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BrokerCheck Report

NATIONAL SECURITIES CORPORATION

Section Title

Report Summary

Firm History

CRD# 7569

1

8

Firm Profile 2 - 7

Page(s)

Firm Operations 9 - 18

Disclosure Events 19

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NATIONAL SECURITIESCORPORATION

CRD# 7569

SEC# 8-164

Main Office Location

5000 T-REX AVENUESUITE 300BOCA RATON, FL 33431Regulated by FINRA Florida Office

Mailing Address

5000 T-REX AVENUESUITE 300BOCA RATON, FL 33431

Business Telephone Number

561-981-1000

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 62

Civil Event 2

Arbitration 15

Firm Profile

This firm is classified as a corporation.

This firm was formed in Washington on 01/06/1947.

Its fiscal year ends in September.

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 14 types of businesses.

This firm is affiliated with financial or investmentinstitutions.

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

This firm is registered with:

• the SEC• 3 Self-Regulatory Organizations• 53 U.S. states and territories

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1©2020 FINRA. All rights reserved. Report about NATIONAL SECURITIES CORPORATION


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This firm is classified as a corporation.

This firm was formed in Washington on 01/06/1947.

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 September.

NATIONAL SECURITIES CORPORATION

SEC#

7569

8-164

Main Office Location

Mailing Address

Business Telephone Number

Doing business as NATIONAL SECURITIES CORPORATION

561-981-1000

Regulated by FINRA Florida Office



Other Names of this Firm

Name Where is it used

NAT'L SECURITIES CORP OH

NATIONAL SECURITIES CORP OF WASHINGTON STATE OH

NATIONAL SECURITIES OF WASHINGTON HI

NSC INSURANCE AGENCY CA

NTL INSURANCE AGENCY OK

WASHINGTON NATIONAL SECURITIES CORPORATION AR






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?

NATIONAL HOLDINGS CORPORATION

PARENT, OWNER

75% or more

Yes

Domestic Entity

02/1997

Yes

Is this a domestic or foreignentity or an individual?

Legal Name & CRD# (if any):

Position



Position Start Date


CHAFFEE, HAROLD GERARD

CHIEF COMPLIANCE OFFICER, MANAGING DIRECTOR

Less than 5%

No

Individual

04/2019

Yes

2905661



Position


Position Start Date

KNOPF, FRED N

GENRAL COUNSEL

Less than 5%

Individual

11/2017

6390806








Direct Owners and Executive Officers (continued)

Firm Profile




Less than 5%

No

Yes

Position



Position Start Date


KOENIGSBERG, JOHN A

MANAGING DIRECTOR OF OPERATIONS/PRINCIPAL OPERATIONS OFFICER

Less than 5%

No

Individual

11/2007

Yes

1332374



Position



Position Start Date


MULLEN, MICHAEL ANTHONY

PRESIDENT, EXECUTIVE CHAIRMAN & CEO

Less than 5%

No

Individual

12/2017

Yes

1428116



MULLEN, MICHAEL ANTHONY

1428116








Firm Profile

Position



Position Start Date


DIRECTOR

Less than 5%

No

Individual

01/2017

Yes

1428116


Position



Position Start Date


ORTEGA, DANIEL

CHIEF SUPERVISORY OFFICER, MANAGING DIRECTOR

Less than 5%

No

Individual

04/2019

Yes

3095215



Position


Position Start Date


RICH, JONATHAN CRAIG

HEAD OF INVESTMENT BANKING, EVP

Less than 5%

Individual

10/2009

Yes

2271478









Firm Profile



No

Yes

Position



Position Start Date


RUNKLE, DONALD KENNETH

CHIEF REGULATORY OFFICER, EVP

Less than 5%

No

Individual

04/2019

Yes

2207727



Position



Position Start Date


WATSON, NATALIA TOVAR

FINOP/CFO/ PRINCIPAL FINANCIAL OFFICER

Less than 5%

No

Individual

10/2016

Yes

4782735








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

Indirect Owners

Firm Profile

B. RILEY FINANCIAL, INC.

SHAREHOLDER (COMMON STOCK)

NATIONAL HOLDINGS CORP.

25% but less than 50%

Yes

Domestic Entity

02/2019

Yes



Company through whichindirect ownership isestablished

Relationship to Direct Owner

Relationship Established




NHC HOLDINGS LLC.

SHAREHOLDER (COMMON STOCK)

NATIONAL HOLDINGS CORP.

25% but less than 50%

No

Domestic Entity

02/2019

Yes



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 53 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

Yes

No

No

Federal Regulator Status Date Effective

SEC Approved 02/05/1947

Self-Regulatory Organization Status Date Effective

FINRA Approved 02/03/1947

Cboe BZX Exchange, Inc. Approved 07/01/2009

Nasdaq Stock Market Approved 07/12/2006






Firm Operations

Registrations (continued)

U.S. States &Territories

Status Date Effective

Alabama Approved 05/15/1987

Alaska Approved 01/25/1984

Arizona Approved 02/17/1984

Arkansas Approved 05/10/1984

California Approved 06/17/1981

Colorado Approved 06/17/1983

Connecticut Approved 06/21/1984

Delaware Approved 04/16/1984

District of Columbia Approved 10/28/1984

Florida Approved 03/07/1984

Georgia Approved 11/16/1984

Hawaii Approved 03/27/1984

Idaho Approved 09/07/1984

Illinois Approved 09/04/1984

Indiana Approved 04/04/1984

Iowa Approved 01/05/1988

Kansas Approved 06/14/1984

Kentucky Approved 05/21/1984

Louisiana Approved 01/30/1984

Maine Approved 10/03/1984

Maryland Approved 07/16/1984

Massachusetts Approved 05/21/1984

Michigan Approved 10/22/1984

Minnesota Approved 04/10/1984

Mississippi Approved 04/20/1984

Missouri Approved 07/28/1998

Montana Approved 08/13/1984

Nebraska Approved 07/23/1984

Nevada Approved 07/18/1983

New Hampshire Approved 05/18/1984

New Jersey Approved 08/20/1984

New Mexico Approved 07/10/1984

New York Approved 01/02/1985

U.S. States &Territories

Status Date Effective

North Carolina Approved 06/19/1984

North Dakota Approved 05/15/1984

Ohio Approved 06/05/1984

Oklahoma Approved 04/23/1987

Oregon Approved 01/12/1984

Pennsylvania Approved 10/26/1987

Puerto Rico Approved 08/19/1993

Rhode Island Approved 02/01/1985

South Carolina Approved 05/21/1984

South Dakota Approved 10/17/1984

Tennessee Approved 07/18/1983

Texas Approved 01/12/1985

Utah Approved 09/27/1984

Vermont Approved 07/24/1984

Virgin Islands Approved 06/19/2009

Virginia Approved 08/29/1994

Washington Approved 04/20/1983

West Virginia Approved 06/06/1984

Wisconsin Approved 11/05/1984

Wyoming Approved 08/03/1984






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 effect transactions in commodities, commodity futures, or commodity options.This firm does engage in other non-securities business.

Non-Securities Business Description: NATIONAL MAY DO A SMALL AMOUNT OF INSURANCE BUSINESS.FOREIGN DBAS: NATIONAL SECURITIES CORPORATION (AUSTRALIA),NATIONAL SECURITIES NEW ZEALAND

This firm currently conducts 14 types of businesses.

Types of Business

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

Broker or dealer selling corporate debt securities

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

Mutual fund retailer

U S. government securities dealer

U S. government securities broker

Municipal securities dealer

Municipal securities broker

Broker or dealer selling variable life insurance or annuities

Put and call broker or dealer or option writer

Non-exchange member arranging for transactions in listed securities by exchange member

Trading securities for own account

Private placements of securities

Broker or dealer selling interests in mortgages or other receivables






Firm Operations

Clearing Arrangements

This firm does not 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: RAYMOND JAMES & ASSOCIATES, INC.

Business Address: 880 CARILLON PARKWAYSAINT PETERSBURG, FL 33716

CRD #: 705

Effective Date: 07/30/2019

Description: RAYMOND JAMES & ASSOCIATES, INC. OPERATES UNDER A CLEARINGAGREEMENT FOR NATIONAL SECURITIES.

Name: AXOS CLEARING LLC

Business Address: 9300 UNDERWOOD AVENUESUITE 400OMAHA, NE 68114

CRD #: 117176


Description: AXOS CLEARING LLC, OPERATES UNDER A CLEARING AGREEMENTFOR NATIONAL SECURITIES.

Name: NATIONAL FINANCIAL SERVICES LLC

Business Address: 200 LIBERTY STREET, 5TH FLOORONE WORLD FINANCIAL CENTERNEW YORK, NY 10281

CRD #: 13041


Description: NATIONAL FINANCIAL SERVICES LLC, OPERATES UNDER A CLEARINGAGREEMENT FOR NATIONAL SECURITIES.






Firm Operations

Industry Arrangements

This firm does have books or records maintained by a third party.



CRD #: 705



Name: FMG SERVICES

Business Address: 12395 WORLD TRADE DRSUITE 200SAN DIEGO, CA 92128


Description: ELECTRONIC STORAGE MEDIA SERVICES THROUGH FMG SUITESAMAZON GLACIER SYSTEM.

Name: FMG SUITE LLC

Business Address: 12395 WORLD TRADE DRSUITE 200SAN DIEGO, CA 92128


Description: ELECTRONIC STORAGE MEDIA SERVICES THROUGH MARKETINGPROSERVICES.

Name: DOCUPACE TECHNOLOGIES, LLC

Business Address: 11766 WILSHIRE BLVDSUITE 1120LOS ANGELES, CA 90025


Description: DOCUPACE TECHNOLOGIES, LLC.("DT")PROVIDES ELECTRONICSTORAGE MEDIA SERVICES FOR NATIONAL SECURITIESCORPORATION, USING THE DOCUPACE DOCUMENT MANAGEMENTSYSTEM.

Name: GOLD COAST RECORD STORAGE, INC.






Firm Operations

Industry Arrangements (continued)

This firm does have accounts, funds, or securities maintained by a third party.

Business Address: 1701-A NW 1ST AVENUEBOCA RATON, FL 33432


Description: GOLD COAST PROVIDES OFF-SITE DOCUMENT STORAGE FOR NSC.

Name: GRM INFORMATION MANAGEMENT SERVICES

Business Address: 215 COLES STREETJERSEY CITY, NJ 07310


Description: GRM INFORMATION MANAGEMENT SERVICES PROVIDES OFF-SITEDOCUMENT STORAGE FOR NSC.



CRD #: 117176



Name: IRON MOUNTAIN

Business Address: 19826 RUSSELL ROAD SOUTHSEATTLE, WA 98168


Description: IRON MOUNTAIN PROVIDES OFF-SITE DOCUMENT STORAGE FOR NSC.



CRD #: 13041








Firm Operations


This firm does have customer accounts, funds, or securities maintained by a third party.



CRD #: 705





CRD #: 117176





CRD #: 13041





CRD #: 705




CRD #: 11717615©2020 FINRA. All rights reserved. Report about NATIONAL SECURITIES CORPORATION





Firm Operations


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


CRD #: 117176





CRD #: 13041








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, 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.

Yes

No

No

02/19/2019

1200 NORTH FEDERAL HIGHWAYSUITE 400BOCA RATON, FL 33432

299487

NATIONAL PRIVATE SHARES, INC. is under common control with the firm.

NATIONAL PRIVATE SHARES, INC. IS A REGISTERED INVESTMENTADVISOR, AND IS A SUBSIDIARY OF NATIONAL HOLDINGS CORPORATION.

Description:

Investment AdvisoryActivities:

Securities Activities:

Country:

Foreign Entity:

Effective Date:

Business Address:

CRD #:

Yes

No

No

03/18/2008

1200 NORTH FEDERAL HIGHWAYSUITE 400BOCA RATON, FL 33432

115927

NATIONAL ASSET MANAGEMENT, INC. is under common control with the firm.

NATIONAL ASSET MANAGEMENT IS A REGISTERED INVESTMENT ADVISOR,AND IS A SUBSIDIARY OF NATIONAL HOLDINGS CORPORATION.

Description:

Investment AdvisoryActivities:

Securities Activities:

Country:

Foreign Entity:

Effective Date:

Business Address:

CRD #:






Firm Operations

Organization Affiliates (continued)

NATIONAL ASSET MANAGEMENT IS A REGISTERED INVESTMENT ADVISOR,AND IS A SUBSIDIARY OF NATIONAL HOLDINGS CORPORATION.

Description:

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 0 62 0

Civil Event 2 0 0

Arbitration N/A 15 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.

§ A "settled" matter generally involves an agreement by the parties to resolve the matter.Please note that firms may choose to settle customer disputes or regulatory matters forbusiness or other reasons.

§ 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 62

Reporting Source: Firm

Allegations: NATIONAL SECURITIES CORPORATION APPLIED FOR REGISTRATION WITHTHE EASTERN CARIBBEAN SECURITIES REGULATORY COMMISSION.THEAPPLICATION WAS DENIED ON THE GROUNDS THAT NATIONALSECURITIES CORPORATION DID NOT MEET THE CRITERIA OF EASTERNCARIBBEAN LAW TO RECEIVE A LICENSE.

Current Status: Final






Initiated By: EASTERN CARIBBEAN SECURITIES REGULATORY COMMISSION

Principal Sanction(s)/ReliefSought:

Denial

Other Sanction(s)/ReliefSought:

Date Initiated: 09/14/2018

Docket/Case Number:

Principal Product Type: No Product

Other Product Type(s):

Allegations: NATIONAL SECURITIES CORPORATION APPLIED FOR REGISTRATION WITHTHE EASTERN CARIBBEAN SECURITIES REGULATORY COMMISSION.THEAPPLICATION WAS DENIED ON THE GROUNDS THAT NATIONALSECURITIES CORPORATION DID NOT MEET THE CRITERIA OF EASTERNCARIBBEAN LAW TO RECEIVE A LICENSE.

Resolution Date: 09/14/2018

Resolution:

Other Sanctions Ordered:

Sanction Details: THE APPLICATION WAS DENIED ON THE GROUNDS THAT NATIONALSECURITIES CORPORATION DID NOT MEET THE CRITERIA OF EASTERNCARIBBEAN LAW TO RECEIVE A LICENSE.

Sanctions Ordered: Revocation/Expulsion/Denial

Decision

Disclosure 2 of 62

i

Reporting Source: Regulator

Allegations: ON DECEMBER 29, 2015, THE BANKING COMMISSIONER ENTERED ACONSENT ORDER (NO. CO-15-8256-S) WITH RESPECT TO NATIONALSECURITIES CORPORATION, A CONNECTICUT-REGISTERED BROKER-DEALER WITH ITS PRINCIPAL OFFICE AT 1001 FOURTH AVENUE, SUITE3750, SEATTLE, WASHINGTON. THE CONSENT ORDER ALLEGED THAT THEFIRM ENGAGED IN DISHONEST OR UNETHICAL BUSINESS PRACTICES BY1) EMPLOYING AN INDIVIDUAL WHO ENGAGED IN "COLD-CALLING" ANDASKING QUALIFYING QUESTIONS AT A TIME WHEN THAT INDIVIDUAL WASNOT REGISTERED AS AN AGENT UNDER THE CONNECTICUT UNIFORMSECURITIES ACT; AND 2) EMPLOYING ONE OR MORE AGENTS WHO USEDSALES PRESENTATIONS IN A MISLEADING MANNER. THE CONSENTORDER ALSO ALLEGED THAT THE FIRM FAILED TO MAINTAIN ACCURATEAND CURRENT BOOKS AND RECORDS AND FAILED TO ESTABLISH,ENFORCE AND MAINTAIN AN ADEQUATE SUPERVISORY SYSTEM.







Initiated By: CONNECTICUT


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



Docket/Case Number: CO-15-8256-S

URL for Regulatory Action:

Principal Product Type: Other

Other Product Type(s): ARMOUR RESIDENTIAL REIT, INC. SECURITIES

ON DECEMBER 29, 2015, THE BANKING COMMISSIONER ENTERED ACONSENT ORDER (NO. CO-15-8256-S) WITH RESPECT TO NATIONALSECURITIES CORPORATION, A CONNECTICUT-REGISTERED BROKER-DEALER WITH ITS PRINCIPAL OFFICE AT 1001 FOURTH AVENUE, SUITE3750, SEATTLE, WASHINGTON. THE CONSENT ORDER ALLEGED THAT THEFIRM ENGAGED IN DISHONEST OR UNETHICAL BUSINESS PRACTICES BY1) EMPLOYING AN INDIVIDUAL WHO ENGAGED IN "COLD-CALLING" ANDASKING QUALIFYING QUESTIONS AT A TIME WHEN THAT INDIVIDUAL WASNOT REGISTERED AS AN AGENT UNDER THE CONNECTICUT UNIFORMSECURITIES ACT; AND 2) EMPLOYING ONE OR MORE AGENTS WHO USEDSALES PRESENTATIONS IN A MISLEADING MANNER. THE CONSENTORDER ALSO ALLEGED THAT THE FIRM FAILED TO MAINTAIN ACCURATEAND CURRENT BOOKS AND RECORDS AND FAILED TO ESTABLISH,ENFORCE AND MAINTAIN AN ADEQUATE SUPERVISORY SYSTEM.


Resolution:

Other Sanctions Ordered: THE CONSENT ORDER FINED THE FIRM $4,000 AND DIRECTED THAT ITCEASE AND DESIST FROM REGULATORY VIOLATIONS. IN ADDITION, THECONSENT ORDER REQUIRED THAT THE FIRM REIMBURSE THE AGENCY UPTO $3,500 FOR THE COST OF ONE OR MORE EXAMINATIONS TO BECONDUCTED WITHIN TWENTY-FOUR MONTHS.

Sanction Details: THE CONSENT ORDER ALSO PROVIDED THAT ITS ISSUANCE WAS NOTINTENDED TO GIVE RISE TO DISQUALIFICATIONS UNDER REGULATION DRULE 506(D)(1); REGULATION A RULE 262(A); SECTION 15(B)(4)(H)(II) OFTHE SECURITIES EXCHANGE ACT OF 1934; OR SECTION 203(E)9)(B) OFTHE FEDERAL INVESTMENT ADVISERS ACT OF 1940.

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

Yes

Sanctions Ordered: Monetary/Fine $4,000.00Cease and Desist/Injunction

Consent

iReporting Source: Firm

Allegations: ON DECEMBER 29, 2015, THE BANKING COMMISSIONER ENTERED ACONSENT ORDER (NO. CO-15-8256-S) WITH RESPECT TO NATIONALSECURITIES CORPORATION, A CONNECTICUT-REGISTERED BROKER-DEALER WITH ITS PRINCIPAL OFFICE AT 1001 FOURTH AVENUE, SUITE3750, SEATTLE, WASHINGTON. THE CONSENT ORDER ALLEGED THAT THEFIRM ENGAGED IN DISHONEST OR UNETHICAL BUSINESS PRACTICES BY1) EMPLOYING AN INDIVIDUAL WHO ENGAGED IN "COLD-CALLING" ANDASKING QUALIFYING QUESTIONS AT A TIME WHEN THAT INDIVIDUAL WASNOT REGISTERED AS AN AGENT UNDER THE CONNECTICUT UNIFORMSECURITIES ACT; AND 2) EMPLOYING ONE OR MORE AGENTS WHO USEDSALES PRESENTATIONS IN A MISLEADING MANNER. THE CONSENT ORDERALSO ALLEGED THAT THE FIRM FAILED TO MAINTAIN ACCURATE ANDCURRENT BOOKS AND RECORDS AND FAILED TO ESTABLISH, ENFORCEAND MAINTAIN AN ADEQUATE SUPERVISORY SYSTEM.







Initiated By: STATE OF CONNECTICUT DEPARTMENT OF BANKING





Docket/Case Number: CO-15-8256-S


Other Product Type(s): ARMOUR RESIDENTIAL REIT, INC. SECURITIES

Allegations: ON DECEMBER 29, 2015, THE BANKING COMMISSIONER ENTERED ACONSENT ORDER (NO. CO-15-8256-S) WITH RESPECT TO NATIONALSECURITIES CORPORATION, A CONNECTICUT-REGISTERED BROKER-DEALER WITH ITS PRINCIPAL OFFICE AT 1001 FOURTH AVENUE, SUITE3750, SEATTLE, WASHINGTON. THE CONSENT ORDER ALLEGED THAT THEFIRM ENGAGED IN DISHONEST OR UNETHICAL BUSINESS PRACTICES BY1) EMPLOYING AN INDIVIDUAL WHO ENGAGED IN "COLD-CALLING" ANDASKING QUALIFYING QUESTIONS AT A TIME WHEN THAT INDIVIDUAL WASNOT REGISTERED AS AN AGENT UNDER THE CONNECTICUT UNIFORMSECURITIES ACT; AND 2) EMPLOYING ONE OR MORE AGENTS WHO USEDSALES PRESENTATIONS IN A MISLEADING MANNER. THE CONSENT ORDERALSO ALLEGED THAT THE FIRM FAILED TO MAINTAIN ACCURATE ANDCURRENT BOOKS AND RECORDS AND FAILED TO ESTABLISH, ENFORCEAND MAINTAIN AN ADEQUATE SUPERVISORY SYSTEM.


Resolution:

Other Sanctions Ordered: THE CONSENT ORDER FINED THE FIRM $4,000 AND DIRECTED THAT ITCEASE AND DESIST FROM REGULATORY VIOLATIONS. IN ADDITION, THECONSENT ORDER REQUIRED THAT THE FIRM REIMBURSE THE AGENCY UPTO $3,500 FOR THE COST OF ONE OR MORE EXAMINATIONS TO BECONDUCTED WITHIN TWENTY-FOUR MONTHS.

Sanction Details: THE CONSENT ORDER ALSO PROVIDED THAT ITS ISSUANCE WAS NOTINTENDED TO GIVE RISE TO DISQUALIFICATIONS UNDER REGULATION DRULE 506(D)(1); REGULATION A RULE 262(A); SECTION 15(B)(4)(H)(II) OFTHE SECURITIES EXCHANGE ACT OF 1934; OR SECTION 203(E)9)(B) OFTHE FEDERAL INVESTMENT ADVISERS ACT OF 1940.


Consent

Disclosure 3 of 62

i






Disclosure 3 of 62


Initiated By: FINRA




Docket/Case Number: 2014041850701


Other Product Type(s): MUNICIPAL SECURITIES

Allegations: WITHOUT ADMITTING OR DENYING THE FINDINGS, THE FIRM CONSENTEDTO THE SANCTIONS AND TO THE ENTRY OF FINDINGS THAT IT EFFECTEDCUSTOMER TRANSACTIONS IN A MUNICIPAL SECURITY IN AN AMOUNTLOWER THAN THE MINIMUM DENOMINATION OF THE ISSUE WHICH WERENOT SUBJECT TO AN EXCEPTION UNDER THE RULE.



Resolution:

Other Sanctions Ordered: RESCISSION

Sanction Details: THE FIRM WAS CENSURED, FINED $25,000 AND MUST OFFER RESCISSIONTO THE CUSTOMERS WHO EXECUTED THE TRANSACTIONS AT EITHER THEORIGINAL PURCHASE PRICE OR THE CURRENT FAIR MARKET VALUE,WHICHEVER IS HIGHER. FINE PAID IN FULL JANUARY 7, 2016.


No

Sanctions Ordered: CensureMonetary/Fine $25,000.00

Acceptance, Waiver & Consent(AWC)








Initiated By: FINRA






Other Product Type(s): MUNICIPAL SECURITIES

Allegations: WITHOUT ADMITTING OR DENYING THE FINDINGS, THE FIRM CONSENTEDTO THE SANCTIONS AND TO THE ENTRY OF FINDINGS THAT IT EFFECTEDCUSTOMER TRANSACTIONS IN A MUNICIPAL SECURITY IN AN AMOUNTLOWER THAN THE MINIMUM DENOMINATION OF THE ISSUE WHICH WERENOT SUBJECT TO AN EXCEPTION UNDER THE RULE.


Resolution:

Other Sanctions Ordered: RESCISSION

Sanction Details: THE FIRM WAS CENSURED, FINED $25,000 AND MUST OFFER RESCISSIONTO THE CUSTOMERS WHO EXECUTED THE TRANSACTIONS AT EITHER THEORIGINAL PURCHASE PRICE OR THE CURRENT FAIR MARKET VALUE,WHICHEVER IS HIGHER.



Disclosure 4 of 62

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Allegations: WITHOUT ADMITTING OR DENYING THE FINDINGS, THE FIRM CONSENTEDTO THE SANCTIONS AND TO THE ENTRY OF FINDINGS THAT WHILESOLICITING POTENTIAL INVESTORS FOR SEPARATE PRIVATEPLACEMENTS OFFERINGS, THE FIRM PROVIDED THEM WITH THEREGISTRATION RIGHTS AGREEMENT, THE SECURITIES PURCHASEAGREEMENT (SPA), A NON-DISCLOSURE AGREEMENT, AND A POWERPOINTSLIDE DECK, BUT NONE OF THOSE DOCUMENTS DISCLOSED THE SELLINGCOMPENSATION THE FIRM WOULD RECEIVE FOR ITS ROLE IN SELLINGTHE PRIVATE PLACEMENT, AND IT PROVIDED NO OTHER WRITTENDISCLOSURE OF SUCH COMPENSATION TO POTENTIAL INVESTORS. THEFIRM WAS THE SOLE PLACEMENT AGENT FOR THE SEPARATE PRIVATEPLACEMENTS OFFERED ON BEHALF OF ITS PARENT COMPANY. THE FIRMSALES EFFORTS RAISED $8,835,477 FOR THE FIRST OFFERING THATCONCLUDED ON A PARTICULAR DATE, AND $3,175,000 FOR THE SECONDOFFERING THAT CONCLUDED AS WELL. THE FIRM ULTIMATELY RECEIVEDSELLING COMPENSATION OF $212,291 AND 100,090 RESTRICTED SHARESOF ITS PARENT COMPANY FOR THE FIRST OFFERING AND $158,750 FORTHE SECOND OFFERING. TO REITERATE, THIS COMPENSATION WAS NOTDISCLOSED TO INVESTORS.







