. 81. After the audit and "investigation" of the FINOPS, Schapiro was faced with a

situation that could be turned into an opportunity to shut down the head of FIA and the voice for

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small firms within FINRA. She immediately pressured the SEC to file a complaint for an injunction against NACI based upon scanty and unreliable evidence and no clear independent evidence of any intentional act of fraud on customer accounts. FINRA knew it was relying upon hastily gathered evidence, and an incomplete investigation. 82. Shapiro and Vogel also intended to destroy and interfere with the contracts and

business relationships of NACI, G&G Holdings, and FIA relating to their customers and constituents. They did this by recommending that the SEC, on scanty evidence and without a more thorough investigation, file an action for injunctive relief against NACI and Goble. 83. Thompson, acting on behalf of the DTCC, shut down NACI a day prior to the

SEC filing, and also threatened NACI directly with being permanently shut down, even after Goble and NACI showed Thompson that it could make a reserve deposit at any time, and that the cash position of the firm was sound. 84. Thompson, in concert with Shapiro and Vogel of FINRA and on behalf of DTCC,

intended to destroy and interfere with the contracts and business relationships of NACI, G&G Holdings, and FIA regarding their customers and constituents. Larry Thompson acted to interfere by shutting down NACI a day before the SEC action was filed. Thompson, as general counsel of DTCC, issued the letter suspending NACI access to DTCC. (DTCC letter to NACI declaring suspension of access is hereinafter attached as Plaintiff's Exhibit "G") 85. Thompson's career had been assisted by the large Wall Street firms, he was aware

of the political conflict within FINRA between FIA and the large Wall Street firms, and he deliberately decided to aid and participate in Shapiro's attempt to destroy NACI.

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86.

He did this ultimately from the pressure of the Wall Street firms. Thompson

deliberately lied to the board of the DTCC, falsely informing them that NACI was insolvent, despite being clearly shown that the firm was completely viable. 87. The SEC action (Case No. 6:2008-CV-00829) was filed and served on May 27,

2008 by the SEC under the direction of Shapiro and Vogel, alleging improper liquidation of customer accounts to save NACI from insolvency. It was based entirely upon the allegations of Ward and Blatman, without any corroboration from Goble, or questioning of Goble. 88. Prior to filing the complaint, Goble was always able to clearly explain and

demonstrate to FINOP investigators how NACI was complying with the FINRA audit and federal regulations. 89. Without any substantiation, and only based on the testimony of Ward and

Blatman and a few vague financial statements, FINRA recommended the SEC file a civil action against NACI to subject it to a temporary restraining order and then eventually shut it down entirely (the original complaint and memorandum of law for temporary restraining order (Case No. 6:2009-CV-00829 are hereinafter attached and incorporated as Exhibit "H"). 90. In this complaint, the SEC alleged that the EBOC accounts were not holding the

reserves required by federal regulations. This was incorrect. The EBOC accounts were holding the required amount. FINRA and SEC during their investigations, and with Ward's help, were calculating them a different way than NACI had previously done. NACI's calculations were also a valid way to calculate the required reserve amounts, and was a method given directly by the FINOP regulators to Ward. 91. Ward knew about both methods of calculating the reserve and used this to his

advantage in accusing NACI of deliberately violating federal regulations. Deposition testimony

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from Ward regarding the two or even more ways to calculate the reserve amount authorized by regulations is hereinafter attached as Plaintiff's Exhibit "I". 92. An occasional miscalculation of the EBOC reserve account would not have been a

serious matter had not Ward and Blatman also accused NACI of sweeping customer money market accounts and moving these amounts into its firm's operating accounts. These allegations also formed the basis of the SEC's complaint. 93. The SEC knew that these allegations were not founded on other readily available

evidence. Additionally, the SEC sought no explanation from Goble. They did not even attempt to question Goble to help resolve these issues. The sweeps and transfers alleged in the SEC complaint never occurred. No money was ever at any time used to pay NACI's operating expenses. 94. The account statements provided as exhibits in the SEC suit showed nothing

except that an erroneous transaction had occurred. 95. In reality, all transfers from money market to cash positions and back were

documented on all customer statements. The initial agreement signed by all clients indicated that these transactions could take place, and all customers consented to these transactions. Luque in his deposition pursuant to the original SEC action admitted that NACI would have the right to liquidate money market funds for certain allowed purposes, including the purposes actually used by NACI (a copy of the relevant pages of this deposition is hereinafter attached as Plaintiff's Exhibit "J"). 96. No transfer was ever made to prevent the firm's insolvency. The transfers were

made in the ordinary course of business as preventative measures. At no point was the business

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facing imminent insolvency or a crisis. Testimony from Ward basically admitting as much is attached as Plaintiff's Exhibit "K". 97. Any transfers and sweeps of money market accounts were permitted according to

NACI's agreement with its clients, where it specifically mentions that NACI reserved the right to transfer money between the money market and other accounts (see Plaintiff's Exhibit "L"). 98. The sweep accounts were not business operating accounts, but other allowed

accounts including margin debts, fails to receive and deliver, and the DTCC settlement account. At no time did NACI use client funds to pay its operating expenses because of insolvency. 99. Schapiro and Vogel knew that the case resulting from the investigation they

headed was without solid basis. The proceeding was intended to interfere with and destroy NACI's business relationships. The SEC aggressively pursued the case against NACI, asking on ex parte motion, without any opportunity for NACI or G&G Holdings to properly respond, that a temporary restraining order/injunction be imposed on the company. 100. A receiver was also requested for NACI. At no time before the ex parte actions

by the SEC did the SEC even attempt to communicate with Goble about any of the false allegations from Blatman and Ward. It is clear that the SEC was never seeking the truth about Ward's and Blatman's false allegations. 101. On the same date (May 27, 2008), two motions- the Emergency Motion for

Temporary Restraining Order, and Emergency Motion to Appoint Receiver- were filed by the SEC. 102. Receiver Anderson of Sutherland Asbill was appointed for NACI. Through

appointment of the Receiver, Goble was denied access to his e-mails, records, statements and other important items, including many items that related to the political activities of FIA. Thus,

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on the very same day, the judge in the case entered orders implementing the SEC's requests. Defendants had no time to respond to these motions. NACI's business was immediately interrupted and the company began losing substantial revenues. 103. Ultimately, the goal of Shapiro, Vogel, Anderson, and Cartel was to use the

Receiver to keep Goble from important FIA records and activities, immediately remove Goble from FINRAs Board of Governors, and eventually use the Securities Investor Protection Act of 1970 to force NACI into fraudulent bankruptcy referral. This was intended to forever destroy Goble's influence in the industry. 104. FINRA's ultimate goal of forcing NACI into and fraudulent bankruptcy and

liquidation was implemented by the formal application of the Securities Investor Protection Corporation filed and served in the SEC action by Securities Investor Protection Corporation (SIPC) lawyers (Case No. 6:2008-CV-00829) on July 24, 2008. This was a formal SIPC application for a protective decree filed pursuant to 15 U.S.C. 78eee(b)(1)(B). 105. The misguided and fraudulent liquidation proceedings began a mere two months

after the filing of the original action. Four days after the SIPC application was entered, Judge Scriven ordered the case transferred to the United States Bankruptcy Court for the Middle District of Florida, and the appointment of Gilbert as Trustee to oversee the continued liquidation of NACI. 106. SIPC requested this decree at the direction of the SEC. SIPC performed its

functions grossly negligently, failing to seek a protective decree in the proper manner. SIPC, through its employees and agents, sought to interfere with the business of NACI by filing a frivolous action based upon unreliable evidence including negligently and fraudulently prepared