Initiated By: FINRA






Other Product Type(s): PRIVATE PLACEMENTS OFFERINGS

WITHOUT ADMITTING OR DENYING THE FINDINGS, THE FIRM CONSENTEDTO THE SANCTIONS AND TO THE ENTRY OF FINDINGS THAT WHILESOLICITING POTENTIAL INVESTORS FOR SEPARATE PRIVATEPLACEMENTS OFFERINGS, THE FIRM PROVIDED THEM WITH THEREGISTRATION RIGHTS AGREEMENT, THE SECURITIES PURCHASEAGREEMENT (SPA), A NON-DISCLOSURE AGREEMENT, AND A POWERPOINTSLIDE DECK, BUT NONE OF THOSE DOCUMENTS DISCLOSED THE SELLINGCOMPENSATION THE FIRM WOULD RECEIVE FOR ITS ROLE IN SELLINGTHE PRIVATE PLACEMENT, AND IT PROVIDED NO OTHER WRITTENDISCLOSURE OF SUCH COMPENSATION TO POTENTIAL INVESTORS. THEFIRM WAS THE SOLE PLACEMENT AGENT FOR THE SEPARATE PRIVATEPLACEMENTS OFFERED ON BEHALF OF ITS PARENT COMPANY. THE FIRMSALES EFFORTS RAISED $8,835,477 FOR THE FIRST OFFERING THATCONCLUDED ON A PARTICULAR DATE, AND $3,175,000 FOR THE SECONDOFFERING THAT CONCLUDED AS WELL. THE FIRM ULTIMATELY RECEIVEDSELLING COMPENSATION OF $212,291 AND 100,090 RESTRICTED SHARESOF ITS PARENT COMPANY FOR THE FIRST OFFERING AND $158,750 FORTHE SECOND OFFERING. TO REITERATE, THIS COMPENSATION WAS NOTDISCLOSED TO INVESTORS.


Resolution:


Sanction Details: THE FIRM WAS CENSURED AND FINED $20,000. 4/28/2015 FINE PAID INFULL.


No











Initiated By: FINRA






Other Product Type(s): PRIVATE PLACEMENTS OFFERINGS



Resolution:


Sanction Details: THE FIRM WAS CENSURED AND FINED $20,000.



Disclosure 5 of 62

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Initiated By: FINRA


Other


N/A





Allegations: WITHOUT ADMITTING OR DENYING THE FINDINGS, THE FIRM CONSENTEDTO THE SANCTIONS AND TO THE ENTRY OF FINDINGS THAT THE FIRMFILED LATE AMENDMENTS TO FORMS U4 AND LATE AMENDMENTS TOFORMS U5, AND ALSO RECLASSIFIED CUSTOMER COMPLAINTS AS SALESPRACTICE VIOLATIONS, AFTER DISCUSSIONS WITH FINRA, RESULTING INADDITIONAL LATE FILINGS. THE FINDINGS STATED THAT THE FIRM FILEDLATE REPORTS OF STATISTICAL AND SUMMARY INFORMATIONREGARDING COMPLAINTS AND SETTLEMENTS. THE FINDINGS ALSOSTATED THAT THE FIRM FAILED TO ENFORCE ITS WRITTEN SUPERVISORYPROCEDURES (WSPS) IN PLACE REGARDING NASD RULE 3070REPORTING AND THE FILING OF FORM U4S AND U5S.



Resolution:


Sanction Details: THE FIRM WAS CENSURED AND FINED $35,000. FINE PAID IN FULL ONDECEMBER 16, 2014.


No










Initiated By: FINRA








Allegations: WITHOUT ADMITTING OR DENYING THE FINDINGS, THE FIRM CONSENTEDTO THE SANCTIONS AND TO THE ENTRY OF FINDINGS THAT THE FIRMFILED LATE AMENDMENTS TO FORMS U4 AND LATE AMENDMENTS TOFORMS U5, AND ALSO RECLASSIFIED CUSTOMER COMPLAINTS AS SALESPRACTICE VIOLATIONS, AFTER DISCUSSIONS WITH FINRA, RESULTING INADDITIONAL LATE FILINGS. THE FINDINGS STATED THAT THE FIRM FAILEDTO REPORT STATISTICAL AND SUMMARY INFORMATION REGARDINGCUSTOMER COMPLAINTS TO FINRA WITHIN THE REQUIRED TIME PERIOD,AND ALSO FILED ADDITIONAL CUSTOMER COMPLAINTS LATE, BUT WITHIN30 DAYS AFTER FINRA NOTIFIED IT THAT FINRA BELIEVED THECOMPLAINTS RELATED TO SALES PRACTICE VIOLATIONS. THE FIRMFAILED TO REPORT SETTLEMENTS OF CUSTOMER FINRA DISPUTERESOLUTION CLAIMS FOR DAMAGES EXCEEDING $15,000 WITHIN THEREQUIRED TIME PERIOD. THE FINDINGS ALSO STATED THAT THE FIRMHAD WRITTEN SUPERVISORY PROCEDURES (WSPS) IN PLACEREGARDING NASD RULE 3070 REPORTING AND THE FILING OF FORM U4SAND U5S. HOWEVER, THE FIRM FAILED TO ENFORCE SUCH PROCEDURESTO ENSURE THE TIMELY AND ACCURATE FILING OF THE REQUIREDINFORMATION.


Resolution:


Sanction Details: THE FIRM WAS CENSURED AND FINED $35,000.



Disclosure 6 of 62

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Allegations: SEC ADMIN RELEASE 34-73508, NOVEMBER 3, 2014: THE SECURITIES ANDEXCHANGE COMMISSION DEEMS IT APPROPRIATE AND IN THE PUBLICINTEREST THAT PUBLIC ADMINISTRATIVE AND CEASE-AND-DESISTPROCEEDINGS BE, AND HEREBY ARE, INSTITUTED PURSUANT TOSECTIONS 15(B), 15B(C)(2) AND 21C OF THE SECURITIES EXCHANGE ACTOF 1934 AGAINST NATIONAL SECURITIES CORP. ("NATIONAL SECURITIES"OR "RESPONDENT"). IN ANTICIPATION OF THE INSTITUTION OF THESEPROCEEDINGS, RESPONDENT HAS SUBMITTED AN OFFER OFSETTLEMENT (THE "OFFER") WHICH THE COMMISSION HAS DETERMINEDTO ACCEPT. SOLELY FOR THE PURPOSE OF THESE PROCEEDINGS ANDANY OTHER PROCEEDINGS BROUGHT BY OR ON BEHALF OF THECOMMISSION, OR TO WHICH THE COMMISSION IS A PARTY, AND WITHOUTADMITTING OR DENYING THE FINDINGS HEREIN, EXCEPT AS TO THECOMMISSION'S JURISDICTION OVER IT AND THE SUBJECT MATTER OFTHESE PROCEEDINGS, WHICH ARE ADMITTED, RESPONDENT CONSENTSTO THE ENTRY OF THIS ORDER INSTITUTING ADMINISTRATIVE ANDCEASE-AND-DESIST PROCEEDINGS PURSUANT TO SECTIONS 15(B),15B(C)(2) AND 21C OF THE SECURITIES EXCHANGE ACT OF 1934, MAKINGFINDINGS, AND IMPOSING REMEDIAL SANCTIONS AND A CEASE-AND-DESIST ORDER. ON THE BASIS OF THIS ORDER AND RESPONDENT'SOFFER, THE COMMISSION FINDS THAT: THESE PROCEEDINGS INVOLVETHE SALE OF NON-INVESTMENT GRADE OR "JUNK" BONDS ISSUED BY THECOMMONWEALTH OF PUERTO RICO ("PUERTO RICO") BY NATIONALSECURITIES, A REGISTERED BROKER-DEALER AND MUNICIPALSECURITIES DEALER, TO A CUSTOMER IN AN AMOUNT BELOW THEMINIMUM DENOMINATION OF THE ISSUE. RULE G-15(F) PROMULGATED BYTHE MUNICIPAL SECURITIES RULEMAKING BOARD ("MSRB") PROHIBITSDEALERS FROM EFFECTING CUSTOMER TRANSACTIONS IN MUNICIPALSECURITIES IN AMOUNTS BELOW THE MINIMUM DENOMINATIONS OF THEISSUES. MINIMUM DENOMINATIONS ARE GENERALLY INTENDED TO LIMITSALES OF MUNICIPAL SECURITIES TO RETAIL INVESTORS FOR WHOMSUCH BONDS MAY NOT BE SUITABLE, BUT THE PROSCRIPTIONS OF RULEG-15(F) APPLY TO ALL TRANSACTIONS WITH CUSTOMERS, REGARDLESSOF WHETHER THE SECURITIES ARE SUITABLE FOR THE CUSTOMER. INMARCH 2014, NATIONAL SECURITIES VIOLATED MSRB RULE G-15(F) BYEXECUTING ONE SALES TRANSACTION IN THE PUERTO RICO BONDS WITHA CUSTOMER IN AN AMOUNT BELOW THE $100,000 MINIMUMDENOMINATION OF THE ISSUE ESTABLISHED BY THE ISSUER, PUERTORICO, AND SPECIFIED IN THE OFFICIAL STATEMENT. THE LIMITEDEXCEPTIONS PROVIDED UNDER MSRB RULE G-15(F) FOR CUSTOMERTRANSACTIONS IN MUNICIPAL SECURITIES BELOW THE MINIMUMDENOMINATION OF AN ISSUE DID NOT APPLY TO THIS TRANSACTION.RESPONDENT SOLICITED THE CUSTOMER SALES TRANSACTION.RESPONDENT INFORMED THE CUSTOMER OF THE RISKS OF TRADING INTHE 2014 BONDS BEFORE EXECUTING THE TRADE. AS A RESULT OF THECONDUCT, RESPONDENT WILLFULLY VIOLATED MSRB RULE G-15(F). AS ARESULT OF RESPONDENT'S WILLFUL VIOLATIONS OF MSRB RULE G-15(F),RESPONDENT WILLFULLY VIOLATED SECTION 15B(C)(1) OF THEEXCHANGE ACT.







Initiated By: UNITED STATES SECURITIES AND EXCHANGE COMMISSION


Cease and Desist



Docket/Case Number: 3-16242


Other Product Type(s): NON-INVESTMENT GRADE OR "JUNK" BONDS

SEC ADMIN RELEASE 34-73508, NOVEMBER 3, 2014: THE SECURITIES ANDEXCHANGE COMMISSION DEEMS IT APPROPRIATE AND IN THE PUBLICINTEREST THAT PUBLIC ADMINISTRATIVE AND CEASE-AND-DESISTPROCEEDINGS BE, AND HEREBY ARE, INSTITUTED PURSUANT TOSECTIONS 15(B), 15B(C)(2) AND 21C OF THE SECURITIES EXCHANGE ACTOF 1934 AGAINST NATIONAL SECURITIES CORP. ("NATIONAL SECURITIES"OR "RESPONDENT"). IN ANTICIPATION OF THE INSTITUTION OF THESEPROCEEDINGS, RESPONDENT HAS SUBMITTED AN OFFER OFSETTLEMENT (THE "OFFER") WHICH THE COMMISSION HAS DETERMINEDTO ACCEPT. SOLELY FOR THE PURPOSE OF THESE PROCEEDINGS ANDANY OTHER PROCEEDINGS BROUGHT BY OR ON BEHALF OF THECOMMISSION, OR TO WHICH THE COMMISSION IS A PARTY, AND WITHOUTADMITTING OR DENYING THE FINDINGS HEREIN, EXCEPT AS TO THECOMMISSION'S JURISDICTION OVER IT AND THE SUBJECT MATTER OFTHESE PROCEEDINGS, WHICH ARE ADMITTED, RESPONDENT CONSENTSTO THE ENTRY OF THIS ORDER INSTITUTING ADMINISTRATIVE ANDCEASE-AND-DESIST PROCEEDINGS PURSUANT TO SECTIONS 15(B),15B(C)(2) AND 21C OF THE SECURITIES EXCHANGE ACT OF 1934, MAKINGFINDINGS, AND IMPOSING REMEDIAL SANCTIONS AND A CEASE-AND-DESIST ORDER. ON THE BASIS OF THIS ORDER AND RESPONDENT'SOFFER, THE COMMISSION FINDS THAT: THESE PROCEEDINGS INVOLVETHE SALE OF NON-INVESTMENT GRADE OR "JUNK" BONDS ISSUED BY THECOMMONWEALTH OF PUERTO RICO ("PUERTO RICO") BY NATIONALSECURITIES, A REGISTERED BROKER-DEALER AND MUNICIPALSECURITIES DEALER, TO A CUSTOMER IN AN AMOUNT BELOW THEMINIMUM DENOMINATION OF THE ISSUE. RULE G-15(F) PROMULGATED BYTHE MUNICIPAL SECURITIES RULEMAKING BOARD ("MSRB") PROHIBITSDEALERS FROM EFFECTING CUSTOMER TRANSACTIONS IN MUNICIPALSECURITIES IN AMOUNTS BELOW THE MINIMUM DENOMINATIONS OF THEISSUES. MINIMUM DENOMINATIONS ARE GENERALLY INTENDED TO LIMITSALES OF MUNICIPAL SECURITIES TO RETAIL INVESTORS FOR WHOMSUCH BONDS MAY NOT BE SUITABLE, BUT THE PROSCRIPTIONS OF RULEG-15(F) APPLY TO ALL TRANSACTIONS WITH CUSTOMERS, REGARDLESSOF WHETHER THE SECURITIES ARE SUITABLE FOR THE CUSTOMER. INMARCH 2014, NATIONAL SECURITIES VIOLATED MSRB RULE G-15(F) BYEXECUTING ONE SALES TRANSACTION IN THE PUERTO RICO BONDS WITHA CUSTOMER IN AN AMOUNT BELOW THE $100,000 MINIMUMDENOMINATION OF THE ISSUE ESTABLISHED BY THE ISSUER, PUERTORICO, AND SPECIFIED IN THE OFFICIAL STATEMENT. THE LIMITEDEXCEPTIONS PROVIDED UNDER MSRB RULE G-15(F) FOR CUSTOMERTRANSACTIONS IN MUNICIPAL SECURITIES BELOW THE MINIMUMDENOMINATION OF AN ISSUE DID NOT APPLY TO THIS TRANSACTION.RESPONDENT SOLICITED THE CUSTOMER SALES TRANSACTION.RESPONDENT INFORMED THE CUSTOMER OF THE RISKS OF TRADING INTHE 2014 BONDS BEFORE EXECUTING THE TRADE. AS A RESULT OF THECONDUCT, RESPONDENT WILLFULLY VIOLATED MSRB RULE G-15(F). AS ARESULT OF RESPONDENT'S WILLFUL VIOLATIONS OF MSRB RULE G-15(F),RESPONDENT WILLFULLY VIOLATED SECTION 15B(C)(1) OF THEEXCHANGE ACT.


Resolution:


Sanction Details: ACCORDINGLY, IT IS ORDERED THAT: RESPONDENT CEASE AND DESISTFROM COMMITTING OR CAUSING ANY VIOLATIONS AND ANY FUTUREVIOLATIONS OF SECTION 15B(C)(1) OF THE EXCHANGE ACT AND MSRBRULE G-15(F) . RESPONDENT IS CENSURED. RESPONDENT SHALL, WITHINSEVEN (7) DAYS OF THE ENTRY OF THIS ORDER, PAY A CIVIL MONEYPENALTY IN THE AMOUNT OF $60,000. RESPONDENT WILLFULLY VIOLATEDMSRB RULE G-15(F). AS A RESULT OF RESPONDENT'S WILLFULVIOLATIONS OF MSRB RULE G-15(F), RESPONDENT WILLFULLY VIOLATEDSECTION 15B(C)(1) OF THE EXCHANGE ACT.

Regulator Statement IN DETERMINING TO ACCEPT THE OFFER, THE COMMISSION CONSIDEREDREMEDIAL ACTS PROMPTLY UNDERTAKEN BY RESPONDENT. AFTER ITWAS MADE AWARE BY COMMISSION STAFF THAT IT HAD EFFECTED ACUSTOMER TRANSACTION IN THE 2014 BONDS BELOW THE MINIMUMDENOMINATION OF THE ISSUE, RESPONDENT CANCELLED THETRANSACTION. RESPONDENT WILL UNDERTAKE TO REVIEW THEADEQUACY OF ITS EXISTING POLICIES AND PROCEDURES RELATING TOCOMPLIANCE WITH MSRB RULE G-15(F). AFTER THAT REVIEW,RESPONDENT WILL MAKE SUCH CHANGES AS ARE NECESSARY TOEFFECT COMPLIANCE WITH MSRB RULE G-15(F), INCLUDING ADOPTINGNEW POLICIES AND PROCEDURES OR SUPPLEMENTING EXISTINGPOLICIES AND PROCEDURES. RESPONDENT WILL IMPLEMENT THESEPOLICIES AND PROCEDURES, AND CONDUCT TRAINING AS TO THEPOLICIES AND PROCEDURES AND COMPLIANCE WITH MSRB RULE G-15(F).RESPONDENT WILL INFORM COMMISSION STAFF NO LATER THAN SIX (6)MONTHS AFTER THE ENTRY OF THIS ORDER THAT IT HAS COMPLIED WITHTHE ABOVE UNDERTAKINGS.


No

Sanctions Ordered: CensureMonetary/Fine $60,000.00Cease and Desist/Injunction

Order






IN DETERMINING TO ACCEPT THE OFFER, THE COMMISSION CONSIDEREDREMEDIAL ACTS PROMPTLY UNDERTAKEN BY RESPONDENT. AFTER ITWAS MADE AWARE BY COMMISSION STAFF THAT IT HAD EFFECTED ACUSTOMER TRANSACTION IN THE 2014 BONDS BELOW THE MINIMUMDENOMINATION OF THE ISSUE, RESPONDENT CANCELLED THETRANSACTION. RESPONDENT WILL UNDERTAKE TO REVIEW THEADEQUACY OF ITS EXISTING POLICIES AND PROCEDURES RELATING TOCOMPLIANCE WITH MSRB RULE G-15(F). AFTER THAT REVIEW,RESPONDENT WILL MAKE SUCH CHANGES AS ARE NECESSARY TOEFFECT COMPLIANCE WITH MSRB RULE G-15(F), INCLUDING ADOPTINGNEW POLICIES AND PROCEDURES OR SUPPLEMENTING EXISTINGPOLICIES AND PROCEDURES. RESPONDENT WILL IMPLEMENT THESEPOLICIES AND PROCEDURES, AND CONDUCT TRAINING AS TO THEPOLICIES AND PROCEDURES AND COMPLIANCE WITH MSRB RULE G-15(F).RESPONDENT WILL INFORM COMMISSION STAFF NO LATER THAN SIX (6)MONTHS AFTER THE ENTRY OF THIS ORDER THAT IT HAS COMPLIED WITHTHE ABOVE UNDERTAKINGS.


Allegations: SEC ADMIN RELEASE 34-73508, NOVEMBER 3, 2014: THE SECURITIES ANDEXCHANGE COMMISSION DEEMS IT APPROPRIATE AND IN THE PUBLICINTEREST THAT PUBLIC ADMINISTRATIVE AND CEASE-AND-DESISTPROCEEDINGS BE, AND HEREBY ARE, INSTITUTED PURSUANT TOSECTIONS 15(B), 15B(C)(2) AND 21C OF THE SECURITIES EXCHANGE ACTOF 1934 AGAINST NATIONAL SECURITIES CORP. ("NATIONAL SECURITIES"OR "RESPONDENT"). IN ANTICIPATION OF THE INSTITUTION OF THESEPROCEEDINGS, RESPONDENT HAS SUBMITTED AN OFFER OFSETTLEMENT (THE "OFFER") WHICH THE COMMISSION HAS DETERMINEDTO ACCEPT. SOLELY FOR THE PURPOSE OF THESE PROCEEDINGS ANDANY OTHER PROCEEDINGS BROUGHT BY OR ON BEHALF OF THECOMMISSION, OR TO WHICH THE COMMISSION IS A PARTY, AND WITHOUTADMITTING OR DENYING THE FINDINGS HEREIN, EXCEPT AS TO THECOMMISSION'S JURISDICTION OVER IT AND THE SUBJECT MATTER OFTHESE PROCEEDINGS, WHICH ARE ADMITTED, RESPONDENT CONSENTSTO THE ENTRY OF THIS ORDER INSTITUTING ADMINISTRATIVE ANDCEASE-AND-DESIST PROCEEDINGS PURSUANT TO SECTIONS 15(B),15B(C)(2) AND 21C OF THE SECURITIES EXCHANGE ACT OF 1934, MAKINGFINDINGS, AND IMPOSING REMEDIAL SANCTIONS AND A CEASE-AND-DESIST ORDER. ON THE BASIS OF THIS ORDER AND RESPONDENT'SOFFER, THE COMMISSION FINDS THAT: THESE PROCEEDINGS INVOLVETHE SALE OF NON-INVESTMENT GRADE OR "JUNK" BONDS ISSUED BY THECOMMONWEALTH OF PUERTO RICO ("PUERTO RICO") BY NATIONALSECURITIES, A REGISTERED BROKER-DEALER AND MUNICIPALSECURITIES DEALER, TO A CUSTOMER IN AN AMOUNT BELOW THEMINIMUM DENOMINATION OF THE ISSUE. RULE G-15(F) PROMULGATED BYTHE MUNICIPAL SECURITIES RULEMAKING BOARD ("MSRB") PROHIBITSDEALERS FROM EFFECTING CUSTOMER TRANSACTIONS IN MUNICIPALSECURITIES IN AMOUNTS BELOW THE MINIMUM DENOMINATIONS OF THEISSUES. MINIMUM DENOMINATIONS ARE GENERALLY INTENDED TO LIMITSALES OF MUNICIPAL SECURITIES TO RETAIL INVESTORS FOR WHOMSUCH BONDS MAY NOT BE SUITABLE, BUT THE PROSCRIPTIONS OF RULEG-15(F) APPLY TO ALL TRANSACTIONS WITH CUSTOMERS, REGARDLESSOF WHETHER THE SECURITIES ARE SUITABLE FOR THE CUSTOMER. INMARCH 2014, NATIONAL SECURITIES VIOLATED MSRB RULE G-15(F) BYEXECUTING ONE SALES TRANSACTION IN THE PUERTO RICO BONDS WITHA CUSTOMER IN AN AMOUNT BELOW THE $100,000 MINIMUMDENOMINATION OF THE ISSUE ESTABLISHED BY THE ISSUER, PUERTORICO, AND SPECIFIED IN THE OFFICIAL STATEMENT. THE LIMITEDEXCEPTIONS PROVIDED UNDER MSRB RULE G-15(F) FOR CUSTOMERTRANSACTIONS IN MUNICIPAL SECURITIES BELOW THE MINIMUMDENOMINATION OF AN ISSUE DID NOT APPLY TO THIS TRANSACTION.RESPONDENT SOLICITED THE CUSTOMER SALES TRANSACTION.RESPONDENT INFORMED THE CUSTOMER OF THE RISKS OF TRADING INTHE 2014 BONDS BEFORE EXECUTING THE TRADE. AS A RESULT OF THECONDUCT, RESPONDENT WILLFULLY VIOLATED MSRB RULE G-15(F). AS ARESULT OF RESPONDENT'S WILLFUL VIOLATIONS OF MSRB RULE G-15(F),RESPONDENT WILLFULLY VIOLATED SECTION 15B(C)(1) OF THEEXCHANGE ACT.







Initiated By: UNITED STATES SECURITIES AND EXCHANGE COMMISSION


Cease and Desist





Other Product Type(s): NON-INVESTMENT GRADE OR "JUNK" BONDS.