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financial statements and coerced witnesses who received substantial amount of wages and bonuses from the SEC for their testimony. 107. This included Blatman and Ward who were paid more than their average normal

wages by the SEC after the ex parte TRO and ex parte Receiver were put in place under false pretenses. 108. SIPC based its action for the protective decree on the financial statements of

Luque, at the time an employee of the SEC. Luque had no formal accounting education. The financial statements falsely purported that NACI was insolvent to the extent of 2.5 million dollars, when in fact it was solvent by approximately 3 million dollars. The fraudulent and false financial statements are hereinafter attached as Exhibit "M". 109. Based upon these fraudulent and negligently prepared financials, ultimately

designed for shutting down and interfering with Plaintiffs' businesses including NACI and FIA, the protective order was entered in the SEC case and bankruptcy liquidation was allowed to proceed under Bankruptcy Case No. 6:08-ap-00145-KSJ. 110. Luque has no formal education and no degrees in the field of accounting. SIPC

based its request for protective order on the basis of financials filed by someone with no formal accounting training. 111. SIPC conducted its own professional financial analysis after the bankruptcy

filing. These financials were provided to Gilbert. Gilbert's SIPC financials, in October, 2008, clearly demostrated that NACI had actually been solvent to the extent of approximately three million dollars.

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112.

There was thus a vast difference between the fraudulently prepared financials of

Luque's analysis commissioned by the receiver at the request of the SEC, and SIPC's prepared financials after the protective order had already been entered. 113. Despite becoming aware of these new financials soon after the protective order

was entered, Gilbert as Trustee of the estate continued to liquidate Plaintiffs' businesses pursuant to the protective order. Gilbert intentionally continued to liquidate the business even after finding that the protective order had no basis. No motion to reconsider the protective order was filed, and nothing was accomplished to mitigate damages to Plaintiffs as a result of the loss of NACI. 114. Plaintiffs have since hired an expert to review the financials and this expert has

independently concluded that NACI's financials were not violating FINRA or SEC regulations such as to warrant the action that was taken against NACI. The report of the expert is hereinafter attached as Plaintiff's Exhibit "N". COUNT I AGAINST ALL DEFENDANTS- TORTIOUS INTERFERENCE WITH PLAINTIFFS' BUSINESS RELATIONSHIPS 115. 116. Plaintiffs reallege and reincorporate paragraphs 1 through 114 herein. All Defendants, jointly and severally, did intend and did interfere with the

business relationships of Plaintiff. Defendants knew that NACI had multiple valuable contracts with numerous clients. These contracts were also essentially the business relationships of Plaintiffs The Goble Trust and Goble, who took substantial efforts to forge these relationships with NACI and profit from them. 117. FINRA, through its agents Schapiro and Vogel, conducted deliberately fraudulent

and irresponsible investigation practices in order to interfere with Plaintiffs' business, and recommended to the SEC the filing a frivolous injunction action designed to destroy NACI's 25

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operations. FINRA's investigations were unjustified and intended to deter NACI's present clients from continuing to place confidence in the business activities of NACI. 118. Plaintiffs, through NACI, had developed and fostered numerous relationships

with broker-dealers across the country. These relationships were the source of income for NACI and ultimately for Goble Trust. 119. FINRA, through its agents Schapiro and Vogel, conducted a wholly baseless and

improper investigation. FINRA failed to investigate all the information readily available to it before filing its complaint in federal district court. When the complaint was filed, NACI's and Goble Trust's business relationships with its present clients were for all intents and purposes effectively annihilated. 120. Once the injunction was filed, Anderson and Sutherland Asbill conducted the

receivership with the ultimate view to the destruction of Plaintiffs' stock value in NACI, by liquidating and closing down accounts, and destroying the relationships developed between NACI and its member broker-dealer companies. 121. Once the SIPC liquidation proceeding was initiated, Gilbert and Carlton Fields

unjustifiably conducted the fraudulent bankruptcy proceeding with a view to forever destroying NACI's business relationship with its clients through the liquidation. 122. Defendant Luque deliberately assisted the receiver in fabricating false financial

statements about NACI in an attempt to reduce the confidence of NACI's clients and destroy its business relationships, ultimately with a view to sending the company into SIPC liquidation proceedings. 123. As a result of Defendants' actions, Plaintiffs' business relationships through NACI

and on behalf of themselves were all destroyed. The destruction of these relationships have

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resulted in substantial lost revenue to NACI, future dividend and distribution income to Plaintiff Goble Trust through its ownership of NACI, lost rent to G&G Holdings, indirectly caused the destruction of the property of FIA, as well as the destruction of Plaintiff Goble Trust's stock value in NACI, all to the extent of one hundred million dollars or more. WHEREFORE Plaintiff requests against all Defendants compensatory damages in the amount of one hundred million dollars, costs of this suit, and such other and further relief as this Honorable Court deems proper. COUNT II AGAINST SEC AND SIPC- ABUSE OF PROCESS 133. 134. Plaintiff realleges and reincorporates paragraphs 1 through 114 above. Defendant SIPC, through its agents, in filing its recommendation for protection,

did issue process and suit against NACI for a purpose other than the intended litigation- namely to assist FINRA and the SEC in shutting down NACI, and through that Goble and FIA's participation and activism on the FINRA board. 135. Anderson and Sutherland Asbill, in deliberately continuing to conduct

receivership proceedings of NACI and recommend the liquidation of NACI, engaged in litigation other than for its intended purpose- namely for the improper and unnecessary purpose of shutting down NACI no matter what the finances and accounting of the company indicated would be in the best interests of creditors and shareholders. 136. Gilbert and Carlton Fields, in deliberately continuing as Trustee to conduct

bankruptcy liquidation proceedings against NACI and throughout the proceedings continuing to liquidate NACI, engaged in litigation before the Courts other than for its intended purposenamely for the improper and unnecessary purpose of shutting down NACI no matter what the

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finances and accounting of the company indicated would be in the best interests of creditors and shareholders at the time. 137. As a result of Defendants' actions, Plaintiffs were collectively damaged to the

extent of millions of dollars. As a result of Defendants' actions, Plaintiffs' business relationships through NACI and on behalf of themselves were all destroyed. The destruction of these relationships have resulted in substantial lost revenue to NACI, future dividend and distribution income to Plaintiff Goble Trust through its ownership of NACI, lost rent to G&G Holdings, indirectly caused the destruction of the property of FIA, as well as the destruction of Plaintiff Goble Trust's stock value in NACI, all to the extent of one hundred million dollars or more. WHEREFORE Plaintiffs request against all Defendants SEC and SIPC compensatory damages in the amount of one hundred million dollars, costs of this suit, and such other and further relief as this Honorable Court deems proper. COUNT IV AGAINST ALL DEFENDANTS- GROSS NEGLIGENCE 138. 139. Plaintiff realleges and reincorporates paragraphs 1 through 114 above. Defendants and their agents, through their actions at various stages before and

during the SEC proceeding against NACI, each breached a duty of care they had toward Plaintiffs. These breaches of this duty of care constituted not mere negligence only, but gross negligence. 140. Defendants FINRA and SIPC had a duty to Plaintiffs to thoroughly and fairly

investigate all claims suspected or arising pursuant to their regulatory authority. Defendants had a duty to be impartial and fair in their evaluation of the evidence, and only impose sanctions and issue process it was validated by evidence of violations.

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141.