SEC ADMIN RELEASE 34-73508, NOVEMBER 3, 2014: THE SECURITIES ANDEXCHANGE COMMISSION DEEMS IT APPROPRIATE AND IN THE PUBLICINTEREST THAT PUBLIC ADMINISTRATIVE AND CEASE-AND-DESISTPROCEEDINGS BE, AND HEREBY ARE, INSTITUTED PURSUANT TOSECTIONS 15(B), 15B(C)(2) AND 21C OF THE SECURITIES EXCHANGE ACTOF 1934 AGAINST NATIONAL SECURITIES CORP. ("NATIONAL SECURITIES"OR "RESPONDENT"). IN ANTICIPATION OF THE INSTITUTION OF THESEPROCEEDINGS, RESPONDENT HAS SUBMITTED AN OFFER OFSETTLEMENT (THE "OFFER") WHICH THE COMMISSION HAS DETERMINEDTO ACCEPT. SOLELY FOR THE PURPOSE OF THESE PROCEEDINGS ANDANY OTHER PROCEEDINGS BROUGHT BY OR ON BEHALF OF THECOMMISSION, OR TO WHICH THE COMMISSION IS A PARTY, AND WITHOUTADMITTING OR DENYING THE FINDINGS HEREIN, EXCEPT AS TO THECOMMISSION'S JURISDICTION OVER IT AND THE SUBJECT MATTER OFTHESE PROCEEDINGS, WHICH ARE ADMITTED, RESPONDENT CONSENTSTO THE ENTRY OF THIS ORDER INSTITUTING ADMINISTRATIVE ANDCEASE-AND-DESIST PROCEEDINGS PURSUANT TO SECTIONS 15(B),15B(C)(2) AND 21C OF THE SECURITIES EXCHANGE ACT OF 1934, MAKINGFINDINGS, AND IMPOSING REMEDIAL SANCTIONS AND A CEASE-AND-DESIST ORDER. ON THE BASIS OF THIS ORDER AND RESPONDENT'SOFFER, THE COMMISSION FINDS THAT: THESE PROCEEDINGS INVOLVETHE SALE OF NON-INVESTMENT GRADE OR "JUNK" BONDS ISSUED BY THECOMMONWEALTH OF PUERTO RICO ("PUERTO RICO") BY NATIONALSECURITIES, A REGISTERED BROKER-DEALER AND MUNICIPALSECURITIES DEALER, TO A CUSTOMER IN AN AMOUNT BELOW THEMINIMUM DENOMINATION OF THE ISSUE. RULE G-15(F) PROMULGATED BYTHE MUNICIPAL SECURITIES RULEMAKING BOARD ("MSRB") PROHIBITSDEALERS FROM EFFECTING CUSTOMER TRANSACTIONS IN MUNICIPALSECURITIES IN AMOUNTS BELOW THE MINIMUM DENOMINATIONS OF THEISSUES. MINIMUM DENOMINATIONS ARE GENERALLY INTENDED TO LIMITSALES OF MUNICIPAL SECURITIES TO RETAIL INVESTORS FOR WHOMSUCH BONDS MAY NOT BE SUITABLE, BUT THE PROSCRIPTIONS OF RULEG-15(F) APPLY TO ALL TRANSACTIONS WITH CUSTOMERS, REGARDLESSOF WHETHER THE SECURITIES ARE SUITABLE FOR THE CUSTOMER. INMARCH 2014, NATIONAL SECURITIES VIOLATED MSRB RULE G-15(F) BYEXECUTING ONE SALES TRANSACTION IN THE PUERTO RICO BONDS WITHA CUSTOMER IN AN AMOUNT BELOW THE $100,000 MINIMUMDENOMINATION OF THE ISSUE ESTABLISHED BY THE ISSUER, PUERTORICO, AND SPECIFIED IN THE OFFICIAL STATEMENT. THE LIMITEDEXCEPTIONS PROVIDED UNDER MSRB RULE G-15(F) FOR CUSTOMERTRANSACTIONS IN MUNICIPAL SECURITIES BELOW THE MINIMUMDENOMINATION OF AN ISSUE DID NOT APPLY TO THIS TRANSACTION.RESPONDENT SOLICITED THE CUSTOMER SALES TRANSACTION.RESPONDENT INFORMED THE CUSTOMER OF THE RISKS OF TRADING INTHE 2014 BONDS BEFORE EXECUTING THE TRADE. AS A RESULT OF THECONDUCT, RESPONDENT WILLFULLY VIOLATED MSRB RULE G-15(F). AS ARESULT OF RESPONDENT'S WILLFUL VIOLATIONS OF MSRB RULE G-15(F),RESPONDENT WILLFULLY VIOLATED SECTION 15B(C)(1) OF THEEXCHANGE ACT.


Resolution:



Sanctions Ordered: CensureMonetary/Fine $60,000.00Cease and Desist/Injunction

Order







Firm Statement RESPONDENT WILL UNDERTAKE TO REVIEW THE ADEQUACY OF ITSEXISTING POLICIES AND PROCEDURES RELATING TO COMPLIANCE WITHMSRB RULE G-15(F). AFTER THAT REVIEW, RESPONDENT WILL MAKE SUCHCHANGES AS ARE NECESSARY TO EFFECT COMPLIANCE WITH MSRBRULE G-15(F), INCLUDING ADOPTING NEW POLICIES AND PROCEDURESOR SUPPLEMENTING EXISTING POLICIES AND PROCEDURES.RESPONDENT WILL IMPLEMENT THESE POLICIES AND PROCEDURES, ANDCONDUCT TRAINING AS TO THE POLICIES AND PROCEDURES ANDCOMPLIANCE WITH MSRB RULE G-15(F). RESPONDENT WILL INFORMCOMMISSION STAFF NO LATER THAN SIX (6) MONTHS AFTER THE ENTRYOF THIS ORDER THAT IT HAS COMPLIED WITH THE ABOVEUNDERTAKINGS.

Disclosure 7 of 62

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Initiated By: STATE OF INDIANA


Other


CONSENT ORDER


Docket/Case Number: CASE #13-0623CA



Allegations: FAILURE TO SUPERVISE IN VIOLATION OF INDIANA UNIFORM SECURITIESACT. IND. CODE 23-19-4-12(D)(9)(2013).



Resolution: Consent







Other Sanctions Ordered: N/A

Sanction Details: $2500 CIVIL PENALTY.

Sanctions Ordered: Monetary/Fine $2,500.00

Disclosure 8 of 62

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Initiated By: FINRA






Other Product Type(s): UNSPECIFIED SECURITIES

Allegations: SEC RULE 10B-10, FINRA RULES 2010, 6380A, 7450, NASD RULE 3010 -NATIONAL SECURITIES CORPORATION INCORRECTLY REPORTED THECAPACITY OF AGENCY TRANSACTIONS TO THE FINRA/NASDAQ TRADEREPORTING FACILITY (FNTRF) AS PRINCIPAL; IN SOME INSTANCES, THEFIRM INCORRECTLY REPORTED THE CAPACITY OF AGENCYTRANSACTIONS TO THE FNTRF AS RISKLESS; AND IN OTHER INSTANCES,THE FIRM INCORRECTLY REPORTED AN AGENCY CLEARING TRADE TOTHE FNTRF AS RISKLESS. THE FIRM TRANSMITTED REPORTS TO THEORDER AUDIT TRAIL SYSTEM (OATS) THAT CONTAINED INACCURATECAPACITY CODES AND AN INACCURATE TIME. THE FIRM FAILED TOPROVIDE WRITTEN NOTIFICATION DISCLOSING TO ITS CUSTOMERS ITSCORRECT CAPACITY IN TRANSACTIONS. THE FIRM'S SUPERVISORYSYSTEM DID NOT PROVIDE FOR SUPERVISION REASONABLY DESIGNEDTO ACHIEVE COMPLIANCE WITH APPLICABLE SECURITIES LAWS,REGULATIONS AND FINRA OR SEC RULES ADDRESSING QUALITY OFMARKET TOPICS. THE FIRM'S WRITTEN SUPERVISORY PROCEDURES(WSPS)FAILED TO PROVIDE FOR MINIMUM REQUIREMENTS FORADEQUATE WSPS CONCERNING ORDER HANDLING; TRADE REPORTING;AND OATS.


Resolution: Acceptance, Waiver & Consent(AWC)35©2020 FINRA. All rights reserved. Report about NATIONAL SECURITIES CORPORATION






Resolution:

Other Sanctions Ordered: UNDERTAKING

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 $23,500 AND REQUIRED TOREVISE ITS WSPS REGARDING ORDER HANDLING; TRADE REPORTING;AND OATS WITHIN 30 BUSINESS DAYS OF ACCEPTANCE OF THIS AWC BYTHE NAC. FINE PAID IN FULL ON JANUARY 22, 2014.


No




Initiated By: FINRA

Allegations: SEC RULE 10B-10, FINRA RULES 2010, 6380A, 7450, NASD RULE 3010 -NATIONAL SECURITIES CORPORATION INCORRECTLY REPORTED THECAPACITY OF AGENCY TRANSACTIONS TO THE FINRA/NASDAQ TRADEREPORTING FACILITY (FNTRF) AS PRINCIPAL; IN SOME INSTANCES, THEFIRM INCORRECTLY REPORTED THE CAPACITY OF AGENCYTRANSACTIONS TO THE FNTRF AS RISKLESS; AND IN OTHER INSTANCES,THE FIRM INCORRECTLY REPORTED AN AGENCY CLEARING TRADE TOTHE FNTRF AS RISKLESS. THE FIRM TRANSMITTED REPORTS TO THEORDER AUDIT TRAIL SYSTEM (OATS) THAT CONTAINED INACCURATECAPACITY CODES AND AN INACCURATE TIME. THE FIRM FAILED TOPROVIDE WRITTEN NOTIFICATION DISCLOSING TO ITS CUSTOMERS ITSCORRECT CAPACITY IN TRANSACTIONS. THE FIRM'S SUPERVISORYSYSTEM DID NOT PROVIDE FOR SUPERVISION REASONABLY DESIGNEDTO ACHIEVE COMPLIANCE WITH APPLICABLE SECURITIES LAWS,REGULATIONS AND FINRA OR SEC RULES ADDRESSING QUALITY OFMARKET TOPICS. THE FIRM'S WRITTEN SUPERVISORY PROCEDURES(WSPS)FAILED TO PROVIDE FOR MINIMUM REQUIREMENTS FORADEQUATE WSPS CONCERNING ORDER HANDLING; TRADE REPORTING;AND OATS.








Other



Docket/Case Number: CASE#20110261110-01




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 $23,500 AND REQUIRED TOREVISE ITS WSPS REGARDING ORDER HANDLING; TRADE REPORTING;AND OATS WITHIN 30 BUSINESS DAYS OF ACCEPTANCE OF THIS AWC BYTHE NAC.



Disclosure 9 of 62

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Allegations: SECTION 15(C) OF THE EXCHANGE ACT, SEC RULE 15C3-1, SECTION 17(A)OF THE EXCHANGE ACT, SEC RULES 17A-3, 17A-5, AND 17A-11, FINRA RULE2010, NASD RULE 3110(A): THE FIRM CONDUCTED A SECURITIES BUSINESSWHILE IT WAS NET CAPITAL DEFICIENT. THE NET CAPITAL DEFICIENCIES,AS WELL AS RELATED BOOKS AND RECORDS VIOLATIONS, STEMMEDFROM THE FIRM'S FAILURE TO TIMELY AND ACCURATELY POST EXPENSESAND RECEIVABLES TO ITS GENERAL LEDGER AND ACCRUE CERTAINEXPENSES, AND CORRECTLY REFLECT INTERCOMPANY TRANSFERS. THEFIRM, THROUGH ITS FINANCIAL AND OPERATIONS PRINCIPAL (FINOP),USED THE GENERAL LEDGER AND SUB-LEDGERS, WHICH WERE UPDATEDBY ANOTHER INDIVIDUAL, TO COMPUTE ITS NET CAPITAL. THEREFORE,ANY INACCURACIES IN THE GENERAL LEDGER AND SUB-LEDGERSRESULTED IN INACCURATE NET CAPITAL COMPUTATIONS AND THERESULTING FOCUS FILINGS. DURING THE PERIOD, THE FIRM MADESEVERAL LATE POSTINGS TO ITS GENERAL LEDGER. THE FIRM ALSOFAILED TO TIMELY POST ALL DEPOSITS AND WITHDRAWALS FROM ITSBANK ACCOUNTS. THE FIRM FAILED TO ACCRUE, ON A DAILY BASIS,EXPENSES AND RECEIVABLES RELATED TO PAYROLL, COMMISSIONSPAYABLE, TELECOMMUNICATIONS, GENERAL EXPENSES, CLEARING FEES,AND COMMISSIONS RECEIVABLE. THE FIRM SELECTIVELY REDUCEDPAYABLES TO AND RECEIVABLES FROM AFFILIATES AND MADECORRESPONDING ADJUSTMENTS TO ADDITIONAL PAID-IN CAPITAL.HOWEVER, THE PAYABLE WAS NOT ACTUALLY FORGIVEN BY THEAFFILIATE, AS EVIDENCED BY THE LACK OF CORPORATE MINUTESCONCERNING THE TRANSACTION AND SUBSEQUENT PAYMENTS TO THEFORGIVING AFFILIATE. THUS, THE FIRM BOOKED TRANSACTIONS FORWHICH THERE WAS NO ECONOMIC SUBSTANCE OR SUPPORT. THE FIRM'STREATMENT OF INTERCOMPANY TRANSACTIONS RESULTED IN THE FIRM'SOVERSTATEMENT OF ITS NET CAPITAL FOR THE LAST BUSINESS DAY OFEACH MONTH DURING A PERIOD. IN CONNECTION WITH THE UNTIMELYAND INACCURATE FINANCIAL ENTRIES, THE FIRM FAILED TO FILE THEREQUISITE NOTIFICATIONS OF ITS NET CAPITAL DEFICIENCIES AT CERTAINTIMES AND FILED INACCURATE MONTHLY FINANCIAL AND OPERATIONALCOMBINED UNIFORM SINGLE (FOCUS) REPORTS FOR THE PERIOD.







Initiated By: FINRA


Other


N/A





SECTION 15(C) OF THE EXCHANGE ACT, SEC RULE 15C3-1, SECTION 17(A)OF THE EXCHANGE ACT, SEC RULES 17A-3, 17A-5, AND 17A-11, FINRA RULE2010, NASD RULE 3110(A): THE FIRM CONDUCTED A SECURITIES BUSINESSWHILE IT WAS NET CAPITAL DEFICIENT. THE NET CAPITAL DEFICIENCIES,AS WELL AS RELATED BOOKS AND RECORDS VIOLATIONS, STEMMEDFROM THE FIRM'S FAILURE TO TIMELY AND ACCURATELY POST EXPENSESAND RECEIVABLES TO ITS GENERAL LEDGER AND ACCRUE CERTAINEXPENSES, AND CORRECTLY REFLECT INTERCOMPANY TRANSFERS. THEFIRM, THROUGH ITS FINANCIAL AND OPERATIONS PRINCIPAL (FINOP),USED THE GENERAL LEDGER AND SUB-LEDGERS, WHICH WERE UPDATEDBY ANOTHER INDIVIDUAL, TO COMPUTE ITS NET CAPITAL. THEREFORE,ANY INACCURACIES IN THE GENERAL LEDGER AND SUB-LEDGERSRESULTED IN INACCURATE NET CAPITAL COMPUTATIONS AND THERESULTING FOCUS FILINGS. DURING THE PERIOD, THE FIRM MADESEVERAL LATE POSTINGS TO ITS GENERAL LEDGER. THE FIRM ALSOFAILED TO TIMELY POST ALL DEPOSITS AND WITHDRAWALS FROM ITSBANK ACCOUNTS. THE FIRM FAILED TO ACCRUE, ON A DAILY BASIS,EXPENSES AND RECEIVABLES RELATED TO PAYROLL, COMMISSIONSPAYABLE, TELECOMMUNICATIONS, GENERAL EXPENSES, CLEARING FEES,AND COMMISSIONS RECEIVABLE. THE FIRM SELECTIVELY REDUCEDPAYABLES TO AND RECEIVABLES FROM AFFILIATES AND MADECORRESPONDING ADJUSTMENTS TO ADDITIONAL PAID-IN CAPITAL.HOWEVER, THE PAYABLE WAS NOT ACTUALLY FORGIVEN BY THEAFFILIATE, AS EVIDENCED BY THE LACK OF CORPORATE MINUTESCONCERNING THE TRANSACTION AND SUBSEQUENT PAYMENTS TO THEFORGIVING AFFILIATE. THUS, THE FIRM BOOKED TRANSACTIONS FORWHICH THERE WAS NO ECONOMIC SUBSTANCE OR SUPPORT. THE FIRM'STREATMENT OF INTERCOMPANY TRANSACTIONS RESULTED IN THE FIRM'SOVERSTATEMENT OF ITS NET CAPITAL FOR THE LAST BUSINESS DAY OFEACH MONTH DURING A PERIOD. IN CONNECTION WITH THE UNTIMELYAND INACCURATE FINANCIAL ENTRIES, THE FIRM FAILED TO FILE THEREQUISITE NOTIFICATIONS OF ITS NET CAPITAL DEFICIENCIES AT CERTAINTIMES AND FILED INACCURATE MONTHLY FINANCIAL AND OPERATIONALCOMBINED UNIFORM SINGLE (FOCUS) REPORTS FOR THE PERIOD.


Resolution:



No









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 $40,000. FINE PAID ONAUGUST 2, 2013.


Initiated By: FINRA

Allegations: SECTION 15(C) OF THE EXCHANGE ACT, SEC RULE 15C3-1, SECTION 17(A)OF THE EXCHANGE ACT, SEC RULES 17A-3, 17A-5, AND 17A-11, FINRA RULE2010, NASD RULE 3110(A): THE FIRM CONDUCTED A SECURITIES BUSINESSWHILE IT WAS NET CAPITAL DEFICIENT. THE NET CAPITAL DEFICIENCIES,AS WELL AS RELATED BOOKS AND RECORDS VIOLATIONS, STEMMEDFROM THE FIRM'S FAILURE TO TIMELY AND ACCURATELY POST EXPENSESAND RECEIVABLES TO ITS GENERAL LEDGER AND ACCRUE CERTAINEXPENSES, AND CORRECTLY REFLECT INTERCOMPANY TRANSFERS. THEFIRM, THROUGH ITS FINANCIAL AND OPERATIONS PRINCIPAL (FINOP),USED THE GENERAL LEDGER AND SUB-LEDGERS, WHICH WERE UPDATEDBY ANOTHER INDIVIDUAL, TO COMPUTE ITS NET CAPITAL. THEREFORE,ANY INACCURACIES IN THE GENERAL LEDGER AND SUB-LEDGERSRESULTED IN INACCURATE NET CAPITAL COMPUTATIONS AND THERESULTING FOCUS FILINGS. DURING THE PERIOD, THE FIRM MADESEVERAL LATE POSTINGS TO ITS GENERAL LEDGER. THE FIRM ALSOFAILED TO TIMELY POST ALL DEPOSITS AND WITHDRAWALS FROM ITSBANK ACCOUNTS. THE FIRM FAILED TO ACCRUE, ON A DAILY BASIS,EXPENSES AND RECEIVABLES RELATED TO PAYROLL, COMMISSIONSPAYABLE, TELECOMMUNICATIONS, GENERAL EXPENSES, CLEARING FEES,AND COMMISSIONS RECEIVABLE. THE FIRM SELECTIVELY REDUCEDPAYABLES TO AND RECEIVABLES FROM AFFILIATES AND MADECORRESPONDING ADJUSTMENTS TO ADDITIONAL PAID-IN CAPITAL.HOWEVER, THE PAYABLE WAS NOT ACTUALLY FORGIVEN BY THEAFFILIATE, AS EVIDENCED BY THE LACK OF CORPORATE MINUTESCONCERNING THE TRANSACTION AND SUBSEQUENT PAYMENTS TO THEFORGIVING AFFILIATE. THUS, THE FIRM BOOKED TRANSACTIONS FORWHICH THERE WAS NO ECONOMIC SUBSTANCE OR SUPPORT. THE FIRM'STREATMENT OF INTERCOMPANY TRANSACTIONS RESULTED IN THE FIRM'SOVERSTATEMENT OF ITS NET CAPITAL FOR THE LAST BUSINESS DAY OFEACH MONTH DURING A PERIOD. IN CONNECTION WITH THE UNTIMELYAND INACCURATE FINANCIAL ENTRIES, THE FIRM FAILED TO FILE THEREQUISITE NOTIFICATIONS OF ITS NET CAPITAL DEFICIENCIES AT CERTAINTIMES AND FILED INACCURATE MONTHLY FINANCIAL AND OPERATIONALCOMBINED UNIFORM SINGLE (FOCUS) REPORTS FOR THE PERIOD.







Initiated By: FINRA


Other







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 $40,000.



Disclosure 10 of 62

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Initiated By: FINRA




Principal Product Type: Debt - Corporate


Allegations: FINRA RULE 2010, NASD RULE 2440, INTERPRETATIVE MATERIAL 2440 -NATIONAL SECURITIES CORPORATION SOLD OR BOUGHT CORPORATEBONDS TO OR FROM CUSTOMERS AND FAILED TO SELL OR BUY SUCHBONDS AT A PRICE THAT WAS FAIR, TAKING INTO CONSIDERATION ALLRELEVANT CIRCUMSTANCES, INCLUDING MARKET CONDITIONS WITHRESPECT TO EACH BOND AT THE TIME OF THE TRANSACTION, THEEXPENSE INVOLVED AND THAT THE FIRM WAS ENTITLED TO A PROFIT.










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 $18,000 AND ORDERED TOPAY $8,964.55, PLUS INTEREST, IN RESTITUTION. A REGISTERED FIRMPRINCIPAL SHALL SUBMIT SATISFACTORY PROOF OF PAYMENT OFRESTITUTION, OR OF REASONABLE AND DOCUMENTED EFFORTSUNDERTAKEN TO EFFECT RESTITUTION, TO FINRA NO LATER THAN 120DAYS AFTER ACCEPTANCE OF THIS AWC. ANY UNDISTRIBUTEDRESTITUTION AND INTEREST SHALL BE FORWARDED TO THEAPPROPRIATE ESCHEAT, UNCLAIMED PROPERTY OR ABANDONEDPROPERTY FUND FOR THE STATE IN WHICH THE CUSTOMER LASTRESIDED. $18,000 FINE PAID IN FULL ON 1/22/2013.


No

Sanctions Ordered: CensureMonetary/Fine $18,000.00Disgorgement/Restitution



Initiated By: FINRA

Allegations: FINRA RULE 2010, NASD RULE 2440, INTERPRETATIVE MATERIAL 2440 -NATIONAL SECURITIES CORPORATION SOLD OR BOUGHT CORPORATEBONDS TO OR FROM CUSTOMERS AND FAILED TO SELL OR BUY SUCHBONDS AT A PRICE THAT WAS FAIR, TAKING INTO CONSIDERATION ALLRELEVANT CIRCUMSTANCES, INCLUDING MARKET CONDITIONS WITHRESPECT TO EACH BOND AT THE TIME OF THE TRANSACTION, THEEXPENSE INVOLVED AND THAT THE FIRM WAS ENTITLED TO A PROFIT.







Initiated By: FINRA


Other







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 $18,000 AND ORDERED TOPAY $8,964.55, PLUS INTEREST, IN RESTITUTION. A REGISTERED FIRMPRINCIPAL SHALL SUBMIT SATISFACTORY PROOF OF PAYMENT OFRESTITUTION, OR OF REASONABLE AND DOCUMENTED EFFORTSUNDERTAKEN TO EFFECT RESTITUTION, TO FINRA NO LATER THAN 120DAYS AFTER ACCEPTANCE OF THIS AWC. ANY UNDISTRIBUTEDRESTITUTION AND INTEREST SHALL BE FORWARDED TO THEAPPROPRIATE ESCHEAT, UNCLAIMED PROPERTY OR ABANDONEDPROPERTY FUND FOR THE STATE IN WHICH THE CUSTOMER LASTRESIDED.



Disclosure 11 of 62

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Allegations: FINRA RULES 2010 AND 3310(A) AND NASD RULES 2110 AND 3011(A): FIRMSARE REQUIRED TO ESTABLISH AND IMPLEMENT POLICIES, PROCEDURES,AND INTERNAL CONTROLS THAT CAN REASONABLY BE EXPECTED TODETECT AND CAUSE THE REPORTING OF SUSPICIOUS TRANSACTIONS,INCLUDING SUSPICIOUS SECURITIES TRANSACTIONS, AS REQUIRED BYTHE BANK SECRECY ACT AND THE IMPLEMENTING REGULATIONSTHEREUNDER.THE FIRM FAILED TO ESTABLISH AND IMPLEMENT ANTI-MONEYLAUNDERING (AML) PROGRAM POLICIES, PROCEDURES AND INTERNALCONTROLS THAT WERE REASONABLY EXPECTED TO DETECT AND CAUSETHE REPORTING OF SUSPICIOUS TRANSACTIONS UNDER THE BANKSECRECY ACT. THE FIRM'S SUPERVISION DEPARTMENT WASRESPONSIBLE FOR THE DAILY REVIEW OF CUSTOMER ACCOUNT ACTIVITY,PRIMARILY THROUGH THE REVIEW OF CONSOLIDATED TRADE BLOTTERSPROVIDED BY A THIRD-PARTY BOOKS AND RECORDS SYSTEM. EACHREVIEWER ONLY RECEIVED THE TRADE BLOTTERS FOR THE TRADINGACTIVITY FOR WHICH HE OR SHE WAS RESPONSIBLE. NO ONE AT THEFIRM REVIEWED THE TRADING ACTIVITY FOR PATTERNS OF SUSPICIOUSTRADING ACTIVITY ON A FIRM-WIDE BASIS. NONE OF THE FIRM'SSYSTEMS OR INTERNAL CONTROLS WAS DESIGNED TO CAPTUREPOTENTIALLY SUSPICIOUS TRADING ACTIVITY AND NO ONE AT THE FIRMWAS TASKED WITH REVIEWING FIRM AND CUSTOMER ACTIVITY AS AWHOLE IN ORDER TO DETECT PATTERNS OF POTENTIALLY SUSPICIOUSACTIVITY.THE FIRM FAILED TO IDENTIFY OR IGNORED RED FLAGS INVOLVINGNUMEROUS INSTANCES OF POTENTIALLY SUSPICIOUS SECURITIESTRANSACTIONS, AND THUS FAILED TO INVESTIGATE AND REPORTSUSPICIOUS SECURITIES TRANSACTIONS, AS APPROPRIATE, ASREQUIRED BY THE BANK SECRECY ACT AND THE IMPLEMENTINGREGULATION THEREUNDER.







Initiated By: FINRA


Other


N/A





FINRA RULES 2010 AND 3310(A) AND NASD RULES 2110 AND 3011(A): FIRMSARE REQUIRED TO ESTABLISH AND IMPLEMENT POLICIES, PROCEDURES,AND INTERNAL CONTROLS THAT CAN REASONABLY BE EXPECTED TODETECT AND CAUSE THE REPORTING OF SUSPICIOUS TRANSACTIONS,INCLUDING SUSPICIOUS SECURITIES TRANSACTIONS, AS REQUIRED BYTHE BANK SECRECY ACT AND THE IMPLEMENTING REGULATIONSTHEREUNDER.THE FIRM FAILED TO ESTABLISH AND IMPLEMENT ANTI-MONEYLAUNDERING (AML) PROGRAM POLICIES, PROCEDURES AND INTERNALCONTROLS THAT WERE REASONABLY EXPECTED TO DETECT AND CAUSETHE REPORTING OF SUSPICIOUS TRANSACTIONS UNDER THE BANKSECRECY ACT. THE FIRM'S SUPERVISION DEPARTMENT WASRESPONSIBLE FOR THE DAILY REVIEW OF CUSTOMER ACCOUNT ACTIVITY,PRIMARILY THROUGH THE REVIEW OF CONSOLIDATED TRADE BLOTTERSPROVIDED BY A THIRD-PARTY BOOKS AND RECORDS SYSTEM. EACHREVIEWER ONLY RECEIVED THE TRADE BLOTTERS FOR THE TRADINGACTIVITY FOR WHICH HE OR SHE WAS RESPONSIBLE. NO ONE AT THEFIRM REVIEWED THE TRADING ACTIVITY FOR PATTERNS OF SUSPICIOUSTRADING ACTIVITY ON A FIRM-WIDE BASIS. NONE OF THE FIRM'SSYSTEMS OR INTERNAL CONTROLS WAS DESIGNED TO CAPTUREPOTENTIALLY SUSPICIOUS TRADING ACTIVITY AND NO ONE AT THE FIRMWAS TASKED WITH REVIEWING FIRM AND CUSTOMER ACTIVITY AS AWHOLE IN ORDER TO DETECT PATTERNS OF POTENTIALLY SUSPICIOUSACTIVITY.THE FIRM FAILED TO IDENTIFY OR IGNORED RED FLAGS INVOLVINGNUMEROUS INSTANCES OF POTENTIALLY SUSPICIOUS SECURITIESTRANSACTIONS, AND THUS FAILED TO INVESTIGATE AND REPORTSUSPICIOUS SECURITIES TRANSACTIONS, AS APPROPRIATE, ASREQUIRED BY THE BANK SECRECY ACT AND THE IMPLEMENTINGREGULATION THEREUNDER.


Resolution:


No








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 $65,000, AND REQUIRED TOCERTIFY WITHIN 60 DAYS OF ACCEPTANCE OF THE EFFECTIVE DATE OFTHIS AWC, THAT THE FIRM IS IN COMPLIANCE WITH FINRA RULE 3310 BYESTABLISHING AND IMPLEMENTING AML POLICIES, PROCEDURES, ANDINTERNAL CONTROLS WITH RESPECT TO ITS MONITORING FORSUSPICIOUS TRANSACTIONS THAT ARE REASONABLY DESIGNED TOACHIEVE COMPLIANCE WITH THE REQUIREMENTS OF THE BANKSECRECY ACT AND THE TREASURY'S IMPLEMENTING REGULATIONS.FINE PAID IN FULL ON DECEMBER 8, 2015.



Allegations: FINRA RULES 2010 AND 3310(A) AND NASD RULES 2110 AND 3011(A): FIRMSARE REQUIRED TO ESTABLISH AND IMPLEMENT POLICIES, PROCEDURES,AND INTERNAL CONTROLS THAT CAN REASONABLY BE EXPECTED TODETECT AND CAUSE THE REPORTING OF SUSPICIOUS TRANSACTIONS,INCLUDING SUSPICIOUS SECURITIES TRANSACTIONS, AS REQUIRED BYTHE BANK SECRECY ACT AND THE IMPLEMENTING REGULATIONSTHEREUNDER. THE FIRM FAILED TO ESTABLISH AND IMPLEMENT ANTI-MONEY LAUNDERING (AML) PROGRAM POLICIES, PROCEDURES ANDINTERNAL CONTROLS THAT WERE REASONABLY EXPECTED TO DETECTAND CAUSE THE REPORTING OF SUSPICIOUS TRANSACTIONS UNDER THEBANK SECRECY ACT. THE FIRM'S SUPERVISION DEPARTMENT WASRESPONSIBLE FOR THE DAILY REVIEW OF CUSTOMER ACCOUNT ACTIVITY,PRIMARILY THROUGH THE REVIEW OF CONSOLIDATED TRADE BLOTTERSPROVIDED BY A THIRD-PARTY BOOKS AND RECORDS SYSTEM. EACHREVIEWER ONLY RECEIVED THE TRADE BLOTTERS FOR THE TRADINGACTIVITY FOR WHICH HE OR SHE WAS RESPONSIBLE. NO ONE AT THEFIRM REVIEWED THE TRADING ACTIVITY FOR PATTERNS OF SUSPICIOUSTRADING ACTIVITY ON A FIRM-WIDE BASIS. NONE OF THE FIRM'SSYSTEMS OR INTERNAL CONTROLS WAS DESIGNED TO CAPTUREPOTENTIALLY SUSPICIOUS TRADING ACTIVITY AND NO ONE AT THE FIRMWAS TASKED WITH REVIEWING FIRM AND CUSTOMER ACTIVITY AS AWHOLE IN ORDER TO DETECT PATTERNS OF POTENTIALLY SUSPICIOUSACTIVITY. THE FIRM FAILED TO IDENTIFY OR IGNORED RED FLAGSINVOLVING NUMEROUS INSTANCES OF POTENTIALLY SUSPICIOUSSECURITIES TRANSACTIONS, AND THUS FAILED TO INVESTIGATE ANDREPORT SUSPICIOUS SECURITIES TRANSACTIONS, AS APPROPRIATE, ASREQUIRED BY THE BANK SECRECY ACT AND THE IMPLEMENTINGREGULATION THEREUNDER.







Initiated By: FINRA


Other






FINRA RULES 2010 AND 3310(A) AND NASD RULES 2110 AND 3011(A): FIRMSARE REQUIRED TO ESTABLISH AND IMPLEMENT POLICIES, PROCEDURES,AND INTERNAL CONTROLS THAT CAN REASONABLY BE EXPECTED TODETECT AND CAUSE THE REPORTING OF SUSPICIOUS TRANSACTIONS,INCLUDING SUSPICIOUS SECURITIES TRANSACTIONS, AS REQUIRED BYTHE BANK SECRECY ACT AND THE IMPLEMENTING REGULATIONSTHEREUNDER. THE FIRM FAILED TO ESTABLISH AND IMPLEMENT ANTI-MONEY LAUNDERING (AML) PROGRAM POLICIES, PROCEDURES ANDINTERNAL CONTROLS THAT WERE REASONABLY EXPECTED TO DETECTAND CAUSE THE REPORTING OF SUSPICIOUS TRANSACTIONS UNDER THEBANK SECRECY ACT. THE FIRM'S SUPERVISION DEPARTMENT WASRESPONSIBLE FOR THE DAILY REVIEW OF CUSTOMER ACCOUNT ACTIVITY,PRIMARILY THROUGH THE REVIEW OF CONSOLIDATED TRADE BLOTTERSPROVIDED BY A THIRD-PARTY BOOKS AND RECORDS SYSTEM. EACHREVIEWER ONLY RECEIVED THE TRADE BLOTTERS FOR THE TRADINGACTIVITY FOR WHICH HE OR SHE WAS RESPONSIBLE. NO ONE AT THEFIRM REVIEWED THE TRADING ACTIVITY FOR PATTERNS OF SUSPICIOUSTRADING ACTIVITY ON A FIRM-WIDE BASIS. NONE OF THE FIRM'SSYSTEMS OR INTERNAL CONTROLS WAS DESIGNED TO CAPTUREPOTENTIALLY SUSPICIOUS TRADING ACTIVITY AND NO ONE AT THE FIRMWAS TASKED WITH REVIEWING FIRM AND CUSTOMER ACTIVITY AS AWHOLE IN ORDER TO DETECT PATTERNS OF POTENTIALLY SUSPICIOUSACTIVITY. THE FIRM FAILED TO IDENTIFY OR IGNORED RED FLAGSINVOLVING NUMEROUS INSTANCES OF POTENTIALLY SUSPICIOUSSECURITIES TRANSACTIONS, AND THUS FAILED TO INVESTIGATE ANDREPORT SUSPICIOUS SECURITIES TRANSACTIONS, AS APPROPRIATE, ASREQUIRED BY THE BANK SECRECY ACT AND THE IMPLEMENTINGREGULATION THEREUNDER.


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 $65,000, AND REQUIRED TOCERTIFY WITHIN 60 DAYS OF ACCEPTANCE OF THE EFFECTIVE DATE OFTHIS AWC, THAT THE FIRM IS IN COMPLIANCE WITH FINRA RULE 3310 BYESTABLISHING AND IMPLEMENTING AML POLICIES, PROCEDURES, ANDINTERNAL CONTROLS WITH RESPECT TO ITS MONITORING FORSUSPICIOUS TRANSACTIONS THAT ARE REASONABLY DESIGNED TOACHIEVE COMPLIANCE WITH THE REQUIREMENTS OF THE BANKSECRECY ACT AND THE TREASURY'S IMPLEMENTING REGULATIONS.



Disclosure 12 of 62

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Allegations: FINRA RULES 2010, 6730(A) - NATIONAL SECURITIES CORPORATION FAILEDTO REPORT TO THE TRADE REPORTING AND COMPLIANCE ENGINE(TRACE) S1 TRANSACTIONS IN TRACE-ELIGIBLE AGENCY DEBTSECURITIES WITHIN 15 MINUTES OF THE TIME OF EXECUTION. THISCONDUCT CONSTITUTES SEPARATE AND DISTINCT VIOLATIONS OF FINRARULE 6730(A) AND A PATTERN OR PRACTICE OF LATE REPORTINGWITHOUT EXCEPTIONAL CIRCUMSTANCES IN VIOLATION OF FINRA RULE2010.







Initiated By: FINRA






Other Product Type(s): TRACE-ELIGIBLE AGENCY DEBT SECURITIES

FINRA RULES 2010, 6730(A) - NATIONAL SECURITIES CORPORATION FAILEDTO REPORT TO THE TRADE REPORTING AND COMPLIANCE ENGINE(TRACE) S1 TRANSACTIONS IN TRACE-ELIGIBLE AGENCY DEBTSECURITIES WITHIN 15 MINUTES OF THE TIME OF EXECUTION. THISCONDUCT CONSTITUTES SEPARATE AND DISTINCT VIOLATIONS OF FINRARULE 6730(A) AND A PATTERN OR PRACTICE OF LATE REPORTINGWITHOUT EXCEPTIONAL CIRCUMSTANCES IN VIOLATION OF FINRA RULE2010.


Resolution:


Sanction Details: WITHOUT ADMITTING OR DENYING THE FINDINGS, THE FIRM CONSENTEDTO THE DESCRIBED SANCTION AND TO THE ENTRY OF FINDINGS;THEREFORE, THE FIRM IS FINED $5,000. FINE PAID IN FULL ON JULY 24,2012.


No




Allegations: FINRA RULES 2010, 6730(A) - NATIONAL SECURITIES CORPORATION FAILEDTO REPORT TO THE TRADE REPORTING AND COMPLIANCE ENGINE(TRACE) S1 TRANSACTIONS IN TRACE-ELIGIBLE AGENCY DEBTSECURITIES WITHIN 15 MINUTES OF THE TIME OF EXECUTION. THISCONDUCT CONSTITUTES SEPARATE AND DISTINCT VIOLATIONS OF FINRARULE 6730(A) AND A PATTERN OR PRACTICE OF LATE REPORTINGWITHOUT EXCEPTIONAL CIRCUMSTANCES IN VIOLATION OF FINRA RULE2010.







Initiated By: FINRA






Other Product Type(s): TRACE-ELIGIBLE AGENCY DEBT SECURITIES

FINRA RULES 2010, 6730(A) - NATIONAL SECURITIES CORPORATION FAILEDTO REPORT TO THE TRADE REPORTING AND COMPLIANCE ENGINE(TRACE) S1 TRANSACTIONS IN TRACE-ELIGIBLE AGENCY DEBTSECURITIES WITHIN 15 MINUTES OF THE TIME OF EXECUTION. THISCONDUCT CONSTITUTES SEPARATE AND DISTINCT VIOLATIONS OF FINRARULE 6730(A) AND A PATTERN OR PRACTICE OF LATE REPORTINGWITHOUT EXCEPTIONAL CIRCUMSTANCES IN VIOLATION OF FINRA RULE2010.


Resolution:


Sanction Details: WITHOUT ADMITTING OR DENYING THE FINDINGS,THE FIRM CONSENTEDTO THE DESCRIBED SANCTION AND TO THE ENTRY OFFINDINGS;THEREFORE, THE FIRM IS FINED $5000.



Disclosure 13 of 62

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Allegations: FINRA RULE 7450(A), NASD RULE 6955(A) - NATIONAL SECURITIESCORPORATION FAILED TO TIMELY REPORT REPORTABLE ORDER EVENTS(ROES) TO THE ORDER AUDIT TRAIL SYSTEM (OATS); TRANSMITTEDROUTE OR COMBINED ORDER/ROUTE REPORTS TO OATS THAT OATS WASUNABLE TO LINK TO THE RELATED ORDER ROUTED TO NASDAQ DUE TOINACCURATE, INCOMPLETE OR IMPROPERLY FORMATTED DATA;TRANSMITTED NEW ORDER REPORTS TO OATS AND RELATEDSUBSEQUENT REPORTS WHERE THE TIMESTAMP FOR THE RELATEDSUBSEQUENT REPORT OCCURRED PRIOR TO THE RECEIPT OF THEORDER; AND TRANSMITTED EXECUTION OR COMBINEDORDER/EXECUTION REPORTS TO OATS THAT CONTAINED INACCURATE,INCOMPLETE OR IMPROPERLY FORMATTED DATA. THE FIRMTRANSMITTED ROUTE OR COMBINED ORDER/ROUTE REPORTS TO OATSTHAT OATS WAS UNABLE TO LINK TO THE CORRESPONDING NEW ORDERTRANSMITTED BY THE DESTINATION MEMBER FIRM DUE TO INACCURATE,INCOMPLETE OR IMPROPERLY FORMATTED DATA.







Initiated By: FINRA







FINRA RULE 7450(A), NASD RULE 6955(A) - NATIONAL SECURITIESCORPORATION FAILED TO TIMELY REPORT REPORTABLE ORDER EVENTS(ROES) TO THE ORDER AUDIT TRAIL SYSTEM (OATS); TRANSMITTEDROUTE OR COMBINED ORDER/ROUTE REPORTS TO OATS THAT OATS WASUNABLE TO LINK TO THE RELATED ORDER ROUTED TO NASDAQ DUE TOINACCURATE, INCOMPLETE OR IMPROPERLY FORMATTED DATA;TRANSMITTED NEW ORDER REPORTS TO OATS AND RELATEDSUBSEQUENT REPORTS WHERE THE TIMESTAMP FOR THE RELATEDSUBSEQUENT REPORT OCCURRED PRIOR TO THE RECEIPT OF THEORDER; AND TRANSMITTED EXECUTION OR COMBINEDORDER/EXECUTION REPORTS TO OATS THAT CONTAINED INACCURATE,INCOMPLETE OR IMPROPERLY FORMATTED DATA. THE FIRMTRANSMITTED ROUTE OR COMBINED ORDER/ROUTE REPORTS TO OATSTHAT OATS WAS UNABLE TO LINK TO THE CORRESPONDING NEW ORDERTRANSMITTED BY THE DESTINATION MEMBER FIRM DUE TO INACCURATE,INCOMPLETE OR IMPROPERLY FORMATTED DATA.


Resolution:


Sanction Details: WITHOUT ADMITTING OR DENYING THE FINDINGS, THE FIRM CONSENTEDTO THE DESCRIBED SANCTION AND TO THE ENTRY OF FINDINGS;THEREFORE, THE FIRM IS FINED $5,000. FINE PAID IN FULL ON MAY 25,2012.


No




Allegations: FINRA RULE 7450(A), NASD RULE 6955(A) - NATIONAL SECURITIESCORPORATION FAILED TO TIMELY REPORT REPORTABLE ORDER EVENTS(ROES) TO THE ORDER AUDIT TRAIL SYSTEM (OATS); TRANSMITTEDROUTE OR COMBINED ORDER/ROUTE REPORTS TO OATS THAT OATS WASUNABLE TO LINK TO THE RELATED ORDER ROUTED TO NASDAQ DUE TOINACCURATE, INCOMPLETE OR IMPROPERLY FORMATTED DATA;TRANSMITTED NEW ORDER REPORTS TO OATS AND RELATEDSUBSEQUENT REPORTS WHERE THE TIMESTAMP FOR THE RELATEDSUBSEQUENT REPORT OCCURRED PRIOR TO THE RECEIPT OF THEORDER; AND TRANSMITTED EXECUTION OR COMBINEDORDER/EXECUTION REPORTS TO OATS THAT CONTAINED INACCURATE,INCOMPLETE OR IMPROPERLY FORMATTED DATA. THE FIRMTRANSMITTED ROUTE OR COMBINED ORDER/ROUTE REPORTS TO OATSTHAT OATS WAS UNABLE TO LINK TO THE CORRESPONDING NEW ORDERTRANSMITTED BY THE DESTINATION MEMBER FIRM DUE TO INACCURATE,INCOMPLETE OR IMPROPERLY FORMATTED DATA.







Initiated By: FINRA







FINRA RULE 7450(A), NASD RULE 6955(A) - NATIONAL SECURITIESCORPORATION FAILED TO TIMELY REPORT REPORTABLE ORDER EVENTS(ROES) TO THE ORDER AUDIT TRAIL SYSTEM (OATS); TRANSMITTEDROUTE OR COMBINED ORDER/ROUTE REPORTS TO OATS THAT OATS WASUNABLE TO LINK TO THE RELATED ORDER ROUTED TO NASDAQ DUE TOINACCURATE, INCOMPLETE OR IMPROPERLY FORMATTED DATA;TRANSMITTED NEW ORDER REPORTS TO OATS AND RELATEDSUBSEQUENT REPORTS WHERE THE TIMESTAMP FOR THE RELATEDSUBSEQUENT REPORT OCCURRED PRIOR TO THE RECEIPT OF THEORDER; AND TRANSMITTED EXECUTION OR COMBINEDORDER/EXECUTION REPORTS TO OATS THAT CONTAINED INACCURATE,INCOMPLETE OR IMPROPERLY FORMATTED DATA. THE FIRMTRANSMITTED ROUTE OR COMBINED ORDER/ROUTE REPORTS TO OATSTHAT OATS WAS UNABLE TO LINK TO THE CORRESPONDING NEW ORDERTRANSMITTED BY THE DESTINATION MEMBER FIRM DUE TO INACCURATE,INCOMPLETE OR IMPROPERLY FORMATTED DATA.


Resolution:


Sanction Details: WITHOUT ADMITTING OR DENYING THE FINDINGS, THE FIRM CONSENTEDTO THE DESCRIBED SANCTION AND TO THE ENTRY OF FINDINGS;THEREFORE, THE FIRM IS FINED $5,000.

Firm Statement WITHOUT ADMITTING OR DENYING THE FINDINGS, THE FIRM CONSENTEDTO THE DESCRIBED SANCTION AND TO THE ENTRY OF FINDINGS;THEREFORE, THE FIRM IS FINED $5,000.



Disclosure 14 of 62

i


Allegations: SEC RULE 606 OF REGULATION NMS, FINRA RULES 2010,6182, 6380A, 6622,6730(A), 7230A, 7450, NASD RULES 2110, 2111(A), 2320, 3010, 6955(A), MSRBRULE G-14 - NATIONAL SECURITIES CORPORATION TRANSMITTEDREPORTABLE ORDER EVENTS (ROES) TO THE ORDER AUDIT TRAILSYSTEM (OATS) THAT WERE REJECTED BY OATS FOR CONTEXT ORSYNTAX ERRORS AND WERE REPAIRABLE BUT THE FIRM FAILED TOREPAIR ANY OF THE REJECTED ROES SO THAT THEY WERE NEVERTRANSMITTED TO OATS. THE FIRM FAILED TO EXECUTE ORDERS FULLYAND PROMPTLY. IN TRANSACTIONS FOR OR WITH A CUSTOMER, THE FIRMFAILED TO USE REASONABLE DILIGENCE TO ASCERTAIN THE BEST INTER-DEALER MARKET AND FAILED TO BUY OR SELL IN SUCH MARKET SO THATTHE RESULTANT PRICE TO ITS CUSTOMER WAS AS FAVORABLE ASPOSSIBLE UNDER PREVAILING MARKET CONDITIONS. IN REPORTABLESECURITIES TRANSACTIONS, THE FIRM FAILED TO REPORT TO THEFINRA/NASDAQ TRADE REPORTING FACILITY (FNTRF) THE CORRECTSYMBOL INDICATING ITS CAPACITY; IN NUMEROUS TRANSACTIONS, ITINCORRECTLY REPORTED ITS CAPACITY AS "AGENT" FOR THE PRINCIPALLEG OF A "RISKLESS PRINCIPAL" TRANSACTION; IN ONE INSTANCE, ITINCORRECTLY REPORTED A "RISKLESS PRINCIPAL" TRANSACTION AS AN "AGENCY CROSS;" IN TWO INSTANCES, IT INCORRECTLY REPORTED THESECOND LEG OF A "RISKLESS PRINCIPAL" TRANSACTION AS "PRINCIPAL;"AND IN ONE INSTANCE, THE FIRM REPORTED A "PRINCIPAL" TRANSACTIONAS AN "AGENCY CROSS." THE FIRM FAILED TO REPORT TO THE FNTRF THECORRECT SYMBOL INDICATING WHETHER THE TRANSACTION WAS A SELLOR SELL SHORT IN LAST SALE REPORTS OF TRANSACTIONS INDESIGNATED SECURITIES. THE FIRM FAILED TO REPORT ODD LOTTRANSACTIONS AS "TAPE ELIGIBLE" TO THE FNTRF. THE FIRMINCORRECTLY REPORTED PRINCIPAL TRANSACTIONS AS "AGENT" TO THEOTC TRADE REPORTING FACILITY. THE FIRM TRANSMITTED REPORTS TOOATS IN WHICH IT UNNECESSARILY SUBMITTED "RT" REPORTS FORORDERS EXECUTED ON A RISKLESS PRINCIPAL BASIS; IN ONE INSTANCE,THE FIRM FAILED TO APPEND THE "AON" SPECIAL HANDLING CODE ONTHE OATS REPORT. THE FIRM FAILED TO DISCLOSE TO ITS CUSTOMERSTHE AVAILABILITY UPON REQUEST OF WRITTEN COPIES OF ORDERROUTING REPORTS WHICH DISCLOSE THE IDENTITY OF THE VENUE TOWHICH THE CUSTOMER ORDERS WERE ROUTED FOR EXECUTION IN THESIX MONTHS PRIOR TO THE REQUEST, WHETHER THE ORDERS WEREDIRECTED ORDERS OR NON-DIRECTED ORDERS, AND THE TIME OF THETRANSACTIONS, IF ANY, THAT RESULTED FROM SUCH ORDERS. THEFIRM'S SUPERVISORY SYSTEM DID NOT PROVIDE FOR SUPERVISIONREASONABLY DESIGNED TO ACHIEVE COMPLIANCE WITH APPLICABLESECURITIES LAWS, REGULATIONS AND/OR NASD RULES ADDRESSINGQUALITY OF MARKET TOPICS. THE FIRM'S WRITTEN SUPERVISORYPROCEDURES FAILED TO PROVIDE FOR MINIMUM REQUIREMENTS FORADEQUATE WRITTEN SUPERVISORY PROCEDURES IN THE 1% RULE;TRADE REPORTING (THIRD PARTY TRADE REPORTING); SALESTRANSACTIONS (LOCATE REQUIREMENTS); SEC RULE 204T; NAKEDSHORT SELLING-SEC RULE 10B-21; OTHER TRADING RULES (TRADINGHALTS, CLEARLY ERRONEOUS TRADE FILINGS); AND OTHER RULES(BOOKS AND RECORDS). THE FIRM FAILED TO REPORT INFORMATIONREGARDING PURCHASE AND SALE TRANSACTIONS EFFECTED INMUNICIPAL SECURITIES TO THE REAL-TIME TRANSACTION REPORTINGSYSTEM (RTRS) IN THE MANNER PRESCRIBED BY RULE G-14 RTRSPROCEDURES AND THE RTRS USERS MANUAL; THE FIRM FAILED TOREPORT INFORMATION ABOUT SUCH TRANSACTIONS WITHIN 15 MINUTESOF TRADE TIME TO AN RTRS PORTAL. THE FIRM FAILED TO REPORT TOTHE TRADE REPORTING AND COMPLIANCE ENGINE (TRACE)TRANSACTIONS IN TRACE-ELIGIBLE SECURITIES WITHIN 15 MINUTES OFEXECUTION TIME. THIS CONDUCT CONSTITUTES SEPARATE AND DISTINCTVIOLATIONS OF FINRA RULE 6730(A) AND A PATTERN OR PRACTICE OFLATE REPORTING WITHOUT EXCEPTIONAL CIRCUMSTANCES IN VIOLATIONOF FINRA RULE 2010. THE FIRM FAILED TO MAKE PUBLICLY AVAILABLE AREPORT ON ITS ROUTING OF NON-DIRECTED ORDERS IN COVEREDSECURITIES DURING A CALENDAR QUARTER WITHIN ONE MONTH AFTERTHE END OF THE QUARTER ADDRESSED IN THE REPORT.