At the very least, SIPC had a duty to ensure the financials of NACI were being

accurately assessed and justified a bankruptcy liquidation of the company prior to initiating bankruptcy proceedings. 142. Defendant FINRA breached its duty to Defendants when Defendant FINRA

misleadingly recommended to SEC that the action for relief be filed in Federal District Court. Defendant failed to adequately investigate the allegations of Ward and Blatman, and compile all relevant evidence (including thoroughly interviewing Goble) before making this hasty recommendation to the SEC. 143. FINRA was not only negligent, but grossly negligent and was aware that there

was considerable risk no action worthy of sanctions had taken place. FINRA knew there was considerable risk in not interviewing Goble and seeking a proper explanation from all of NACI's officers. 144. Defendant SIPC breached its duty to make a thorough and accurate accounting of

NACI and determine that its recommendation for liquidation/bankruptcy proceedings was truly in the best interest of creditors. SIPC failed to make this accurate and proper accounting, and used inaccurate information. SIPC was not merely negligent, but grossly negligent and knowingly failed to fulfill all of its obligations under the statute. SIPC proceeded knowing the substantial risk that there was not enough evidence to proceed. 145. Carlton Fields, Gilbert, Sutherland Asbill, and Anderson all negligently

contributed to the unnecessary destruction of NACI by failing to address the issue of NACI's solvency, and appropriately fulfill their fiduciary duties to the company's creditors, shareholder and clients when it was determined that NACI was not insolvent or facing financial distress that would or could harm the various interests in the company.

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146.

Carlton Fields, Gilbert, Sutherland Asbill, and Anderson failed to stay, abate, or

otherwise appropriately address the continued dismantling of NACI when it was realized NACI was never in danger of insolvency, distress, or a danger to its clients, creditors, and shareholders. They had a fiduciary and common law duty to NACI's shareholders to manage the company appropriately. 147. These Defendants were not only negligent, but also grossly negligent in that they

were aware there was a substantial risk that the dismantling of NACI was not being done in the interests of creditors and shareholders. 148. These Defendants failed to adequately manage the company and determine the

extent of its solvency, as well as the propriety and necessity of dismantling the company in bankruptcy proceedings or pursuant to the receivership. 149. Defendant Thompson decided to shut down the operations of NACI prior to the

SEC filing without proper or adequate investigation into the matter. Thompson had no intention of conducting an appropriate investigation into the allegations and recklessly was the first to shut down the operations of NACI, even before the action and injunction were filed by the SEC. 150. As a result of the decision of Thompson, the DTCC failed to abide by its own

standards and regulations in the closing of NACI, and failed to perform its applicable duty to fairly regulate NACI's industry and protect NACI and its shareholders from unfair practices of the agency. 151. Defendant Thompson was even contacted by owner Goble who attempted to

explain that no violations were occurring. Thompson not only refused to listen to Goble's explanation, but threatened that NACI would be permanently dismantled and liquidated if Goble

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sought to file an appeal within the DTCC against Thompson's temporary order to shut down NACI. 152. Thompson knew there was substantial risk that NACI and its shareholders would

be unnecessarily harmed by his threats and actions against the company. Thompson therefore engaged in gross negligence. 153. Defendants Ward and Blatman intentionally misrepresented the internal

operations of NACI. They also spoke regarding issues of which they had no knowledge to SEC and FINRA investigators, recklessly made numerous unfounded allegations against NACI, and breached their duties as employees of NACI and in their service to NACI's clients. Defendants' actions were therefore grossly negligent. 154. Defendant Luque engaged in improper accounting practices in fashioning and

summarizing the books of NACI, and failed to carefully compile the recordkeeping of NACI to present an accurate picture of the company's solvency. Luque, Jr. failed to accurately determine the condition of NACI pursuant to the duties of his employment under the receiver, and thereby breached his duties to the shareholders of NACI, by failing to act in the best interest of the company. 155. All of the Defendants' acts of negligence described in these allegations

proximately caused the damages suffered by Plaintiffs. These damages were the foreseeable results of Defendants' breaches of duty. 156. As a result of Defendants' negligence, Plaintiffs have been damaged to the extent

of millions of dollars due to loss of corporation share value through the dismantling of NACI, loss of rental revenues, loss of prospective corporate earnings and distributions, and loss of assets of the company held as collateral by G&G Holdings and Richard Goble. As a result of

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Defendants' actions, Plaintiffs' business relationships through NACI and on behalf of themselves were all destroyed. The destruction of these relationships have resulted in substantial lost revenue to NACI, future dividend and distribution income to Plaintiff Goble Trust through its ownership of NACI, lost rent to G&G Holdings, indirectly caused the destruction of the property of FIA, as well as the destruction of Plaintiff Goble Trust's stock value in NACI, all to the extent of one hundred million dollars or more. WHEREFORE Plaintiffs seek against all Defendants millions of dollars of compensatory damages in the amount of one hundred million dollars, costs of this suit, rental proceeds, and such other and further relief as this Honorable Court deems proper

COUNT IV AGAINST DEFENDANTS FINRA, SEC, SCHAPIRO, VOGEL, and LUQUEDEFAMATION OF GOBLE TRUST AND GOBLE 157. 158. Plaintiffs reallege and reincorporate paragraphs 1 through 114 above. Defendant FINRA, by itself and through its agents Mary Schapiro and Grace

Vogel, did knowingly and intentionally utter false statements, or alternatively uttered statements that it should have known were false, regarding the condition of NACI to officers of the SEC. These statements included statements to investigators at the SEC just prior to its last investigation of NACI, stating and implicating the officers of NACI were intentionally shifting funds to its operating account to remain solvent. Defendants knew that these statements were false, or at least should have known that they were false. 159. As a result of FINRA's false allegations to Defendant SEC, the SEC itself

launched a campaign to publish erroneous information about the condition of NACI. (See Plaintiff's Exhibit "O")

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160.

As a result of Defendants' actions, NACI's business was destroyed due to the

overzealous and inappropriate investigation of the SEC into allegations that were baseless. 161. Defendant Luque formulated and defamed NACI by understating its solvent

position to regulators. Luque's computations falsely indicated that NACI's financial position was insolvent and that it was incapable of properly running its business without great danger to its clients. This information was then widely published and destroyed NACI's viability as a business. Luque knew or should have known that these accounting statements he prepared about NACI were false. 162. Plaintiffs have suffered substantial injury as a result of these acts of Defendants

into the millions of dollars. As a result of Defendants' actions, Plaintiffs' business relationships through NACI and on behalf of themselves were all destroyed. The destruction of these relationships have resulted in substantial lost revenue to NACI, future dividend and distribution income to Plaintiff Goble Trust through its ownership of NACI, lost rent to G&G Holdings, indirectly caused the destruction of the property of FIA, as well as the destruction of Plaintiff Goble Trust's stock value in NACI, all to the extent of one hundred million dollars or more. WHEREFORE, Plaintiffs Goble Trust and Goble seek compensatory damages in the amount of one hundred million dollars, costs of this suit, attorney's fees, and such other and further relief as this Honorable Court deems proper against Defendants.

DATED this 16th day of March, 2010

Respectfully submitted,

/s/ Philip Bartlett________________ Philip Bartlett, Esq. Florida Bar No. 0045318 33

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The Bartlett Law Firm, P.A. 230 East Marks Street Orlando, FL 32803 (321) 319-0587 (telephone) (866) 596-9215 (facsimile) [email protected] (e-mail) Attorney for Plaintiffs.