SEC RULE 606 OF REGULATION NMS, FINRA RULES 2010,6182, 6380A, 6622,6730(A), 7230A, 7450, NASD RULES 2110, 2111(A), 2320, 3010, 6955(A), MSRBRULE G-14 - NATIONAL SECURITIES CORPORATION TRANSMITTEDREPORTABLE ORDER EVENTS (ROES) TO THE ORDER AUDIT TRAILSYSTEM (OATS) THAT WERE REJECTED BY OATS FOR CONTEXT ORSYNTAX ERRORS AND WERE REPAIRABLE BUT THE FIRM FAILED TOREPAIR ANY OF THE REJECTED ROES SO THAT THEY WERE NEVERTRANSMITTED TO OATS. THE FIRM FAILED TO EXECUTE ORDERS FULLYAND PROMPTLY. IN TRANSACTIONS FOR OR WITH A CUSTOMER, THE FIRMFAILED TO USE REASONABLE DILIGENCE TO ASCERTAIN THE BEST INTER-DEALER MARKET AND FAILED TO BUY OR SELL IN SUCH MARKET SO THATTHE RESULTANT PRICE TO ITS CUSTOMER WAS AS FAVORABLE ASPOSSIBLE UNDER PREVAILING MARKET CONDITIONS. IN REPORTABLESECURITIES TRANSACTIONS, THE FIRM FAILED TO REPORT TO THEFINRA/NASDAQ TRADE REPORTING FACILITY (FNTRF) THE CORRECTSYMBOL INDICATING ITS CAPACITY; IN NUMEROUS TRANSACTIONS, ITINCORRECTLY REPORTED ITS CAPACITY AS "AGENT" FOR THE PRINCIPALLEG OF A "RISKLESS PRINCIPAL" TRANSACTION; IN ONE INSTANCE, ITINCORRECTLY REPORTED A "RISKLESS PRINCIPAL" TRANSACTION AS AN "AGENCY CROSS;" IN TWO INSTANCES, IT INCORRECTLY REPORTED THESECOND LEG OF A "RISKLESS PRINCIPAL" TRANSACTION AS "PRINCIPAL;"AND IN ONE INSTANCE, THE FIRM REPORTED A "PRINCIPAL" TRANSACTIONAS AN "AGENCY CROSS." THE FIRM FAILED TO REPORT TO THE FNTRF THECORRECT SYMBOL INDICATING WHETHER THE TRANSACTION WAS A SELLOR SELL SHORT IN LAST SALE REPORTS OF TRANSACTIONS INDESIGNATED SECURITIES. THE FIRM FAILED TO REPORT ODD LOTTRANSACTIONS AS "TAPE ELIGIBLE" TO THE FNTRF. THE FIRMINCORRECTLY REPORTED PRINCIPAL TRANSACTIONS AS "AGENT" TO THEOTC TRADE REPORTING FACILITY. THE FIRM TRANSMITTED REPORTS TOOATS IN WHICH IT UNNECESSARILY SUBMITTED "RT" REPORTS FORORDERS EXECUTED ON A RISKLESS PRINCIPAL BASIS; IN ONE INSTANCE,THE FIRM FAILED TO APPEND THE "AON" SPECIAL HANDLING CODE ONTHE OATS REPORT. THE FIRM FAILED TO DISCLOSE TO ITS CUSTOMERSTHE AVAILABILITY UPON REQUEST OF WRITTEN COPIES OF ORDERROUTING REPORTS WHICH DISCLOSE THE IDENTITY OF THE VENUE TOWHICH THE CUSTOMER ORDERS WERE ROUTED FOR EXECUTION IN THESIX MONTHS PRIOR TO THE REQUEST, WHETHER THE ORDERS WEREDIRECTED ORDERS OR NON-DIRECTED ORDERS, AND THE TIME OF THETRANSACTIONS, IF ANY, THAT RESULTED FROM SUCH ORDERS. THEFIRM'S SUPERVISORY SYSTEM DID NOT PROVIDE FOR SUPERVISIONREASONABLY DESIGNED TO ACHIEVE COMPLIANCE WITH APPLICABLESECURITIES LAWS, REGULATIONS AND/OR NASD RULES ADDRESSINGQUALITY OF MARKET TOPICS. THE FIRM'S WRITTEN SUPERVISORYPROCEDURES FAILED TO PROVIDE FOR MINIMUM REQUIREMENTS FORADEQUATE WRITTEN SUPERVISORY PROCEDURES IN THE 1% RULE;TRADE REPORTING (THIRD PARTY TRADE REPORTING); SALESTRANSACTIONS (LOCATE REQUIREMENTS); SEC RULE 204T; NAKEDSHORT SELLING-SEC RULE 10B-21; OTHER TRADING RULES (TRADINGHALTS, CLEARLY ERRONEOUS TRADE FILINGS); AND OTHER RULES(BOOKS AND RECORDS). THE FIRM FAILED TO REPORT INFORMATIONREGARDING PURCHASE AND SALE TRANSACTIONS EFFECTED INMUNICIPAL SECURITIES TO THE REAL-TIME TRANSACTION REPORTINGSYSTEM (RTRS) IN THE MANNER PRESCRIBED BY RULE G-14 RTRSPROCEDURES AND THE RTRS USERS MANUAL; THE FIRM FAILED TOREPORT INFORMATION ABOUT SUCH TRANSACTIONS WITHIN 15 MINUTESOF TRADE TIME TO AN RTRS PORTAL. THE FIRM FAILED TO REPORT TOTHE TRADE REPORTING AND COMPLIANCE ENGINE (TRACE)TRANSACTIONS IN TRACE-ELIGIBLE SECURITIES WITHIN 15 MINUTES OFEXECUTION TIME. THIS CONDUCT CONSTITUTES SEPARATE AND DISTINCTVIOLATIONS OF FINRA RULE 6730(A) AND A PATTERN OR PRACTICE OFLATE REPORTING WITHOUT EXCEPTIONAL CIRCUMSTANCES IN VIOLATIONOF FINRA RULE 2010. THE FIRM FAILED TO MAKE PUBLICLY AVAILABLE AREPORT ON ITS ROUTING OF NON-DIRECTED ORDERS IN COVEREDSECURITIES DURING A CALENDAR QUARTER WITHIN ONE MONTH AFTERTHE END OF THE QUARTER ADDRESSED IN THE REPORT.






Initiated By: FINRA





Principal Product Type: Debt - Municipal

Other Product Type(s): REPORTABLE SECURITIES, DESIGNATED SECURITIES, COVEREDSECURITIES, TRACE-ELIGIBLE SECURITIES



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 $82,500, OF WHICH $7,500 ISFOR VIOLATION OF MSRB RULE G-14, AND ORDERED TO PAY $1,640.15,PLUS INTEREST, IN RESTITUTION TO CUSTOMERS. A REGISTEREDPRINCIPAL OF THE FIRM SHALL SUBMIT SATISFACTORY PROOF OFPAYMENT OF THE RESTITUTION OR OF REASONABLE AND DOCUMENTEDEFFORTS UNDERTAKEN TO EFFECT RESTITUTION TO FINRA NO LATERTHAN 120 DAYS AFTER ACCEPTANCE OF THIS AWC. ANY UNDISTRIBUTEDRESTITUTION AND INTEREST SHALL BE FORWARDED TO THEAPPROPRIATE ESCHEAT, UNCLAIMED PROPERTY OR ABANDONEDPROPERTY FUND FOR THE STATE IN WHICH THE CUSTOMER LASTRESIDED. FINE PAID IN FULL ON JANUARY 12, 2015.


No








WITHOUT ADMITTING OR DENYING THE FINDINGS, THE FIRM CONSENTEDTO THE DESCRIBED SANCTIONS AND TO THE ENTRY OF FINDINGS;THEREFORE, THE FIRM IS CENSURED, FINED $82,500, OF WHICH $7,500 ISFOR VIOLATION OF MSRB RULE G-14, AND ORDERED TO PAY $1,640.15,PLUS INTEREST, IN RESTITUTION TO CUSTOMERS. A REGISTEREDPRINCIPAL OF THE FIRM SHALL SUBMIT SATISFACTORY PROOF OFPAYMENT OF THE RESTITUTION OR OF REASONABLE AND DOCUMENTEDEFFORTS UNDERTAKEN TO EFFECT RESTITUTION TO FINRA NO LATERTHAN 120 DAYS AFTER ACCEPTANCE OF THIS AWC. ANY UNDISTRIBUTEDRESTITUTION AND INTEREST SHALL BE FORWARDED TO THEAPPROPRIATE ESCHEAT, UNCLAIMED PROPERTY OR ABANDONEDPROPERTY FUND FOR THE STATE IN WHICH THE CUSTOMER LASTRESIDED. FINE PAID IN FULL ON JANUARY 12, 2015.


Allegations: SEC RULE 606 OF REGULATION NMS, FINRA RULES 2010,6182, 6380A, 6622,6730(A), 7230A, 7450, NASD RULES 2110, 2111(A), 2320, 3010, 6955(A), MSRBRULE G-14 - NATIONAL SECURITIES CORPORATION TRANSMITTEDREPORTABLE ORDER EVENTS (ROES) TO THE ORDER AUDIT TRAILSYSTEM (OATS) THAT WERE REJECTED BY OATS FOR CONTEXT ORSYNTAX ERRORS AND WERE REPAIRABLE BUT THE FIRM FAILED TOREPAIR ANY OF THE REJECTED ROES SO THAT THEY WERE NEVERTRANSMITTED TO OATS. THE FIRM FAILED TO EXECUTE ORDERS FULLYAND PROMPTLY. IN TRANSACTIONS FOR OR WITH A CUSTOMER, THE FIRMFAILED TO USE REASONABLE DILIGENCE TO ASCERTAIN THE BEST INTER-DEALER MARKET AND FAILED TO BUY OR SELL IN SUCH MARKET SO THATTHE RESULTANT PRICE TO ITS CUSTOMER WAS AS FAVORABLE ASPOSSIBLE UNDER PREVAILING MARKET CONDITIONS. IN REPORTABLESECURITIES TRANSACTIONS, THE FIRM FAILED TO REPORT TO THEFINRA/NASDAQ TRADE REPORTING FACILITY (FNTRF) THE CORRECTSYMBOL INDICATING ITS CAPACITY; IN NUMEROUS TRANSACTIONS, ITINCORRECTLY REPORTED ITS CAPACITY AS "AGENT" FOR THE PRINCIPALLEG OF A "RISKLESS PRINCIPAL" TRANSACTION; IN ONE INSTANCE, ITINCORRECTLY REPORTED A "RISKLESS PRINCIPAL" TRANSACTION AS AN "AGENCY CROSS;" IN TWO INSTANCES, IT INCORRECTLY REPORTED THESECOND LEG OF A "RISKLESS PRINCIPAL" TRANSACTION AS "PRINCIPAL;"AND IN ONE INSTANCE, THE FIRM REPORTED A "PRINCIPAL" TRANSACTIONAS AN "AGENCY CROSS." THE FIRM FAILED TO REPORT TO THE FNTRF THECORRECT SYMBOL INDICATING WHETHER THE TRANSACTION WAS A SELLOR SELL SHORT IN LAST SALE REPORTS OF TRANSACTIONS INDESIGNATED SECURITIES. THE FIRM FAILED TO REPORT ODD LOTTRANSACTIONS AS "TAPE ELIGIBLE" TO THE FNTRF. THE FIRMINCORRECTLY REPORTED PRINCIPAL TRANSACTIONS AS "AGENT" TO THEOTC TRADE REPORTING FACILITY. THE FIRM TRANSMITTED REPORTS TOOATS IN WHICH IT UNNECESSARILY SUBMITTED "RT" REPORTS FORORDERS EXECUTED ON A RISKLESS PRINCIPAL BASIS; IN ONE INSTANCE,THE FIRM FAILED TO APPEND THE "AON" SPECIAL HANDLING CODE ONTHE OATS REPORT. THE FIRM FAILED TO DISCLOSE TO ITS CUSTOMERSTHE AVAILABILITY UPON REQUEST OF WRITTEN COPIES OF ORDERROUTING REPORTS WHICH DISCLOSE THE IDENTITY OF THE VENUE TOWHICH THE CUSTOMER ORDERS WERE ROUTED FOR EXECUTION IN THESIX MONTHS PRIOR TO THE REQUEST, WHETHER THE ORDERS WEREDIRECTED ORDERS OR NON-DIRECTED ORDERS, AND THE TIME OF THETRANSACTIONS, IF ANY, THAT RESULTED FROM SUCH ORDERS. THEFIRM'S SUPERVISORY SYSTEM DID NOT PROVIDE FOR SUPERVISIONREASONABLY DESIGNED TO ACHIEVE COMPLIANCE WITH APPLICABLESECURITIES LAWS, REGULATIONS AND/OR NASD RULES ADDRESSINGQUALITY OF MARKET TOPICS. THE FIRM'S WRITTEN SUPERVISORYPROCEDURES FAILED TO PROVIDE FOR MINIMUM REQUIREMENTS FORADEQUATE WRITTEN SUPERVISORY PROCEDURES IN THE 1% RULE;TRADE REPORTING (THIRD PARTY TRADE REPORTING); SALESTRANSACTIONS (LOCATE REQUIREMENTS); SEC RULE 204T; NAKEDSHORT SELLING-SEC RULE 10B-21; OTHER TRADING RULES (TRADINGHALTS, CLEARLY ERRONEOUS TRADE FILINGS); AND OTHER RULES(BOOKS AND RECORDS). THE FIRM FAILED TO REPORT INFORMATIONREGARDING PURCHASE AND SALE TRANSACTIONS EFFECTED INMUNICIPAL SECURITIES TO THE REAL-TIME TRANSACTION REPORTINGSYSTEM (RTRS) IN THE MANNER PRESCRIBED BY RULE G-14 RTRSPROCEDURES AND THE RTRS USERS MANUAL; THE FIRM FAILED TOREPORT INFORMATION ABOUT SUCH TRANSACTIONS WITHIN 15 MINUTESOF TRADE TIME TO AN RTRS PORTAL. THE FIRM FAILED TO REPORT TOTHE TRADE REPORTING AND COMPLIANCE ENGINE (TRACE)TRANSACTIONS IN TRACE-ELIGIBLE SECURITIES WITHIN 15 MINUTES OFEXECUTION TIME. THIS CONDUCT CONSTITUTES SEPARATE AND DISTINCTVIOLATIONS OF FINRA RULE 6730(A) AND A PATTERN OR PRACTICE OFLATE REPORTING WITHOUT EXCEPTIONAL CIRCUMSTANCES IN VIOLATIONOF FINRA RULE 2010. THE FIRM FAILED TO MAKE PUBLICLY AVAILABLE AREPORT ON ITS ROUTING OF NON-DIRECTED ORDERS IN COVEREDSECURITIES DURING A CALENDAR QUARTER WITHIN ONE MONTH AFTERTHE END OF THE QUARTER ADDRESSED IN THE REPORT.







Initiated By: FINRA





Other Product Type(s): REPORTABLE SECURITIES, DESIGNATED SECURITIES, COVEREDSECURITIES, TRACE-ELIGIBLE SECURITIES










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 $82,500, OF WHICH $7,500 ISFOR VIOLATION OF MSRB RULE G-14, AND ORDERED TO PAY $1,640.15,PLUS INTEREST, IN RESTITUTION TO CUSTOMERS. A REGISTEREDPRINCIPAL OF THE FIRM SHALL SUBMIT SATISFACTORY PROOF OFPAYMENT OF THE RESTITUTION OR OF REASONABLE AND DOCUMENTEDEFFORTS UNDERTAKEN TO EFFECT RESTITUTION TO FINRA NO LATERTHAN 120 DAYS AFTER ACCEPTANCE OF THIS AWC. ANY UNDISTRIBUTEDRESTITUTION AND INTEREST SHALL BE FORWARDED TO THEAPPROPRIATE ESCHEAT, UNCLAIMED PROPERTY OR ABANDONEDPROPERTY FUND FOR THE STATE IN WHICH THE CUSTOMER LASTRESIDED.



Disclosure 15 of 62

i


Allegations: FINRA RULE 2010, NASD RULES 2110, 2310, 3010: THE FIRM FAILED TOHAVE REASONABLE GROUNDS TO BELIEVE THAT CERTAIN PRIVATEPLACEMENTS OFFERED BY TWO ENTITIES PURSUANT TO REGULATION DWERE SUITABLE FOR ANY CUSTOMER. THE FIRM FAILED TO HAVEREASONABLE GROUNDS FOR ALLOWING THE CONTINUED SALES OF ANOFFERING; WHEN THE FIRM'S DIRECTOR OF ALTERNATIVEINVESTMENT/DIRECTOR OF SYNDICATIONS, AND THEREBY THE FIRM WASON NOTICE OF LATE INTEREST PAYMENTS BY THE ISSUER.NEVERTHELESS, THE FIRM PERMITTED ITS REPRESENTATIVES TOCONTINUE TO SELL THE OFFERING. THE FIRM WAS OR SHOULD HAVEBEEN ALSO AWARE OF LIQUIDITY PROBLEMS AND DELINQUENCIES,WHICH SHOULD HAVE ALERTED THE FIRM THAT THE OFFERING MAY HAVEALSO BEEN SUSCEPTIVE TO DELINQUENCIES OR DEFAULT. THE FIRM DIDNOT A REASONABLE BASIS UPON WHICH TO RECOMMEND THEPURCHASE OF AN ISSUER'S OFFERINGS TO CUSTOMERS. THE DUEDILIGENCE REPORTS FOR THESE OFFERINGS NOTED SIGNIFICANT RISKSAND SPECIFICALLY PROVIDED THAT ITS CONCLUSIONS WERECONDITIONED UPON RECOMMENDATIONS REGARDING GUIDELINES,CHANGES IN THE PPMS, AND HEIGHTENED FINANCIAL DISCLOSURE OFAFFILIATED PARTY ADVANCES. THE FIRM, DID NOT, HOWEVER,INVESTIGATE, FOLLOW UP ON, OR DISCUSS ANY OF THE POTENTIALCONFLICTS OR RISKS WITH EITHER THE ISSUER OR ANY THIRD-PARTY.THE FIRM'S DIRECTOR OF ALTERNATIVE INVESTMENT/DIRECTOR OFSYNDICATIONS, ACTING ON BEHALF OF THE FIRM, FAILED TO CONDUCTADEQUATE DUE DILIGENCE OF THE OFFERINGS BEFORE ALLOWING FIRMREPRESENTATIVES TO SELL THESE SECURITIES. THE FIRM, ACTINGTHROUGH THE DIRECTOR, FAILED TO ENFORCE REASONABLESUPERVISORY PROCEDURES TO DETECT OR ADDRESS POTENTIAL REDFLAGS AS IT RELATES TO THESE OFFERINGS. THE FIRM, ACTINGTHROUGH THE DIRECTOR, FAILED TO MAINTAIN A SUPERVISORY SYSTEMTHAT WAS REASONABLY DESIGNED TO ACHIEVE COMPLIANCE WITHAPPLICABLE SECURITIES LAWS AND REGULATIONS.







Initiated By: FINRA


Other


N/A




Other Product Type(s): PRIVATE PLACEMENT OFFERING, PREFERRED STOCK AND LIMITEDPARTNERSHIP INTERESTS

FINRA RULE 2010, NASD RULES 2110, 2310, 3010: THE FIRM FAILED TOHAVE REASONABLE GROUNDS TO BELIEVE THAT CERTAIN PRIVATEPLACEMENTS OFFERED BY TWO ENTITIES PURSUANT TO REGULATION DWERE SUITABLE FOR ANY CUSTOMER. THE FIRM FAILED TO HAVEREASONABLE GROUNDS FOR ALLOWING THE CONTINUED SALES OF ANOFFERING; WHEN THE FIRM'S DIRECTOR OF ALTERNATIVEINVESTMENT/DIRECTOR OF SYNDICATIONS, AND THEREBY THE FIRM WASON NOTICE OF LATE INTEREST PAYMENTS BY THE ISSUER.NEVERTHELESS, THE FIRM PERMITTED ITS REPRESENTATIVES TOCONTINUE TO SELL THE OFFERING. THE FIRM WAS OR SHOULD HAVEBEEN ALSO AWARE OF LIQUIDITY PROBLEMS AND DELINQUENCIES,WHICH SHOULD HAVE ALERTED THE FIRM THAT THE OFFERING MAY HAVEALSO BEEN SUSCEPTIVE TO DELINQUENCIES OR DEFAULT. THE FIRM DIDNOT A REASONABLE BASIS UPON WHICH TO RECOMMEND THEPURCHASE OF AN ISSUER'S OFFERINGS TO CUSTOMERS. THE DUEDILIGENCE REPORTS FOR THESE OFFERINGS NOTED SIGNIFICANT RISKSAND SPECIFICALLY PROVIDED THAT ITS CONCLUSIONS WERECONDITIONED UPON RECOMMENDATIONS REGARDING GUIDELINES,CHANGES IN THE PPMS, AND HEIGHTENED FINANCIAL DISCLOSURE OFAFFILIATED PARTY ADVANCES. THE FIRM, DID NOT, HOWEVER,INVESTIGATE, FOLLOW UP ON, OR DISCUSS ANY OF THE POTENTIALCONFLICTS OR RISKS WITH EITHER THE ISSUER OR ANY THIRD-PARTY.THE FIRM'S DIRECTOR OF ALTERNATIVE INVESTMENT/DIRECTOR OFSYNDICATIONS, ACTING ON BEHALF OF THE FIRM, FAILED TO CONDUCTADEQUATE DUE DILIGENCE OF THE OFFERINGS BEFORE ALLOWING FIRMREPRESENTATIVES TO SELL THESE SECURITIES. THE FIRM, ACTINGTHROUGH THE DIRECTOR, FAILED TO ENFORCE REASONABLESUPERVISORY PROCEDURES TO DETECT OR ADDRESS POTENTIAL REDFLAGS AS IT RELATES TO THESE OFFERINGS. THE FIRM, ACTINGTHROUGH THE DIRECTOR, FAILED TO MAINTAIN A SUPERVISORY SYSTEMTHAT WAS REASONABLY DESIGNED TO ACHIEVE COMPLIANCE WITHAPPLICABLE SECURITIES LAWS AND REGULATIONS.


Resolution:


No

Sanctions Ordered: CensureDisgorgement/Restitution







Other Sanctions Ordered: UNDERTAKINGS

Sanction Details: WITHOUT ADMITTING OR DENYING THE FINDINGS, THE FIRM CONSENTEDTO THE DESCRIBED SANCTIONS AND TO THE ENTRY OF FINDINGS;THEREFORE, IT IS CENSURED AND ORDERED TO PAY THE TOTAL AMOUNTOF $175,000 IN RESTITUTION TO INVESTORS.FOR THE PURPOSE OF DISTRIBUTING SUCH RESTITUTION, IT SHALL BEPAID TO RECEIVERS, APPOINTED BY THE UNITED STATES DISTRICTCOURTS IN THESE CASES; CIVIL ACTION NO. 3:09-CV-01238-L-BH AND CIVILACTION NO. SA CV09-0818 DOC(RNBX). THE RECEIVERS SHALLDISTRIBUTE SUCH RESTITUTION TO THE INVESTORS IN THE SECURITIESOFFERINGS OF THE ISSUERS ON A PRO RATA BASIS IN ACCORDANCEWITH THE DISTRIBUTION MECHANISM ESTABLISHED BY THE UNITEDSTATES DISTRICT COURTS. IF THE DISTRIBUTION MECHANISM IS NOTESTABLISHED BY SEPTEMBER 30, 2011, THEN THE RECEIVERS SHALLPROPOSE A DISTRIBUTION PLAN FOR FINRA'S APPROVAL.A REGISTERED PRINCIPAL ON BEHALF OF THE FIRM SHALL SUBMITSATISFACTORY PROOF TO FINRA OF PAYMENT OF RESTITUTION OR OFREASONABLE AND DOCUMENTED EFFORTS UNDERTAKEN TO EFFECTRESTITUTION, NO LATER THAN 120 DAYS AFTER ACCEPTANCE OF THISAWC.



Allegations: FINRA RULE 2010, NASD RULES 2110, 2310, 3010: THE FIRM FAILED TOHAVE REASONABLE GROUNDS TO BELIEVE THATCERTAIN PRIVATE PLACEMENTS OFFERED BY TWO ENTITIES PURSUANTTO REGULATION D WERE SUITABLE FOR ANYCUSTOMER. THE FIRM FAILED TO HAVE REASONABLE GROUNDS FORALLOWING THE CONTINUED SALES OF ANOFFERING; WHEN THE FIRM'S DIRECTOR OF ALTERNATIVEINVESTMENT/DIRECTOR OF SYNDICATIONS, AND THEREBYTHE FIRM WAS ON NOTICE OF LATE INTEREST PAYMENTS BY THE ISSUER.NEVERTHELESS, THE FIRM PERMITTED ITSREPRESENTATIVES TO CONTINUE TO SELL THE OFFERING. THE FIRM WASOR SHOULD HAVE BEEN ALSO AWARE OFLIQUIDITY PROBLEMS AND DELINQUENCIES, WHICH SHOULD HAVEALERTED THE FIRM THAT THE OFFERING MAY HAVEALSO BEEN SUSCEPTIVE TO DELINQUENCIES OR DEFAULT. THE FIRM DIDNOT A REASONABLE BASIS UPON WHICH TORECOMMEND THE PURCHASE OF AN ISSUER'S OFFERINGS TOCUSTOMERS. THE DUE DILIGENCE REPORTS FOR THESEOFFERINGS NOTED SIGNIFICANT RISKS AND SPECIFICALLY PROVIDEDTHAT ITS CONCLUSIONS WERE CONDITIONEDUPON RECOMMENDATIONS REGARDING GUIDELINES, CHANGES IN THEPPMS, AND HEIGHTENED FINANCIALDISCLOSURE OF AFFILIATED PARTY ADVANCES. THE FIRM, DID NOT,HOWEVER, INVESTIGATE, FOLLOW UP ON, ORDISCUSS ANY OF THE POTENTIAL CONFLICTS OR RISKS WITH EITHER THEISSUER OR ANY THIRD-PARTY. THE FIRM'SDIRECTOR OF ALTERNATIVE INVESTMENT/DIRECTOR OF SYNDICATIONS,ACTING ON BEHALF OF THE FIRM, FAILED TOCONDUCT ADEQUATE DUE DILIGENCE OF THE OFFERINGS BEFOREALLOWING FIRM REPRESENTATIVES TO SELLTHESE SECURITIES. THE FIRM, ACTING THROUGH THE DIRECTOR, FAILEDTO ENFORCE REASONABLE SUPERVISORYPROCEDURES TO DETECT OR ADDRESS POTENTIAL RED FLAGS AS ITRELATES TO THESE OFFERINGS. THE FIRM,ACTING THROUGH THE DIRECTOR, FAILED TO MAINTAIN A SUPERVISORYSYSTEM THAT WAS REASONABLY DESIGNEDTO ACHIEVE COMPLIANCE WITH APPLICABLE SECURITIES LAWS ANDREGULATIONS.