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Home > Regulat tory Consoli idation > Gene eral Informa ation > Assertio and ons Facts nterPrin Friendly Regula atory Consol lidation - Asser rtions and Fa acts NASD member firm have been ms n ng s receivin numerous communications from so ources other than NASD that are rela to the re ated ecently annou unced regulato consolid ory dation plan. T The NASD believes tha some of th at hose unications co ontain commu misstate ements of fa and wou like act, uld to set th record str he raight to ensu that ure all mem mbers have a access to acc curate informa ation and a f voting pr fair rocess. Asserti ion: After co onsolidation firms that a n, are currentl regulated only by NA ly ASD will be subject to N NYSE rules. Fact: NASD regulated fir will not be rms subject to any new requirement or ts s this ion. rules as a result of t transacti Once th consolida he ation is comp plete, the new SROin c w consultation with

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industry committees and after Board approvalwill adopt a uniform set of rules flexible enough to accommodate the different business mixes and firm sizes in the industry. Assertion: The balance of small and large firms on the proposed Board of Governors is unfair to small firms. Fact: Quite the opposite is true. The consolidation gives small firms three guaranteed seats on the Board of Governors, which is the same amount as large firms and more than small firms currently are guaranteed on the NASD Board. The consolidation preserves industry representation in the SRO process and guarantees that firms of all sizes will have a significant voice in the governance of the new SRO. In negotiating the transaction, NASD's leadership insisted on industry representation and, in particular, on guaranteed small firm representation. The governance structure achieves those critical goals and is fair and balanced. Assertion: NASD can increase the amount of the $35,000 one-time payment due to all member firms if the consolidation is approved. A much larger payment can and should be made. Fact: A larger payment isn't possible. NASD is a tax-exempt organization and therefore is limited by tax laws

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regarding size and source of payments it can make to its members. The payment of $35,000 per member firm, or a total of $178 million, will be funded byand therefore limited bythe expected value of the incremental cash flows that will be produced by the consolidation transaction. If the special member payment was higher, it could seriously jeopardize NASD's status as a tax-exempt organization, which would result in significantly higher fees for firms. In addition to the special member payment being funded by the transaction itself, NASD is also committed to reducing the costs of regulation as efficiencies accrue from the consolidation, and expects to share those efficiencies with its members through discounts in yearly gross income assessments and reductions in fees. Assertion: The proposed governance changes will effectively restrict the rights of NASD member firms. Fact: Quite the opposite. NASD was absolutely determined to have broad industry representationand small firm representation in particularand we negotiated the best possible agreement to preserve our bedrock principle of industry participation. Each member firm will still get one vote for all: By-Law changes, District committee elections, and

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Board elections in their firm category. Assertion: NASD is rushing its members to vote on the proposed By-Law amendments before they have had ample opportunity to review them. Fact: NASD is not rushing the vote. We are committed to full disclosure and answering member questions about the consolidation plan and its implementationincluding the ByLaw amendments that are needed and the special member meeting that will be held. NASD management is currently in the process of meeting with members across the country to provide more information and answer their questions. All members also will receive (by mail) a detailed information package about the plan and the By-Law amendments that will be voted on at the special meeting. Members will then have 30 days in which to vote, which is in accordance with NASD's By-Laws and consistent with past NASD member votes. Assertion: Small firms will be better off if they reject this deal. Fact: If NASD member firms don't vote to approve the By-Law amendments needed to effectuate this deal, there can be no assurances about the shape of self-regulation moving forward. The SEC is committed to ending redundant, inefficient regulation, and

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this can be achieved through th n d he consolidation plan t the NAS that SD Board o Governors overwhelm of mingly approve For exam ed. mple, the SEC recently approved t NYSE's y the governa ance structur rewhich prohibits all industr participati at ry ion the boa levelas fair ard s representation of th industry. T he The ould choose o other ways t to SEC co change the SRO system that wo ould not perm the broad industry mit particip pation of the current plan n. Asserti ion: Investo will have less protection as ors a result of the propo t osed regulat tory consolidation. Fact: Having the most co g ompetitive, efficien and effecti nt ively regulat ted capital markets in the world is i the in best int terest of American inves stors, and is w the tens of millions of what s s people who invest f their futu for ure deserve Our self-re e. egulatory system will be more efficie and more ent e once the new organizatio is in w on robust o place an fully inte nd egrated. We w will replace a system of two ruleboo f oks, two sep parate regula atory staffs a two and comple etely differen enforceme nt ent systems with a coor s rdinated, integrat effort to keep our ma ted arkets free of fraud and un nfair dealing And g. ne taff with on rulebook, a focused st and no wast effort, th new SRO will ted he be able to find prob blems quicke and er deal wi them faster. ith