Initiated By: FINRA


Other


N/A




Other Product Type(s): PRIVATE PLACEMENT OFFERING, PREFERRED STOCK AND LIMITEDPARTNERSHIP INTERESTS

FINRA RULE 2010, NASD RULES 2110, 2310, 3010: THE FIRM FAILED TOHAVE REASONABLE GROUNDS TO BELIEVE THATCERTAIN PRIVATE PLACEMENTS OFFERED BY TWO ENTITIES PURSUANTTO REGULATION D WERE SUITABLE FOR ANYCUSTOMER. THE FIRM FAILED TO HAVE REASONABLE GROUNDS FORALLOWING THE CONTINUED SALES OF ANOFFERING; WHEN THE FIRM'S DIRECTOR OF ALTERNATIVEINVESTMENT/DIRECTOR OF SYNDICATIONS, AND THEREBYTHE FIRM WAS ON NOTICE OF LATE INTEREST PAYMENTS BY THE ISSUER.NEVERTHELESS, THE FIRM PERMITTED ITSREPRESENTATIVES TO CONTINUE TO SELL THE OFFERING. THE FIRM WASOR SHOULD HAVE BEEN ALSO AWARE OFLIQUIDITY PROBLEMS AND DELINQUENCIES, WHICH SHOULD HAVEALERTED THE FIRM THAT THE OFFERING MAY HAVEALSO BEEN SUSCEPTIVE TO DELINQUENCIES OR DEFAULT. THE FIRM DIDNOT A REASONABLE BASIS UPON WHICH TORECOMMEND THE PURCHASE OF AN ISSUER'S OFFERINGS TOCUSTOMERS. THE DUE DILIGENCE REPORTS FOR THESEOFFERINGS NOTED SIGNIFICANT RISKS AND SPECIFICALLY PROVIDEDTHAT ITS CONCLUSIONS WERE CONDITIONEDUPON RECOMMENDATIONS REGARDING GUIDELINES, CHANGES IN THEPPMS, AND HEIGHTENED FINANCIALDISCLOSURE OF AFFILIATED PARTY ADVANCES. THE FIRM, DID NOT,HOWEVER, INVESTIGATE, FOLLOW UP ON, ORDISCUSS ANY OF THE POTENTIAL CONFLICTS OR RISKS WITH EITHER THEISSUER OR ANY THIRD-PARTY. THE FIRM'SDIRECTOR OF ALTERNATIVE INVESTMENT/DIRECTOR OF SYNDICATIONS,ACTING ON BEHALF OF THE FIRM, FAILED TOCONDUCT ADEQUATE DUE DILIGENCE OF THE OFFERINGS BEFOREALLOWING FIRM REPRESENTATIVES TO SELLTHESE SECURITIES. THE FIRM, ACTING THROUGH THE DIRECTOR, FAILEDTO ENFORCE REASONABLE SUPERVISORYPROCEDURES TO DETECT OR ADDRESS POTENTIAL RED FLAGS AS ITRELATES TO THESE OFFERINGS. THE FIRM,ACTING THROUGH THE DIRECTOR, FAILED TO MAINTAIN A SUPERVISORYSYSTEM THAT WAS REASONABLY DESIGNEDTO ACHIEVE COMPLIANCE WITH APPLICABLE SECURITIES LAWS ANDREGULATIONS.


Resolution:


Sanction Details: WITHOUT ADMITTING OR DENYING THE FINDINGS, THE FIRM CONSENTEDTO THE DESCRIBED SANCTIONS AND TOTHE ENTRY OF FINDINGS; THEREFORE, IT IS CENSURED AND ORDEREDTO PAY THE TOTAL AMOUNT OF $175,000 INRESTITUTION TO INVESTORS. FOR THE PURPOSE OF DISTRIBUTING SUCHRESTITUTION, IT SHALL BE PAID TORECEIVERS, APPOINTED BY THE UNITED STATES DISTRICT COURTS INTHESE CASES; CIVIL ACTION NO. 3:09-CV-01238-L-BH AND CIVIL ACTION NO. SA CV09-0818 DOC(RNBX). THE RECEIVERSSHALL DISTRIBUTE SUCH RESTITUTION TOTHE INVESTORS IN THE SECURITIES OFFERINGS OF THE ISSUERS ON APRO RATA BASIS IN ACCORDANCE WITH THEDISTRIBUTION MECHANISM ESTABLISHED BY THE UNITED STATESDISTRICT COURTS. IF THE DISTRIBUTIONMECHANISM IS NOT ESTABLISHED BY SEPTEMBER 30, 2011, THEN THERECEIVERS SHALL PROPOSE A DISTRIBUTIONPLAN FOR FINRA'S APPROVAL. A REGISTERED PRINCIPAL ON BEHALF OFTHE FIRM SHALL SUBMIT SATISFACTORYPROOF TO FINRA OF PAYMENT OF RESTITUTION OR OF REASONABLE ANDDOCUMENTED EFFORTS UNDERTAKEN TOEFFECT RESTITUTION, NO LATER THAN 120 DAYS AFTER ACCEPTANCE OFTHIS AWC.







www.finra.org/brokercheck User GuidanceWITHOUT ADMITTING OR DENYING THE FINDINGS, THE FIRM CONSENTEDTO THE DESCRIBED SANCTIONS AND TOTHE ENTRY OF FINDINGS; THEREFORE, IT IS CENSURED AND ORDEREDTO PAY THE TOTAL AMOUNT OF $175,000 INRESTITUTION TO INVESTORS. FOR THE PURPOSE OF DISTRIBUTING SUCHRESTITUTION, IT SHALL BE PAID TORECEIVERS, APPOINTED BY THE UNITED STATES DISTRICT COURTS INTHESE CASES; CIVIL ACTION NO. 3:09-CV-01238-L-BH AND CIVIL ACTION NO. SA CV09-0818 DOC(RNBX). THE RECEIVERSSHALL DISTRIBUTE SUCH RESTITUTION TOTHE INVESTORS IN THE SECURITIES OFFERINGS OF THE ISSUERS ON APRO RATA BASIS IN ACCORDANCE WITH THEDISTRIBUTION MECHANISM ESTABLISHED BY THE UNITED STATESDISTRICT COURTS. IF THE DISTRIBUTIONMECHANISM IS NOT ESTABLISHED BY SEPTEMBER 30, 2011, THEN THERECEIVERS SHALL PROPOSE A DISTRIBUTIONPLAN FOR FINRA'S APPROVAL. A REGISTERED PRINCIPAL ON BEHALF OFTHE FIRM SHALL SUBMIT SATISFACTORYPROOF TO FINRA OF PAYMENT OF RESTITUTION OR OF REASONABLE ANDDOCUMENTED EFFORTS UNDERTAKEN TOEFFECT RESTITUTION, NO LATER THAN 120 DAYS AFTER ACCEPTANCE OFTHIS AWC.

Firm Statement WITHOUT ADMITTING OR DENYING THE FINDINGS, THE FIRM CONSENTEDTO THE DESCRIBED SANCTIONS AND TOTHE ENTRY OF FINDINGS; THEREFORE, IT IS CENSURED AND ORDEREDTO PAY THE TOTAL AMOUNT OF $175,000 INRESTITUTION TO INVESTORS. FOR THE PURPOSE OF DISTRIBUTING SUCHRESTITUTION, IT SHALL BE PAID TORECEIVERS, APPOINTED BY THE UNITED STATES DISTRICT COURTS INTHESE CASES; CIVIL ACTION NO. 3:09-CV-01238-L-BH AND CIVIL ACTION NO. SA CV09-0818 DOC(RNBX). THE RECEIVERSSHALL DISTRIBUTE SUCH RESTITUTION TOTHE INVESTORS IN THE SECURITIES OFFERINGS OF THE ISSUERS ON APRO RATA BASIS IN ACCORDANCE WITH THEDISTRIBUTION MECHANISM ESTABLISHED BY THE UNITED STATESDISTRICT COURTS. IF THE DISTRIBUTIONMECHANISM IS NOT ESTABLISHED BY SEPTEMBER 30, 2011, THEN THERECEIVERS SHALL PROPOSE A DISTRIBUTIONPLAN FOR FINRA'S APPROVAL. A REGISTERED PRINCIPAL ON BEHALF OFTHE FIRM SHALL SUBMIT SATISFACTORYPROOF TO FINRA OF PAYMENT OF RESTITUTION OR OF REASONABLE ANDDOCUMENTED EFFORTS UNDERTAKEN TOEFFECT RESTITUTION, NO LATER THAN 120 DAYS AFTER ACCEPTANCE OFTHIS AWC.

Disclosure 16 of 62

i







Initiated By: FINRA


Other


N/A





Allegations: FINRA BY-LAWS ARTICLE V, SECTION 2, FINRA BY-LAWS ARTICLE V,SECTION 3, FINRA RULE 2010, NASD RULES 2110, 3070(C): THE FIRMFAILED TO FILE REQUIRED AMENDMENTS TO FORMS U4, FILED LATEFORMS U4 AMENDMENTS, AND FILED INACCURATE FORMS U4. THE FIRMFILED LATE FORM U5 AMENDMENTS, AND FILED INACCURATE FORMS U5.THE FIRM FAILED TO FILE A REPORT OF STATISTICAL AND SUMMARYINFORMATION REGARDING A CUSTOMER COMPLAINT, FAILED TO REPORTSTATISTICAL AND SUMMARY INFORMATION REGARDING CUSTOMERS'COMPLAINTS TO FINRA WITHIN THE REQUIRED TIME, AND FILEDINACCURATE REPORTS OF STATISTICAL AND SUMMARY INFORMATIONREGARDING COMPLAINTS.

AMENDED COMPLAINT FILED DECEMBER 23, 2010: THE FIRM FAILED TOFILE REQUIRED AMENDMENTS TO FORMS U4 OF REGISTEREDREPRESENTATIVES CONCERNING UNSATISFIED JUDGMENTS ANDCOMPLAINTS. THE FIRM FAILED TO TIMELY FILE REQUIRED AMENDMENTSOF PREVIOUSLY FILED FORMS U5 AND FILED INACCURATE FORM U5. THEFIRM FAILED TO TIMELY REPORT STATISTICAL AND SUMMARYINFORMATION TO FINRA, WITHIN THE REQUIRED TIME, REGARDING ACUSTOMER COMPLAINT AGAINST A REGISTERED REPRESENTATIVE.



Resolution:


No


Decision & Order of Offer of Settlement







Sanction Details: WITHOUT ADMITTING OR DENYING THE ALLEGATIONS, THE FIRMCONSENTED TO THE DESCRIBED SANCTIONS AND TO THE ENTRY OFFINDINGS; THEREFORE IT IS CENSURED AND FINED $22,500.



Initiated By: FINRA


Other


N/A





Allegations: FINRA BY-LAWS ARTICLE V, SECTION 2, FINRA BY-LAWS ARTICLE V,SECTION 3, FINRA RULE 2010, NASD RULES 2110, 3070(C): THE FIRMFAILED TO FILE REQUIRED AMENDMENTS TO FORMS U4, FILED LATEFORMS U4 AMENDMENTS, AND FILED INACCURATE FORMS U4. THE FIRMFILED A LATE FORM U5 AMENDMENT, AND FILED INACCURATE FORMS U5.THE FIRM FAILED TO FILE A REPORT OF STATISTICAL AND SUMMARYINFORMATION REGARDING A CUSTOMER COMPLAINT, FAILED TO REPORTSTATISTICAL AND SUMMARY INFORMATION REGARDING CUSTOMERS'COMPLAINTS TO FINRA WITHIN THE REQUIRED TIME, AND FILEDINACCURATE REPORTS OF STATISTICAL AND SUMMARY INFORMATIONREGARDING COMPLAINTS. AMENDED COMPLAINT FILED DECEMBER 23,2010: THE FIRM FAILED TO FILE REQUIRED AMENDMENTS TO FORMS U4OF REGISTERED REPRESENTATIVES CONCERNING UNSATISFIEDJUDGMENTS AND COMPLAINTS. THE FIRM FAILED TO TIMELY FILEREQUIRED AMENDMENTS OF PREVIOUSLY FILED FORMS U5 AND FILEDINACCURATE FORM U5. THE FIRM FAILED TO TIMELY REPORT STATISTICALAND SUMMARY INFORMATION TO FINRA, WITHIN THEREQUIRED TIME, REGARDING A CUSTOMER COMPLAINT AGAINST AREGISTERED REPRESENTATIVE.


Resolution: Decision & Order of Offer of Settlement60©2020 FINRA. All rights reserved. Report about NATIONAL SECURITIES CORPORATION






Resolution:


Sanction Details: WITHOUT ADMITTING OR DENYING THE ALLEGATIONS, THE FIRMCONSENTED TO THE DESCRIBED SANCTIONS AND TO THE ENTRY OFFINDINGS; THEREFORE IT IS CENSURED AND FINED $22,500.

Firm Statement WITHOUT ADMITTING OR DENYING THE ALLEGATIONS, THE FIRMCONSENTED TO THE DESCRIBED SANCTIONS AND TO THE ENTRY OFFINDINGS; THEREFORE IT IS CENSURED AND FINED $22,500.


Decision & Order of Offer of Settlement

Disclosure 17 of 62

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Initiated By: FINRA


Other


N/A





Allegations: NASD RULES 1017, 2110, 3010(A), 3010(B): NATIONAL SECURITIESCORPORATION FAILED TO FILE AN APPLICATION FOR NASD APPROVALFOR MATERIAL CHANGES TO ITS BUSINESS OPERATIONS WHEN THEREWAS AN INCREASE IN THE NUMBER OF OFFICES (REGISTERED ANDUNREGISTERED) MAINTAINED BY THE FIRM. THE FIRM ALSO FAILED TOESTABLISH AND MAINTAIN A SUPERVISORY SYSTEM AND WRITTENSUPERVISORY PROCEDURES. SPECIFICALLY, ITS PROCEDURES DID NOTREQUIRE MONITORING THE NUMBER OF OFFICES MAINTAINED BY THEFIRM IN ORDER TO DETERMINE WHETHER AN APPLICATION FORAPPROVAL OF MATERIAL CHANGES IN ITS BUSINESS OPERATIONS MIGHTBE NECESSARY.


Resolution: Acceptance, Waiver & Consent(AWC)







Resolution:


Sanction Details: WITHOUT ADMITTING OR DENYING THE FINDINGS, NATIONAL SECURITIESCORPORATION CONSENTED TO THE DESCRIBED SANCTIONS AND TO THEENTRY OF FINDINGS; THEREFORE IT IS CENSURED AND FINED $35,000.


No




Initiated By: FINRA







Allegations: NASD RULES 1017, 2110, 3010(A), 3010(B): NATIONAL SECURITIESCORPORATION FAILED TO FILE AN APPLICATION FOR NASD APPROVALFOR MATERIAL CHANGES TO ITS BUSINESS OPERATIONS WHEN THEREWAS AN INCREASE IN THE NUMBER OF OFFICES (REGISTERED ANDUNREGISTERED) MAINTAINED BY THE FIRM. THE FIRM ALSO FAILED TOESTABLISH AND MAINTAIN A SUPERVISORY SYSTEM AND WRITTENSUPERVISORY PROCEDURES. SPECIFICALLY, ITS PROCEDURES DID NOTREQUIRE MONITORING THE NUMBER OF OFFICES MAINTAINED BY THEFIRM IN ORDER TO DETERMINE WHETHER AN APPLICATION FORAPPROVAL OF MATERIAL CHANGES IN ITS BUSINESS OPERATIONS MIGHTBE NECESSARY.









Resolution:


Sanction Details: WITHOUT ADMITTING OR DENYING THE FINDINGS, NATIONAL SECURITIESCORPORATION CONSENTED TO THE DESCRIBED SANCTIONS AND TO THEENTRY OF FINDINGS; THEREFORE IT IS CENSURED AND FINED $35,000.



Disclosure 18 of 62

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Allegations: SEC RULES 10B-10, 17A-3, 17A-4 AND RULE 605 OF REGULATION NMS,NASD RULES 2110, 2440, 3010, 3110, 4632, 6130(D), 6620, 6620(A), 6955(A)AND INTERPRETATIVE MATERIAL-2440: RESPONDENT NATIONALSECURITIES CORPORATION FAILED, WITHIN 90 SECONDS AFTEREXECUTION, TO TRANSMIT TO THE OTCRF LAST SALE REPORTS OFTRANSACTIONS IN OTC EQUITY SECURITIES AND FAILED TO DESIGNATETHE REPORTS AS LATE. THIS CONDUCT CONSTITUTES A PATTERN ORPRACTICE OF LATE REPORTING WITHOUT EXCEPTION CIRCUMSTANCESIN VIOLATION OF NASD RULES 2110 AND 6620(A). THE FIRM SOLD ORBOUGHT CORPORATE BONDS TO OR FROM CUSTOMERS AND FAILED TOSELL OR BUY SUCH BONDS AT A PRICE THAT WAS FAIR, TAKING INTOCONSIDERATION ALL RELEVANT CIRCUMSTANCES, INCLUDING MARKETCONDITIONS WITH RESPECT TO EACH BOND AT THE TIME OF THETRANSACTION, THE EXPENSE INVOLVED AND THAT THE FIRM WASENTITLED TO A PROFIT. THIS CONDUCT CONSTITUTES SEPARATE ANDDISTINCT VIOLATIONS OF NASD RULES 2110, 2440 AND INTERPRETATIVEMATERIAL-2440. THE FIRM FAILED TO TRANSMIT REPORTABLE ORDEREVENTS (ROES) TO OATS. THIS CONDUCT CONSTITUTES SEPARATE ANDDISTINCT VIOLATIONS OF NASD RULE 6955(A). THE FIRM FAILED TO:SHOW THE TERMS AND CONDITIONS ON THE MEMORANDUM OFBROKERAGE ORDERS; PRESERVE FOR A PERIOD OF NOT LESS THANTHREE YEARS, THE FIRST TWO IN AN ACCESSIBLE PLACE, A COMPLETEAND ACCURATE EXECUTION BLOTTER; REPORT TO THE NNTRF THECORRECT SYMBOL INDICATING WHETHER THE TRANSACTION WAS A BUY,SELL, SELL SHORT, OR CROSS FOR REPORTABLE SECURITIES ANDWHETHER IT EXECUTED TRANSACTIONS IN REPORTABLE SECURITIES IN APRINCIPAL OR AGENCY CAPACITY; AND REPORT TO THE NNTRF LAST SALEREPORTS OF TRANSACTIONS IN DESIGNATED SECURITIES, SUBMIT THE "RISKLESS" PORTION OF "RISKLESS" PRINCIPAL TRANSACTIONS INDESIGNATED SECURITIES, AND INCORRECTLY REPORT THE SECOND LEGOF A PRINCIPAL TRANSACTION AS "AGENT" TO THE NNTRF. THISCONDUCT CONSTITUTES SEPARATE AND DISTINCT VIOLATIONS OF SECRULE 17A-3 AND NASD RULES 3110, 4632 AND 6130(D), AND A VIOLATION OFSEC RULE 17A-4 AND NASD RULE 3110. THE FIRM FAILED TO: REPORT TOTHE OTCRF A LAST SALE REPORT OF A TRANSACTION IN OTC EQUITYSECURITIES AND INCORRECTLY REPORT THE SECOND LEG OF "RISKLESS" PRINCIPAL TRANSACTIONS AS "CROSS" TRANSACTIONS TOTHE OTCRF; AND PROVIDE WRITTEN NOTIFICATION DISCLOSING TO ITSCUSTOMER THAT THE TRANSACTION WAS EXECUTED AT AN AVERAGEPRICE. THIS CONDUCT CONSTITUTES SEPARATE AND DISTINCTVIOLATIONS OF SEC RULE 10B-10 AND NASD RULE 6620. THE FIRM'SSUPERVISORY SYSTEM DID NOT PROVIDE FOR SUPERVISIONREASONABLY DESIGNED TO ACHIEVE COMPLIANCE WITH RESPECT TOSECURITIES LAWS AND REGULATIONS AND NASD RULES. THE FIRMFAILED TO MAKE A REPORT ON COVERED ORDERS IN NATIONAL MARKETSYSTEM SECURITIES IT RECEIVED FOR EXECUTION FROM ANY PERSONPUBLICLY AVAILABLE.







Initiated By: FINRA





Principal Product Type: Equity - OTC

Other Product Type(s): REPORTABLE SECURITIES

SEC RULES 10B-10, 17A-3, 17A-4 AND RULE 605 OF REGULATION NMS,NASD RULES 2110, 2440, 3010, 3110, 4632, 6130(D), 6620, 6620(A), 6955(A)AND INTERPRETATIVE MATERIAL-2440: RESPONDENT NATIONALSECURITIES CORPORATION FAILED, WITHIN 90 SECONDS AFTEREXECUTION, TO TRANSMIT TO THE OTCRF LAST SALE REPORTS OFTRANSACTIONS IN OTC EQUITY SECURITIES AND FAILED TO DESIGNATETHE REPORTS AS LATE. THIS CONDUCT CONSTITUTES A PATTERN ORPRACTICE OF LATE REPORTING WITHOUT EXCEPTION CIRCUMSTANCESIN VIOLATION OF NASD RULES 2110 AND 6620(A). THE FIRM SOLD ORBOUGHT CORPORATE BONDS TO OR FROM CUSTOMERS AND FAILED TOSELL OR BUY SUCH BONDS AT A PRICE THAT WAS FAIR, TAKING INTOCONSIDERATION ALL RELEVANT CIRCUMSTANCES, INCLUDING MARKETCONDITIONS WITH RESPECT TO EACH BOND AT THE TIME OF THETRANSACTION, THE EXPENSE INVOLVED AND THAT THE FIRM WASENTITLED TO A PROFIT. THIS CONDUCT CONSTITUTES SEPARATE ANDDISTINCT VIOLATIONS OF NASD RULES 2110, 2440 AND INTERPRETATIVEMATERIAL-2440. THE FIRM FAILED TO TRANSMIT REPORTABLE ORDEREVENTS (ROES) TO OATS. THIS CONDUCT CONSTITUTES SEPARATE ANDDISTINCT VIOLATIONS OF NASD RULE 6955(A). THE FIRM FAILED TO:SHOW THE TERMS AND CONDITIONS ON THE MEMORANDUM OFBROKERAGE ORDERS; PRESERVE FOR A PERIOD OF NOT LESS THANTHREE YEARS, THE FIRST TWO IN AN ACCESSIBLE PLACE, A COMPLETEAND ACCURATE EXECUTION BLOTTER; REPORT TO THE NNTRF THECORRECT SYMBOL INDICATING WHETHER THE TRANSACTION WAS A BUY,SELL, SELL SHORT, OR CROSS FOR REPORTABLE SECURITIES ANDWHETHER IT EXECUTED TRANSACTIONS IN REPORTABLE SECURITIES IN APRINCIPAL OR AGENCY CAPACITY; AND REPORT TO THE NNTRF LAST SALEREPORTS OF TRANSACTIONS IN DESIGNATED SECURITIES, SUBMIT THE "RISKLESS" PORTION OF "RISKLESS" PRINCIPAL TRANSACTIONS INDESIGNATED SECURITIES, AND INCORRECTLY REPORT THE SECOND LEGOF A PRINCIPAL TRANSACTION AS "AGENT" TO THE NNTRF. THISCONDUCT CONSTITUTES SEPARATE AND DISTINCT VIOLATIONS OF SECRULE 17A-3 AND NASD RULES 3110, 4632 AND 6130(D), AND A VIOLATION OFSEC RULE 17A-4 AND NASD RULE 3110. THE FIRM FAILED TO: REPORT TOTHE OTCRF A LAST SALE REPORT OF A TRANSACTION IN OTC EQUITYSECURITIES AND INCORRECTLY REPORT THE SECOND LEG OF "RISKLESS" PRINCIPAL TRANSACTIONS AS "CROSS" TRANSACTIONS TOTHE OTCRF; AND PROVIDE WRITTEN NOTIFICATION DISCLOSING TO ITSCUSTOMER THAT THE TRANSACTION WAS EXECUTED AT AN AVERAGEPRICE. THIS CONDUCT CONSTITUTES SEPARATE AND DISTINCTVIOLATIONS OF SEC RULE 10B-10 AND NASD RULE 6620. THE FIRM'SSUPERVISORY SYSTEM DID NOT PROVIDE FOR SUPERVISIONREASONABLY DESIGNED TO ACHIEVE COMPLIANCE WITH RESPECT TOSECURITIES LAWS AND REGULATIONS AND NASD RULES. THE FIRMFAILED TO MAKE A REPORT ON COVERED ORDERS IN NATIONAL MARKETSYSTEM SECURITIES IT RECEIVED FOR EXECUTION FROM ANY PERSONPUBLICLY AVAILABLE.


Resolution:


No









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 $105,500 AND ORDERED TOPAY TO INVESTORS $15,697.01 IN RESTITUTION PLUS INTEREST FROM THEDATE OF THE VIOLATIVE CONDUCT TO THE DATE THE AWC IS ACCEPTED.A REGISTERED PRINCIPAL OF THE FIRM SHALL SUBMIT TO FINRASATISFACTORY PROOF OF PAYMENT OF THE RESTITUTION, OR OFREASONABLE AND DOCUMENTED EFFORTS UNDERTAKEN TO EFFECTRESTITUTION NO LATER THAN 120 DAYS AFTER ACCEPTANCE OF THEAWC. IF FOR ANY REASON THE FIRM CANNOT LOCATE ANY CUSTOMERAFTER REASONABLE AND DOCUMENTED EFFORTS WITHIN SUCH PERIOD,OR SUCH ADDITIONAL PERIOD AGREED TO BY FINRA STAFF, THE FIRMSHALL FORWARD ANY UNDISTRIBUTED RESTITUTION AND INTEREST TOTHE APPROPRIATE ESCHEAT, UNCLAIMED PROPERTY, OR ABANDONEDPROPERTY FUND FOR THE STATE IN WHICH THE CUSTOMER IS LASTKNOWN TO HAVE RESIDED.



Allegations: SEC RULES 10B-10, 17A-3, 17A-4 AND RULE 605 OF REGULATION NMS,NASD RULES 2110, 2440, 3010, 3110, 4632, 6130(D), 6620, 6620(A), 6955(A)AND INTERPRETATIVE MATERIAL-2440: RESPONDENT NATIONALSECURITIES CORPORATION FAILED, WITHIN 90 SECONDS AFTEREXECUTION, TO TRANSMIT TO THE OTCRF LAST SALE REPORTS OFTRANSACTIONS IN OTC EQUITY SECURITIES AND FAILED TO DESIGNATETHE REPORTS AS LATE. THIS CONDUCT CONSTITUTES A PATTERN ORPRACTICE OF LATE REPORTING WITHOUT EXCEPTION CIRCUMSTANCESIN VIOLATION OF NASD RULES 2110 AND 6620(A). THE FIRM SOLD ORBOUGHT CORPORATE BONDS TO OR FROM CUSTOMERS AND FAILED TOSELL OR BUY SUCH BONDS AT A PRICE THAT WAS FAIR, TAKING INTOCONSIDERATION ALL RELEVANT CIRCUMSTANCES, INCLUDING MARKETCONDITIONS WITH RESPECT TO EACH BOND AT THE TIME OF THETRANSACTION, THE EXPENSE INVOLVED AND THAT THE FIRM WASENTITLED TO A PROFIT. THIS CONDUCT CONSTITUTES SEPARATE ANDDISTINCT VIOLATIONS OF NASD RULES 2110, 2440 AND INTERPRETATIVEMATERIAL-2440. THE FIRM FAILED TO TRANSMIT REPORTABLE ORDEREVENTS (ROES) TO OATS. THIS CONDUCT CONSTITUTES SEPARATE ANDDISTINCT VIOLATIONS OF NASD RULE 6955(A). THE FIRM FAILED TO: SHOWTHE TERMS AND CONDITIONS ON THE MEMORANDUM OF BROKERAGEORDERS; PRESERVE FOR A PERIOD OF NOT LESS THAN THREE YEARS,THE FIRST TWO IN AN ACCESSIBLE PLACE, A COMPLETE AND ACCURATEEXECUTION BLOTTER; REPORT TO THE NNTRF THE CORRECT SYMBOLINDICATING WHETHER THE TRANSACTION WAS A BUY, SELL, SELL SHORT,OR CROSS FOR REPORTABLE SECURITIES AND WHETHER IT EXECUTEDTRANSACTIONS IN REPORTABLE SECURITIES IN A PRINCIPAL OR AGENCYCAPACITY; AND REPORT TO THE NNTRF LAST SALE REPORTS OFTRANSACTIONS IN DESIGNATED SECURITIES, SUBMIT THE "RISKLESS"PORTION OF "RISKLESS" PRINCIPAL TRANSACTIONS IN DESIGNATEDSECURITIES, AND INCORRECTLY REPORT THE SECOND LEG OF APRINCIPAL TRANSACTION AS "AGENT" TO THE NNTRF. THIS CONDUCTCONSTITUTES SEPARATE AND DISTINCT VIOLATIONS OF SEC RULE 17A-3AND NASD RULES 3110, 4632 AND 6130(D), AND A VIOLATION OF SEC RULE17A-4 AND NASD RULE 3110. THE FIRM FAILED TO: REPORT TO THE OTCRFA LAST SALE REPORT OF A TRANSACTION IN OTC EQUITY SECURITIESAND INCORRECTLY REPORT THE SECOND LEG OF "RISKLESS" PRINCIPALTRANSACTIONS AS "CROSS" TRANSACTIONS TO THE OTCRF; ANDPROVIDE WRITTEN NOTIFICATION DISCLOSING TO ITS CUSTOMER THATTHE TRANSACTION WAS EXECUTED AT AN AVERAGE PRICE. THISCONDUCT CONSTITUTES SEPARATE AND DISTINCT VIOLATIONS OF SECRULE 10B-10 AND NASD RULE 6620. THE FIRM'S SUPERVISORY SYSTEMDID NOT PROVIDE FOR SUPERVISION REASONABLY DESIGNED TOACHIEVE COMPLIANCE WITH RESPECT TO SECURITIES LAWS ANDREGULATIONS AND NASD RULES. THE FIRM FAILED TO MAKE A REPORTON COVERED ORDERS IN NATIONAL MARKET SYSTEM SECURITIES ITRECEIVED FOR EXECUTION FROM ANY PERSON PUBLICLY AVAILABLE.







Initiated By: FINRA






Other Product Type(s): REPORTABLE SECURITIES

SEC RULES 10B-10, 17A-3, 17A-4 AND RULE 605 OF REGULATION NMS,NASD RULES 2110, 2440, 3010, 3110, 4632, 6130(D), 6620, 6620(A), 6955(A)AND INTERPRETATIVE MATERIAL-2440: RESPONDENT NATIONALSECURITIES CORPORATION FAILED, WITHIN 90 SECONDS AFTEREXECUTION, TO TRANSMIT TO THE OTCRF LAST SALE REPORTS OFTRANSACTIONS IN OTC EQUITY SECURITIES AND FAILED TO DESIGNATETHE REPORTS AS LATE. THIS CONDUCT CONSTITUTES A PATTERN ORPRACTICE OF LATE REPORTING WITHOUT EXCEPTION CIRCUMSTANCESIN VIOLATION OF NASD RULES 2110 AND 6620(A). THE FIRM SOLD ORBOUGHT CORPORATE BONDS TO OR FROM CUSTOMERS AND FAILED TOSELL OR BUY SUCH BONDS AT A PRICE THAT WAS FAIR, TAKING INTOCONSIDERATION ALL RELEVANT CIRCUMSTANCES, INCLUDING MARKETCONDITIONS WITH RESPECT TO EACH BOND AT THE TIME OF THETRANSACTION, THE EXPENSE INVOLVED AND THAT THE FIRM WASENTITLED TO A PROFIT. THIS CONDUCT CONSTITUTES SEPARATE ANDDISTINCT VIOLATIONS OF NASD RULES 2110, 2440 AND INTERPRETATIVEMATERIAL-2440. THE FIRM FAILED TO TRANSMIT REPORTABLE ORDEREVENTS (ROES) TO OATS. THIS CONDUCT CONSTITUTES SEPARATE ANDDISTINCT VIOLATIONS OF NASD RULE 6955(A). THE FIRM FAILED TO: SHOWTHE TERMS AND CONDITIONS ON THE MEMORANDUM OF BROKERAGEORDERS; PRESERVE FOR A PERIOD OF NOT LESS THAN THREE YEARS,THE FIRST TWO IN AN ACCESSIBLE PLACE, A COMPLETE AND ACCURATEEXECUTION BLOTTER; REPORT TO THE NNTRF THE CORRECT SYMBOLINDICATING WHETHER THE TRANSACTION WAS A BUY, SELL, SELL SHORT,OR CROSS FOR REPORTABLE SECURITIES AND WHETHER IT EXECUTEDTRANSACTIONS IN REPORTABLE SECURITIES IN A PRINCIPAL OR AGENCYCAPACITY; AND REPORT TO THE NNTRF LAST SALE REPORTS OFTRANSACTIONS IN DESIGNATED SECURITIES, SUBMIT THE "RISKLESS"PORTION OF "RISKLESS" PRINCIPAL TRANSACTIONS IN DESIGNATEDSECURITIES, AND INCORRECTLY REPORT THE SECOND LEG OF APRINCIPAL TRANSACTION AS "AGENT" TO THE NNTRF. THIS CONDUCTCONSTITUTES SEPARATE AND DISTINCT VIOLATIONS OF SEC RULE 17A-3AND NASD RULES 3110, 4632 AND 6130(D), AND A VIOLATION OF SEC RULE17A-4 AND NASD RULE 3110. THE FIRM FAILED TO: REPORT TO THE OTCRFA LAST SALE REPORT OF A TRANSACTION IN OTC EQUITY SECURITIESAND INCORRECTLY REPORT THE SECOND LEG OF "RISKLESS" PRINCIPALTRANSACTIONS AS "CROSS" TRANSACTIONS TO THE OTCRF; ANDPROVIDE WRITTEN NOTIFICATION DISCLOSING TO ITS CUSTOMER THATTHE TRANSACTION WAS EXECUTED AT AN AVERAGE PRICE. THISCONDUCT CONSTITUTES SEPARATE AND DISTINCT VIOLATIONS OF SECRULE 10B-10 AND NASD RULE 6620. THE FIRM'S SUPERVISORY SYSTEMDID NOT PROVIDE FOR SUPERVISION REASONABLY DESIGNED TOACHIEVE COMPLIANCE WITH RESPECT TO SECURITIES LAWS ANDREGULATIONS AND NASD RULES. THE FIRM FAILED TO MAKE A REPORTON COVERED ORDERS IN NATIONAL MARKET SYSTEM SECURITIES ITRECEIVED FOR EXECUTION FROM ANY PERSON PUBLICLY AVAILABLE.


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 $105,500 AND ORDERED TOPAY TO INVESTORS $15,697.01 IN RESTITUTION PLUS INTEREST FROM THEDATE OF THE VIOLATIVE CONDUCT TO THE DATE THE AWC IS ACCEPTED. AREGISTERED PRINCIPAL OF THE FIRM SHALL SUBMIT TO FINRASATISFACTORY PROOF OF PAYMENT OF THE RESTITUTION, OR OFREASONABLE AND DOCUMENTED EFFORTS UNDERTAKEN TO EFFECTRESTITUTION NO LATER THAN 120 DAYS AFTER ACCEPTANCE OF THEAWC. IF FOR ANY REASON THE FIRM CANNOT LOCATE ANY CUSTOMERAFTER REASONABLE AND DOCUMENTED EFFORTS WITHIN SUCH PERIOD,OR SUCH ADDITIONAL PERIOD AGREED TO BY FINRA STAFF, THE FIRMSHALL FORWARD ANY UNDISTRIBUTED RESTITUTION AND INTEREST TOTHE APPROPRIATE ESCHEAT, UNCLAIMED PROPERTY, OR ABANDONEDPROPERTY FUND FOR THE STATE IN WHICH THE CUSTOMER IS LASTKNOWN TO HAVE RESIDED.

CensureMonetary/Fine $105,500.00Disgorgement/Restitution

Disclosure 19 of 62

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Initiated By: NASDAQ STOCK MARKET






Other Product Type(s): NASDAQ SECURITIES

Allegations: NASDAQ RULE 4755 - NATIONAL SECURITIES CORPORATION ENTEREDORDERS INTO THE NASDAQ MARKET CENTER THAT FAILED TOCORRECTLY INDICATE WHETHER THE ORDERS WERE A BUY, SHORT SALEOR LONG SALE.



Resolution:


No










No



Initiated By: NASDAQ STOCK MARKET






Other Product Type(s): NASDAQ SECURITIES

Allegations: NASDAQ RULE 4755 - NATIONAL SECURITIES CORPORATION ENTEREDORDERS INTO THE NASDAQ MARKET CENTER THAT FAILED TOCORRECTLY INDICATE WHETHER THE ORDERS WERE A BUY, SHORT SALEOR LONG SALE.



Resolution:










Disclosure 20 of 62

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Initiated By: FINRA







Allegations: NASD RULE 2110: THE BREAKPOINT SELF-ASSESSMENT FOLLOW-UPREVIEW CONDUCTED FOR THE FIRM FOUND THAT THE FIRM FAILED TOACCURATELY COMPLETE THE SELF-ASSESSMENT OF BREAKPOINTCOMPLIANCE AND THE FIRM'S SELF-ASSESSMENT UNDERREPORTED THENUMBER OF TRANSACTIONS WITH MISSED BREAKPOINTS. HAD THE FIRMACCURATELY COMPLETED ITS SELF-ASSESSMENT, FINRA WOULD HAVEDIRECTED THE FIRM TO UNDERTAKE ADDITIONAL REMEDIAL STEPS.



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 $25,000.


No



iReporting Source: 69©2020 FINRA. All rights reserved. Report about NATIONAL SECURITIES CORPORATION






Initiated By: FINRA







Allegations: NASD RULE 2110: THE BREAKPOINT SELF-ASSESSMENT FOLLOW-UPREVIEW CONDUCTED FOR THE FIRM FOUND THAT THE FIRM FAILED TOACCURATELY COMPLETE THE SELF-ASSESSMENT OF BREAKPOINTCOMPLIANCE AND THE FIRM'S SELF-ASSESSMENT UNDERREPORTED THENUMBER OF TRANSACTIONS WITH MISSED BREAKPOINTS. HAD THE FIRMACCURATELY COMPLETED ITS SELF-ASSESSMENT, FINRA WOULD HAVEDIRECTED THE FIRM TO UNDERTAKE ADDITIONAL REMEDIAL STEPS.



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 $25,000.



Disclosure 21 of 62

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Initiated By: NASD


Allegations: NASD RULES 2110, 3010(A) AND (B) - RESPONDENT MEMBER IGNORED REDFLAGS THAT A REPRESENTATIVE WAS CIRCUMVENTING HIS HEIGHTENEDSUPERVISION PLAN.










Docket/Case Number: E8A2004064501




Resolution:


Sanction Details: WITHOUT ADMITTING OR DENYING THE FINDINGS, NATIONAL SECURITIESCORPORATION CONSENTED TO THE DESCRIBED SANCTIONS AND TO THEENTRY OF FINDINGS, THEREFORE, THE FIRM WAS CENSURED AND FINED$20,000.


No




Initiated By: NASD



Docket/Case Number: E8A2004064501



Allegations: NASD RULES 2110, 3010(A) AND (B) - RESPONDENT MEMBER IGNORED REDFLAGS THAT A REPRESENTATIVE WAS CIRCUMVENTING HIS HEIGHTENEDSUPERVISION PLAN.










Resolution:


Sanction Details: WITHOUT ADMITTING OR DENYING THE FINDINGS, NATIONAL SECURITIESCORPORATION CONSENTED TO THE DESCRIBED SANCTIONS AND TO THEENTRY OF FINDINGS, THEREFORE, THE FIRM WAS CENSURED AND FINED$20,000.

Firm Statement THE FIRM WAS TO HAVE EXPANDED THE BREADTH OF ONE REP'SHEIGHTENED SUPERVISION TO INCLUDE HIS BROTHER-IN-LAW'SACTIVITIES TOO. NASD ASSERTED THAT, HAD THE FIRM DONE SO, ITWOULD THEN HAVE LEARNED OF THEIR JOINT SCHEME TOINTENTIONALLY CIRCUMVENT THE FIRM'S HEIGHTENED SUPERVISIONPLAN.



Disclosure 22 of 62

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Allegations: NASD RULES 2110, 3010, 6230(A), MSRB RULES G-14, G-17 - NATIONALSECURITIES CORPORATION FAILED TO REPORT TO TRACETRANSACTIONS IN TRACE-ELIGIBLE SECURITIES EXECUTED ON ABUSINESS DAY DURING TRACE SYSTEM HOURS WITHIN 30 MINUTES OFTHE TIME OF EXECUTION; THE FIRM'S SUPERVISORY SYSTEM DID NOTPROVIDE FOR SUPERVISION REASONABLY DESIGNED TO ACHIEVECOMPLIANCE WITH APPLICABLE SECURITIES LAWS, REGULATIONS ANDNASD RULES CONCERNING TRACE REPORTING; SPECIFICALLY, THEFIRM'S SUPERVISORY SYSTEM DID NOT INCLUDE WRITTEN SUPERVISORYPROCEDURES PROVIDING FOR IDENTIFICATION OF THE PERSON(S)RESPONSIBLE FOR SUPERVISION WITH RESPECT TO APPLICABLE RULES,A STATEMENT OF SUPERVISORY STEP(S) TO BE TAKEN BY THE IDENTIFIEDPERSON(S), HOW OFTEN SUCH STEP(S)SHOULD BE TAKEN AND HOW THECOMPLETION OF THE STEP(S) INCLUDED IN THE WRITTEN SUPERVISORYPROCEDURES SHOULD BE DOCUMENTED. THE FIRM FAILED TO REPORTTO MSRB CUSTOMER TRANSACTIONS IN MUNICIPAL SECURITIES WITHIN15 MINUTES OF THE TIME OF EXECUTION.







Initiated By: NASD






Other Product Type(s): TRACE-ELIGIBLE SECURITIES

NASD RULES 2110, 3010, 6230(A), MSRB RULES G-14, G-17 - NATIONALSECURITIES CORPORATION FAILED TO REPORT TO TRACETRANSACTIONS IN TRACE-ELIGIBLE SECURITIES EXECUTED ON ABUSINESS DAY DURING TRACE SYSTEM HOURS WITHIN 30 MINUTES OFTHE TIME OF EXECUTION; THE FIRM'S SUPERVISORY SYSTEM DID NOTPROVIDE FOR SUPERVISION REASONABLY DESIGNED TO ACHIEVECOMPLIANCE WITH APPLICABLE SECURITIES LAWS, REGULATIONS ANDNASD RULES CONCERNING TRACE REPORTING; SPECIFICALLY, THEFIRM'S SUPERVISORY SYSTEM DID NOT INCLUDE WRITTEN SUPERVISORYPROCEDURES PROVIDING FOR IDENTIFICATION OF THE PERSON(S)RESPONSIBLE FOR SUPERVISION WITH RESPECT TO APPLICABLE RULES,A STATEMENT OF SUPERVISORY STEP(S) TO BE TAKEN BY THE IDENTIFIEDPERSON(S), HOW OFTEN SUCH STEP(S)SHOULD BE TAKEN AND HOW THECOMPLETION OF THE STEP(S) INCLUDED IN THE WRITTEN SUPERVISORYPROCEDURES SHOULD BE DOCUMENTED. THE FIRM FAILED TO REPORTTO MSRB CUSTOMER TRANSACTIONS IN MUNICIPAL SECURITIES WITHIN15 MINUTES OF THE TIME OF EXECUTION.


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 AND FINED $30,000.

Regulator Statement .


No




Allegations: NASD RULES 2110, 3010, 6230(A), MSRB RULES G-14, G-17 - NATIONALSECURITIES CORPORATION FAILED TO REPORT TO TRACETRANSACTIONS IN TRACE-ELIGIBLE SECURITIES EXECUTED ON ABUSINESS DAY DURING TRACE SYSTEM HOURS WITHIN 30 MINUTES OFTHE TIME OF EXECUTION; THE FIRM'S SUPERVISORY SYSTEM DID NOTPROVIDE FOR SUPERVISION REASONABLY DESIGNED TO ACHIEVECOMPLIANCE WITH APPLICABLE SECURITIES LAWS, REGULATIONS ANDNASD RULES CONCERNING TRACE REPORTING; SPECIFICALLY, THEFIRM'S SUPERVISORY SYSTEM DID NOT INCLUDE WRITTEN SUPERVISORYPROCEDURES PROVIDING FOR IDENTIFICATION OF THE PERSON(S)RESPONSIBLE FOR SUPERVISION WITH RESPECT TO APPLICABLE RULES,A STATEMENT OF SUPERVISORY STEP(S) TO BE TAKEN BY THE IDENTIFIEDPERSON(S), HOW OFTEN SUCH STEP(S)SHOULD BE TAKEN AND HOW THECOMPLETION OF THE STEP(S) INCLUDED IN THE WRITTEN SUPERVISORYPROCEDURES SHOULD BE DOCUMENTED. THE FIRM FAILED TO REPORTTO MSRB CUSTOMER TRANSACTIONS IN MUNICIPAL SECURITIES WITHIN15 MINUTES OF THE TIME OF EXECUTION.







Initiated By: NASD


Other


NO SANCTION SPECIFIED ON U6.




Other Product Type(s): TRACE-ELIGIBLE SECURITIES

NASD RULES 2110, 3010, 6230(A), MSRB RULES G-14, G-17 - NATIONALSECURITIES CORPORATION FAILED TO REPORT TO TRACETRANSACTIONS IN TRACE-ELIGIBLE SECURITIES EXECUTED ON ABUSINESS DAY DURING TRACE SYSTEM HOURS WITHIN 30 MINUTES OFTHE TIME OF EXECUTION; THE FIRM'S SUPERVISORY SYSTEM DID NOTPROVIDE FOR SUPERVISION REASONABLY DESIGNED TO ACHIEVECOMPLIANCE WITH APPLICABLE SECURITIES LAWS, REGULATIONS ANDNASD RULES CONCERNING TRACE REPORTING; SPECIFICALLY, THEFIRM'S SUPERVISORY SYSTEM DID NOT INCLUDE WRITTEN SUPERVISORYPROCEDURES PROVIDING FOR IDENTIFICATION OF THE PERSON(S)RESPONSIBLE FOR SUPERVISION WITH RESPECT TO APPLICABLE RULES,A STATEMENT OF SUPERVISORY STEP(S) TO BE TAKEN BY THE IDENTIFIEDPERSON(S), HOW OFTEN SUCH STEP(S)SHOULD BE TAKEN AND HOW THECOMPLETION OF THE STEP(S) INCLUDED IN THE WRITTEN SUPERVISORYPROCEDURES SHOULD BE DOCUMENTED. THE FIRM FAILED TO REPORTTO MSRB CUSTOMER TRANSACTIONS IN MUNICIPAL SECURITIES WITHIN15 MINUTES OF THE TIME OF EXECUTION.


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 AND FINED $30,000.



Disclosure 23 of 62

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Allegations: SEC RULES 15C3-1, 17A-4, NASD MEMBERSHIP AND REGISTRATION RULE1017, NASD CONDUCT RULES 2110, 3010(A), 3370(B)(4), 3110 - NATIONALSECURITIES CORPORATION FAILED TO FILE AN APPLICATION FOR NASDAPPROVAL OF A MATERIAL CHANGE IN ITS BUSINESS OPERATIONS. THEMATERIAL CHANGE WAS AN INCREASE OF APPROXIMATELY 36.7 PERCENTIN THE NUMBER OF THE FIRM'S ASSOCIATED PERSONS INVOLVED INSALES OVER A 12-MONTH PERIOD. THE FIRM ALSO FAILED TO ESTABLISHAND MAINTAIN A SUPERVISORY SYSTEM TO ACHIEVE COMPLIANCE WITHNASD MEMBERSHIP AND REGISTRATION RULE 1017. NATIONALSECURITIES CORPORATION FAILED TO SHOW THAT AN "AFFIRMATIVEDETERMINATION" HAD BEEN MADE FOR SHORT SALE TRANSACTIONS INNOVEMBER 2001 AND FAILED TO PRESERVE THE RECORD OF "AFFIRMATIVE DETERMINATIONS." THE FIRM ACTING THROUGH AREGISTERED REPRESENTATIVE, ENTERED INTO A SECURITY AGREEMENTIN WHICH IT PLEDGED ITS ASSETS TO SECURE A DEBT INCURRED BY ITSPARENT COMPANY TO ITS CLEARING BROKER/DEALER. AS A RESULT THEFIRM'S NET CAPITAL WAS DEFICIENT.







Initiated By: NASD




Docket/Case Number: C3B050005



SEC RULES 15C3-1, 17A-4, NASD MEMBERSHIP AND REGISTRATION RULE1017, NASD CONDUCT RULES 2110, 3010(A), 3370(B)(4), 3110 - NATIONALSECURITIES CORPORATION FAILED TO FILE AN APPLICATION FOR NASDAPPROVAL OF A MATERIAL CHANGE IN ITS BUSINESS OPERATIONS. THEMATERIAL CHANGE WAS AN INCREASE OF APPROXIMATELY 36.7 PERCENTIN THE NUMBER OF THE FIRM'S ASSOCIATED PERSONS INVOLVED INSALES OVER A 12-MONTH PERIOD. THE FIRM ALSO FAILED TO ESTABLISHAND MAINTAIN A SUPERVISORY SYSTEM TO ACHIEVE COMPLIANCE WITHNASD MEMBERSHIP AND REGISTRATION RULE 1017. NATIONALSECURITIES CORPORATION FAILED TO SHOW THAT AN "AFFIRMATIVEDETERMINATION" HAD BEEN MADE FOR SHORT SALE TRANSACTIONS INNOVEMBER 2001 AND FAILED TO PRESERVE THE RECORD OF "AFFIRMATIVE DETERMINATIONS." THE FIRM ACTING THROUGH AREGISTERED REPRESENTATIVE, ENTERED INTO A SECURITY AGREEMENTIN WHICH IT PLEDGED ITS ASSETS TO SECURE A DEBT INCURRED BY ITSPARENT COMPANY TO ITS CLEARING BROKER/DEALER. AS A RESULT THEFIRM'S NET CAPITAL WAS DEFICIENT.


Resolution:


Sanction Details: WITHOUT ADMITTING OR DENYING THE ALLEGATIONS, NATIONALSECURITIES CORPORATION, CONSENTED TO THE DESCRIBED SANCTIONSAND TO THE ENTRY OF FINDINGS THEREFORE, THE FIRM IS CENSUREDAND FINED $30,000 JOINTLY AND SEVERALLY. IN ADDITION, THE FIRM ISFINED $55,000 AND FOR A PERIOD OF TWO YEARS FOLLOWING THIS AWC,PRIOR TO INCREASING THE NUMBER OF ITS ASSOCIATED PERSONSINVOLVED IN SALES BY 20 PERCENT OR MORE IN ANY 12-MONTH PERIOD,THE FIRM SHALL FILE AN APPLICATION FOR NASD APPROVAL OF SUCH ANINCREASE AS A MATERIAL CHANGE IN ITS BUSINESS IF, DURING THE TWO-YEAR PERIOD OF THE FOREGOING UNDERTAKING, NATIONAL SHALLSUBMIT AN APPLICATION FOR APPROVAL OF A CHANGE IN OWNERSHIP ORCONTROL.









Initiated By: NASD


Other


OTHER





Allegations: ALLEGED THAT:

1. FIRM FAILED TO APPLY FOR NASD APPROVAL OF MATERIAL CHANGE OFBUSINESS IN VIOLATION OF NASD RULE 1017 (A) (5) AND CONDUCT RULE2110. MATTER RELATED TO CHANGE IN THE NUMBER OF ASSOCIATEDSALES PERSONS INVOLVED IN SALES OVER A 12-MONTH PERIOD(FEBRUARY 2003 TO FEBRUARY 2004). FIRM FAILED TO ESTABLISH ANDMAINTAIN A SUPERVISORY SYSTEM RELATING TO SUCH APPLICATIONS INVIOLATION OF NASD CONDUCT RULE 3110(A) AND 2110.