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EXHIBIT F

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EXHIBIT G

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DTC 0001

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DTC 0002

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DTC 0003

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DTC 0004

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DTC 0005

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DTC 0006

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DTC 0007

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DTC 0008

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DTC 0009

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DTC 0010

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DTC 0016

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DTC 0017

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EXHIBIT H

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EXHIBIT I

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was the one that had to certify the FOCUS reports, and the weekly reserve comp calculations, and net capital computations. Q Before you started work at North American Clearing,

had you ever done a net capital computation before? A Q A Never. What's a reserve computation? 15c3-3 computation. Bottom line, in layman's

terms, you have to have a certain amount of reserves in a bank for the exclusive benefit of the clients and customers. And, and you have a certain amount of debits on the books, and certain amount of credits on the books. The difference

between the debits and the credits are what you need to reserve in this special bank account. Q Before you began working at North American

Clearing, had you ever done reserve computations before? A Q from? A Learned how to do it from MaryBeth Schmidt. I No, never. Who did you learn how to do a reserve computation

tried to learn it from -- when I first started with the company, Mr. Goble had given me three names of three prior FINOPs that were on board or working as consultants for the company between the time of Mr. Gallagher's death in January to the beginning of April when MaryBeth Schmidt came on

Veritext/Florida Reporting Co. Serving the State of Florida (305) 376-8800

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board. I spoke with those three gentlemen, and I was trying to learn how to do this stuff from them. It was not

easy, because I would get three different opinions from those three gentlemen on how to do the same kind of calculations. Q When did you start doing the net capital

computation by yourself? MS. PAULOSE: BY MR. LEE: Q A You can answer. When did I start doing it by myself? It would have Objection. Relevance.

been starting with the August '07 FOCUS report. Q A Q How often are FOCUS reports done? Monthly. What does a net capital computation show? MS. PAULOSE: A Objection. Relevance.

Net capital computation shows the liquidity of a

equities firm. BY MR. LEE: Q What do you mean by liquidity of an equities firm? MS. PAULOSE: Objection. Relevance.

You want to give me a standing objection to any questions on net capital? I don't believe they're So I can

relevant to allegations in the complaint.

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keep objecting, or we can agree to a standing objection on net capital. MR. LEE: If you're not objecting to the

form of the question, it's preserved anyway, so I don't have problem with if you want -MS. PAULOSE: MR. LEE: A I'll just keep objecting.

Okay. I apologize.

What was the question, again?

BY MR. LEE: Q A What does liquidity mean? Liquidity is how much of the firm's capital they It is really the

have access to on a short-term basis.

equity of a firm, less any fixed assets, less any assets that cannot be converted into a form of cash within 12 months. Examples of that would be fixed assets, any

intangible assets there may be, any receivables that are over 12 months in nature, items like that. Q In August of '07 when you first started doing net

capital computations, was there some minimum requirement that North American Clearing had to have, in net capital? MS. PAULOSE: A Objection. Relevance.

They had to have a minimum 5 percent of the total It's been a

allowable debits, if memory serves me right. while since I've done this.

Veritext/Florida Reporting Co. Serving the State of Florida (305) 376-8800

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EXHIBIT J

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74 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 to the customer. Q. Well, if during the period between reserve

computations, if there was money received from settling a trade -A. Q. Correct. -- that money would not have to be reserved

pursuant to the reserve computation until the next reserve computation was performed, correct? A. Q. That's correct, sir. So from the period of when money is

received, for example, as a result of delivering securities or settling a trade until the next reserve computation is done, there's no requirement to do a reserve computation to safeguard those funds, correct? A. Q. That's correct, sir. And if the c