2. ALLEGED FAILURE TO MAINTAIN DOCUMENTATION TO SHOW ANAFFIRMATIVE DETERMINATION OF 20 SHORT SALE TRANSACTIONS INNOVEMBER 2001 AND FAILURE TO PRESERVE RECORDS OF AFFIRMATIVEDETERMINATIONS MADE IN OCTOBER 2001, IN VIOLATION OF NASDCONDUCT RULE 3370(B).(4)(B), AND 2110.

3. ALLEGED VIOLATION OF NET CAPITAL REQUIREMENT ON 22 DATESFROM SEPTEMBER 2001 UNTIL NOVEMBER 2003, IN VIOLATION OF RULEOF SEC RULE 15C3-1, AND NASD CONDUCT RULE 2110.



Resolution:

Other Sanctions Ordered: FOR A PERIOD OF 2 YEARS FROM THE ISSUANCE OF THE AWC, NSC SHALLFILE FOR NASD APPROVAL OF MATERIAL CHANGE OF BUSINESS PRIOR TOINCREASING THE NUMBER OF ASSOCIATED PERSONS INVOLVED IN SALESBY 20 % OR MORE IN ANY 12-MONTH PERIOD.








FOR A PERIOD OF 2 YEARS FROM THE ISSUANCE OF THE AWC, NSC SHALLFILE FOR NASD APPROVAL OF MATERIAL CHANGE OF BUSINESS PRIOR TOINCREASING THE NUMBER OF ASSOCIATED PERSONS INVOLVED IN SALESBY 20 % OR MORE IN ANY 12-MONTH PERIOD.

Sanction Details: TOTAL AMOUNT: $85,000DATE PAID: COMMENCING APRIL 2005.

Disclosure 24 of 62

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Initiated By: NASD


Docket/Case Number: CMS040221

Allegations: SEC RULES 11AC1-4, 11AC1-5(B) NASD MARKETPLACE RULE 4632(D), NASDMARKETPLACE RULE 6620(D), 6130(D) NASD CONDUCT RULES 2110, 2320,IM-2110-2 AND 3010 – NATIONAL SECURITIES CORPORATION FAILED TODISPLAY IMMEDIATELY CUSTOMER LIMIT ORDERS IN NASDAQ SECURITIESIN ITS PUBLIC QUOTATION, WHEN EACH SUCH ORDER WAS AT A PRICETHAT WOULD HAVE IMPROVED THE FIRM'S BID OR OFFER IN EACH SUCHSECURITY, AND THE NATIONAL BEST BID OR OFFER FOR EACH SUCHSECURITY, AND SIZE OF THE ORDER REPRESENTED MORE THAN A DEMINIMIS CHANGE IN RELATION TO THE SIZE ASSOCIATED WITH THE FIRM'SBID OR OFFER IN EACH SUCH SECURITY. THE FIRM ALSO FAILED TOSUBMIT, FOR THE OFFSETTING, "RISKLESS" PORTION OF "RISKLESSPRINCIPAL" TRANSACTIONS IN NASDAQ NATIONAL MARKET SECURITIESAND OTC EQUITY SECURITIES, EITHER A CLEARING-ONLY REPORT WITH ACAPACITY INDICATOR OF "RISKLESS PRINCIPAL," OR A NON-TAPE, NON-CLEARING REPORT WITH A CAPACITY INDICATOR OF "RISKLESSPRINCIPAL". IN ADDITION, THE FIRM FAILED TO SUBMIT A LAST SALEREPORT FOR THE INITIAL LEG OF A "RISKLESS PRINCIPAL" TRANSACTIONIN NASDAQ NATIONAL MARKET SECURITIES AND OTC EQUITY SECURITIES.FURTHERMORE, THE FIRM FAILED TO EXECUTE ORDERS FULLY ANDPROMPTLY. NATIONAL SECURITIES CORPORATION EXECUTED CUSTOMERLIMIT ORDERS AT PRICES INFERIOR TO THE CUSTOMERS' LIMIT ORDERPRICE, AND FAILED TO CONTEMPORANEOUSLY OR PARTIALLY EXECUTETHE CUSTOMER LIMIT ORDERS IN NASDAQ SECURITIES AFTER IT TRADEDEACH SUBJECT SECURITY FOR ITS OWN MARKET-MAKING ACCOUNT AT APRICE TAT WOULD HAVE SATISFIED EACH CUSTOMER'S LIMIT ORDER. THEFIRM FAILED TO REPORT TO ACT THE CORRECT SYMBOL INDICATINGWHETHER THE TRANSACTION WAS A BUY, SELL, SELL SHORT EXEMPT ORCROSS FOR 12 TRANSACTIONS IN ELIGIBLE SECURITIES. MOREOVER, THEFIRM MAD AVAILABLE A REPORT ON THE COVERED ORDERS IN NATIONALMARKET SYSTEM SECURITIES THAT IT RECEIVED FOR EXECUTION FROMANY PERSON, WHICH INCLUDED INCORRECT INFORMATION.













Resolution:


Sanction Details: WITHOUT ADMITTING OR DENYING THE ALLEGATIONS, NATIONALSECURITIES CORPORATION CONSENTED TO THE DESCRIBED SANCTIONSAND TO THE ENTRY OF FINDINGS; THEREFORE, THE FIRM IS CENSURED,FINED $32,500 (CONSISTING OF A $7,500 FINE FOR LIMIT ORDER DISPLAYVIOLATIONS, A $10,000 FINE FOR SEC RULE 11AC1-5 VIOLATIONS, A $5,000FINE FOR BEST EXECUTION AND LIMIT ORDER PROTECTION VIOLATIONS,A $3,000 FINE FOR TRADE REPORTING VIOLATIONS, AND A $2,000 FINE FORACT REPORTING VIOLATIONS, A $5,000 FINE FOR SUPERVISORYVIOLATIONS) AND AN UNDERTAKING TO REVISE THE FIRM'S WRITTENSUPERVISORY PROCEDURES. WITHIN 30 BUSINESS DAYS OFACCEPTANCE OF THIS AWC BY THE NAC, A REGISTERED PRINCIPAL OFTHE RESPONDENT FIRM SHALL SUBMIT TO NASD A SIGNED DATEDLETTER, PROVIDING THE FOLLOWING INFORMATION: A REFERENCE TOTHIS MATTER; A REPRESENTATION THAT THE FIRM HAS REVISED ITSWRITTEN SUPERVISORY PROCEDURES TO ADDRESS THE ABOVEDEFICIENCIES AND; THE DATE THE REVISED PROCEDURES WEREIMPLEMENTED.

Regulator Statement FINALLY, THE FIRM'S SUPERVISORY SYSTEM DID NOT PROVIDE FORSUPERVISION REASONABLY DESIGNED TO ACHIEVE COMPLIANCE WITHRESPECT TO THE APPLICABLE SECURITIES LAWS AND REGULATIONS, ANDTHE RULES OF NASD, AND SEC, CONCERNING ANTI-INTIMIDATION ANDCOORDINATION, TRADE REPORTING OF RISKLESS PRINCIPAL TRADES,OATS ACCURACY AND TIMELINESS, BOOKS AN RECORDS REQUIREMENTS.


No







www.finra.org/brokercheck User GuidanceFINALLY, THE FIRM'S SUPERVISORY SYSTEM DID NOT PROVIDE FORSUPERVISION REASONABLY DESIGNED TO ACHIEVE COMPLIANCE WITHRESPECT TO THE APPLICABLE SECURITIES LAWS AND REGULATIONS, ANDTHE RULES OF NASD, AND SEC, CONCERNING ANTI-INTIMIDATION ANDCOORDINATION, TRADE REPORTING OF RISKLESS PRINCIPAL TRADES,OATS ACCURACY AND TIMELINESS, BOOKS AN RECORDS REQUIREMENTS.


Initiated By: NASD




RESTITUTION





Allegations: CENSURE AND A FINE RELATING FROM MRD 200238654. LIMIT ORDERDISPLAY VIOLATIONS. SEC RULE 11 AC1-5 VIOLATIONS. BEST EXECUTIONAND LIMIT ORDER PROTECTION VIOLATIONS. TRADE REPORTINGVIOLATIONS. ACT REPORTING VIOLATIONS FOR MRD 200343800. SECRULE 11AC1-5 VIOLATIONS. SUPERVISORY VIOLATIONS FOR BOTHMRD200238654 AND MRD200343800.



Resolution:

Other Sanctions Ordered: REVISION OF THE FIRM'S WRITTEN SUPERVISORY PROCEDURES WITHRESPECT TO TRADING SPECIFIC AREAS REFERENCED.

Sanction Details: CENSURE AND FINE OF $32,500 CONSISTING OF $7500 FINE FOR LIMITORDER DISPLAY VIOLATIONS. $5000 FINE FOR VIOLATIONS OF SEC RULE11 AC1-5. $5000 FINE FOR BEST EXECUTION AND LIMIT ORDERPROTECTION VIOLATIONS. $3000 FINE FOR TRADE REPORTINGVIOLATIONS. $2000 FINE FOR ACT REPORTING VIOLATIONS FOR MRD200343800. $5000 FINE FOR VIOLATIONS OF SEC RULE 11AC1-5VIOLATIONS. $5000 FINE FOR SUPERVISORY VIOLATIONS OF BOTHMRD200238654 AND MRD200343800.

PLUS RESTITUTION OF $243 + INTEREST TO SPECIFIED INVESTORS.PAYMENTS COMMENCING 01/2005.








CENSURE AND FINE OF $32,500 CONSISTING OF $7500 FINE FOR LIMITORDER DISPLAY VIOLATIONS. $5000 FINE FOR VIOLATIONS OF SEC RULE11 AC1-5. $5000 FINE FOR BEST EXECUTION AND LIMIT ORDERPROTECTION VIOLATIONS. $3000 FINE FOR TRADE REPORTINGVIOLATIONS. $2000 FINE FOR ACT REPORTING VIOLATIONS FOR MRD200343800. $5000 FINE FOR VIOLATIONS OF SEC RULE 11AC1-5VIOLATIONS. $5000 FINE FOR SUPERVISORY VIOLATIONS OF BOTHMRD200238654 AND MRD200343800.

PLUS RESTITUTION OF $243 + INTEREST TO SPECIFIED INVESTORS.PAYMENTS COMMENCING 01/2005.

Firm Statement FINAL ACCEPTANCE OF AWC NO CMS 040221 DATED 12/31/2004.

Disclosure 25 of 62

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Initiated By: NASD

Allegations: NASD CONDUCT RULES 2110, 3010(A), 3010(B) AND SEC RULE 17A-4 - FROMIN OR ABOUT JANUARY 2001 THROUGH AUGUST 2002 (THE "RELEVANTPERIOD"), NATIONAL SECURITIES CORPORATION ("NSC"), ACTINGTHROUGH VARIOUS AGENTS, FACILITATED DECEPTIVE PRACTICESREGARDING MARKET TIMING BY FOUR INSTITUTIONAL CLIENTS OF NSC("HEDGE FUND CLIENTS") USING THREE BROKERS ("NSC BROKER"). ALLOF THE NSC ACCOUNTS OPENED BY THE HEDGE FUND CLIENTS HADMARKET TIMING AS THEIR PRIMARY, IF NOT EXCLUSIVE, INVESTMENTOBJECTIVE. THIRTEEN DIFFERENT FUND COMPANIES ISSUED ONE ORMORE NOTICES TO NSC. THE NOTICES INFORMED NSC THAT MARKETTIMING WAS PROHIBITED BY THE FUNDS AND THAT THE ACTIVITY INQUESTION MUST STOP. THESE NOTICES WERE IGNORED OR AVOIDED BYNSC, THE NSC BROKERS AND THE HEDGE FUND CLIENTS. THE MARKETTIMING TRANSACTIONS WHICH OCCURRED IN VIOLATION OF THENOTICES, CONSTITUTED AT LEAST 1,088 PURCHASE AND SALETRANSACTIONS TOTALING APPROXIMATELY $399 MILLION. THESE MARKETTIMING TRANSACTIONS ALSO OCCURRED IN CONTRAVENTION OF MOSTOF THE SELLING AGREEMENTS BETWEEN NSC AND THESE FUNDCOMPANIES. NSC PERMITTED THE NSC BROKERS AND THEIR HEDGEFUND CLIENTS TO EVADE THE NOTICES BY SHIFTING THE MARKET TIMINGACTIVITIES AMONG DIFFERENT NSC BROKERAGE ACCOUNTSCONTROLLED BY THE CLIENTS. THE OTHER MARKET TIMING TRADESINVOLVING TWELVE OTHER FUND COMPANIES FOLLOWED A SIMILARPATTERN. IN ADDITION, NSC HAD NO SUPERVISORY SYSTEM THAT WASREASONABLY DESIGNED TO PREVENT OR DETECT DECEPTIVE ORUNETHICAL MARKET TIMING PRACTICES. NSC HAD NO SUPERVISORYSYSTEM FOR ENFORCING OR TRACKING THE DOZENS OF NOTICES THATWERE ISSUED BY MULTIPLE MUTUAL FUND COMPANIES THAT DEMANDEDTHE CESSATION OF THE MARKET TIMING ACTIVITIES. ADDITIONALLY,THERE WAS NO SUPERVISORY SYSTEM FOR DISTRIBUTING THE NOTICESTO THE AFFECTED PARTIES. NSC, ACTING THROUGH OTHERS, ALSOFAILED TO RESPOND TO RED FLAG WARNING SIGNALS THAT THE NSCBROKERS AND THEIR HEDGE FUND CLIENTS WERE ENGAGED INDECEPTIVE MARKET TIMING PRACTICES.











Principal Product Type: Mutual Fund(s)



Resolution:


Sanction Details: WITHOUT ADMITTING OR DENYING THE ALLEGATIONS, NATIONALSECURITIES CORPORATION CONSENTED TO THE DESCRIBED SANCTIONSAND TO THE ENTRY OF FINDINGS; THEREFORE, THE FIRM IS CENSUREDAND FINED IN THE AMOUNT OF $300,000, PAYABLE WITHIN 30 DAYS OF THEISSUANCE OF THIS AWC. NSC IS SUSPENDED FROM OPENING NEWMUTUAL FUND ACCOUNTS FOR 30 DAYS FOR PROSPECTIVE CUSTOMERSWHO ARE NOT NSC CUSTOMERS AS OF THE DATE OF THIS AWC. WITHIN90 DAYS OF THE ISSUANCE OF THIS AWC, NSC SHALL PAYAPPROXIMATELY $299,360 TO COMPENSATE THE FUND COMPANIES ANDRETURN THE ILLICIT PROFITS ENJOYED BY VARIOUS PARTICIPANTS INTHE MARKET TIMING SCHEME. ALSO WITHIN 90 DAYS OF THE ISSUANCEOF THIS AWC, AN OFFICER SHALL NOTIFY NASD THAT THE PAYMENTS TOTHE FUND COMPANIES HAVE BEEN MADE. IN ADDITION, NSC SHALLCOMPLY WITH THE FOLLOWING UNDERTAKINGS WITH IN THE SPECIFIEDTIME PERIOD: WITHIN 30 DAYS AFTER THE ISSUANCE OF THIS AWC, ANOFFICER OF NSC SHALL CERTIFY TO NASD THAT THE FIRM HASREVIEWED ITS PROCEDURES REGARDING MARKET TIMING AND LATETRADING AND HAS ESTABLISHED SYSTEMS AND PROCEDURESREASONABLY DESIGNED TO ACHIEVE COMPLIANCE WITH THE LAWS,REGULATIONS, AND RULES CONCERNING MARKET TIMING AND LATEREPORTING ACTIVITY AND TO ENSURE THAT PROSPECTUS FUNDEXCHANGE LIMITS ARE ENFORCED. NSC SHALL UNDERTAKE TO REVIEWITS PROCEDURES REGARDING THE PRESERVATION OF ELECTRONIC MAILCOMMUNICATIONS FOR COMPLIANCE WITH NASD RULES AND THEFEDERAL SECURITIES LAWS AND REGULATIONS. WITHIN 30 DAYS OF THEISSUANCE OF THIS AWC, AN OFFICER OF NSC SHALL CERTIFY TO NASD INWRITING THAT IT HAS COMPLETED ITS REVIEW AND THAT IT HASESTABLISHED SYSTEMS AND PROCEDURES REASONABLY DESIGNED TOACHIEVE COMPLIANCE WITH THOSE LAWS, REGULATIONS, AND RULESCONCERNING THE PRESERVATION OF ELECTRONIC MAILCOMMUNICATION.


No

Sanctions Ordered: CensureMonetary/Fine $300,000.00Disgorgement/RestitutionSuspension







WITHOUT ADMITTING OR DENYING THE ALLEGATIONS, NATIONALSECURITIES CORPORATION CONSENTED TO THE DESCRIBED SANCTIONSAND TO THE ENTRY OF FINDINGS; THEREFORE, THE FIRM IS CENSUREDAND FINED IN THE AMOUNT OF $300,000, PAYABLE WITHIN 30 DAYS OF THEISSUANCE OF THIS AWC. NSC IS SUSPENDED FROM OPENING NEWMUTUAL FUND ACCOUNTS FOR 30 DAYS FOR PROSPECTIVE CUSTOMERSWHO ARE NOT NSC CUSTOMERS AS OF THE DATE OF THIS AWC. WITHIN90 DAYS OF THE ISSUANCE OF THIS AWC, NSC SHALL PAYAPPROXIMATELY $299,360 TO COMPENSATE THE FUND COMPANIES ANDRETURN THE ILLICIT PROFITS ENJOYED BY VARIOUS PARTICIPANTS INTHE MARKET TIMING SCHEME. ALSO WITHIN 90 DAYS OF THE ISSUANCEOF THIS AWC, AN OFFICER SHALL NOTIFY NASD THAT THE PAYMENTS TOTHE FUND COMPANIES HAVE BEEN MADE. IN ADDITION, NSC SHALLCOMPLY WITH THE FOLLOWING UNDERTAKINGS WITH IN THE SPECIFIEDTIME PERIOD: WITHIN 30 DAYS AFTER THE ISSUANCE OF THIS AWC, ANOFFICER OF NSC SHALL CERTIFY TO NASD THAT THE FIRM HASREVIEWED ITS PROCEDURES REGARDING MARKET TIMING AND LATETRADING AND HAS ESTABLISHED SYSTEMS AND PROCEDURESREASONABLY DESIGNED TO ACHIEVE COMPLIANCE WITH THE LAWS,REGULATIONS, AND RULES CONCERNING MARKET TIMING AND LATEREPORTING ACTIVITY AND TO ENSURE THAT PROSPECTUS FUNDEXCHANGE LIMITS ARE ENFORCED. NSC SHALL UNDERTAKE TO REVIEWITS PROCEDURES REGARDING THE PRESERVATION OF ELECTRONIC MAILCOMMUNICATIONS FOR COMPLIANCE WITH NASD RULES AND THEFEDERAL SECURITIES LAWS AND REGULATIONS. WITHIN 30 DAYS OF THEISSUANCE OF THIS AWC, AN OFFICER OF NSC SHALL CERTIFY TO NASD INWRITING THAT IT HAS COMPLETED ITS REVIEW AND THAT IT HASESTABLISHED SYSTEMS AND PROCEDURES REASONABLY DESIGNED TOACHIEVE COMPLIANCE WITH THOSE LAWS, REGULATIONS, AND RULESCONCERNING THE PRESERVATION OF ELECTRONIC MAILCOMMUNICATION.

Regulator Statement NSC HAD NO SUPERVISORY SYSTEM OR WRITTEN PROCEDURES THATWERE REASONABLY DESIGNED TO PREVENT OR DETECT LATE TRADINGDESPITE THE FACT THAT: 1) SELLING AGREEMENTS NSC HAD WITHVARIOUS MUTUAL FUND COMPANIES CALLED UPON THE FIRM TOMONITOR SUCH PRACTICES AND ENSURE FAIR PRICING; 2) THE VOLUMEOF MARKET TIMING BUSINESS IN QUESTION CREATED SIGNIFICANT RISKOF LATE TRADING, AND 3) MUTUAL FUND ORDERS UNDERLYING THEMARKET TIMING IN QUESTION WERE REPEATEDLY TRANSMITTED TONSC'S TRADING DESK AFTER 4:00 PM EASTERN TIME RAISING RED FLAGSOF ILLICIT LATE TRADING. NSC'S WRITTEN PROCEDURES WERECOMPLETELY SILENT REGARDING THE PREVENTION AND DETECTION OFDECEPTIVE MARKET TIMING PRACTICES. FROM IN OR ABOUT APRIL 2002THROUGH OCTOBER 2002, NSC, ACTING THROUGH ITS DIRECTOR OFCOMPLIANCE, PERMITTED TWO OF THE NSC BROKERS TO BECOMEDUALLY ASSOCIATED WITH ANOTHER BROKER-DEALER WITHOUT PROPERSUPERVISION. FROM AT LEAST OCTOBER 2000 THROUGH IN OR ABOUTJULY 2003, NSC DID NOT RESERVE AND MAINTAIN ALL INTERNAL E-MAILCOMMUNICATIONS WHERE AS REQUIRED BY SEC RULE 17A-4 WITHRESPECT TO THE OFFICES WHERE THE NSC BROKERS WERE LOCATED.


Allegations: NASD CONDUCT RULES 2110, 3010(A), 3010(B) AND SEC RULE 17A-4 FROMIN OR ABOUT JANUARY 2001 THROUGH AUGUST 2002 (THE "RELEVANTPERIOD"), NATIONAL SECURITIES CORPORATION ("NSC"), ACTINGTHROUGH VARIOUS AGENTS, FACILITATED DECEPTIVE PRACTICESREGARDING MARKET TIMING BY FOUR INSTITUTIONAL CLIENTS OF NSC("HEDGE FUND CLIENTS") USING THREE BROKERS ("NSC BROKER"). NSC'STOP SENIOR OFFICIALS, INCLUDING FIRM'S FORMER PRESIDENT, FORMERCHIEF OPERATING OFFICER, AND FORMER SENIOR VICE PRESIDENT,FAILED TO ENSURE THAT NSC HAD AN ADEQUATE SUPERVISORY SYSTEMAND WRITTEN PROCEDURES DESIGNED TO PREVENT AND DETECT THEDECEPTIVE MARKET TIMING ACTIVITIES AND POSSIBLE LATE TRADING.THEY ALSO FAILED TO RESPOND TO RED FLAGS THAT POINTED TO THEDECEPTIVE CONDUCT BY THE NSC BROKERS AND HEDGE FUND CLIENTS,.FURTHER , NSC FAILED TO RETAIN E-MAILS AS REQUIRED BY SEC RULE17A-4.







Initiated By: NASD


Censure


FINE, RESTITUTION, & SPECIFIC UNDERTAKINGS.



Principal Product Type: Mutual Fund(s)


NASD CONDUCT RULES 2110, 3010(A), 3010(B) AND SEC RULE 17A-4 FROMIN OR ABOUT JANUARY 2001 THROUGH AUGUST 2002 (THE "RELEVANTPERIOD"), NATIONAL SECURITIES CORPORATION ("NSC"), ACTINGTHROUGH VARIOUS AGENTS, FACILITATED DECEPTIVE PRACTICESREGARDING MARKET TIMING BY FOUR INSTITUTIONAL CLIENTS OF NSC("HEDGE FUND CLIENTS") USING THREE BROKERS ("NSC BROKER"). NSC'STOP SENIOR OFFICIALS, INCLUDING FIRM'S FORMER PRESIDENT, FORMERCHIEF OPERATING OFFICER, AND FORMER SENIOR VICE PRESIDENT,FAILED TO ENSURE THAT NSC HAD AN ADEQUATE SUPERVISORY SYSTEMAND WRITTEN PROCEDURES DESIGNED TO PREVENT AND DETECT THEDECEPTIVE MARKET TIMING ACTIVITIES AND POSSIBLE LATE TRADING.THEY ALSO FAILED TO RESPOND TO RED FLAGS THAT POINTED TO THEDECEPTIVE CONDUCT BY THE NSC BROKERS AND HEDGE FUND CLIENTS,.FURTHER , NSC FAILED TO RETAIN E-MAILS AS REQUIRED BY SEC RULE17A-4.


Resolution:

Other Sanctions Ordered: THE FORMER PRESIDENT OF NSC, WAS FINED $25,000 AND SUSPENDEDFROM ASSOCIATING WITH ANY NASD MEMBER IN ANY PRINCIPALCAPACITY FOR A PERIOD OF 30 BUSINESS DAYS. THE SUSPENSIONCOMMENCES WITH THE OPENING OF BUSINESS ON SEPTEMBER 20, 2004,AND CONCLUDES AT THE CLOSE OF BUSINESS ON OCTOBER 29, 2004.NSC SUSPENDED FROM OPENING NEW MUTUAL FUND ACCOUNTS FOR 30CALENDAR DAYS FROM PROSPECTIVE CUSTOMERS WHO ARE NOT NSCCUSTOMERS AS OF AWC EFFECTIVE DATE; SUSPENSION COMMENCES ON09-20-04.

Sanction Details: WITHOUT ADMITTING OR DENYING THE ALLEGATIONS OR FINDINGS,NATIONAL SECURITIES CORPORATION CONSENTED TO THE DESCRIBEDSANCTIONS AND TO THE ENTRY OF FINDINGS; THEREFORE, THE FIRM ISCENSURED AND FINED IN THE AMOUNT OF $300,000, PAYABLE WITHIN 30DAYS OF THE ISSUANCE OF THIS AWC. NSC IS SUSPENDED FROMOPENING NEW MUTUAL FUND ACCOUNTS FOR 30 DAYS FORPROSPECTIVE CUSTOMERS WHO ARE NOT NSC CUSTOMERS AS OF THEDATE OF THIS AWC. WITHIN 90 DAYS OF THE ISSUANCE OF THIS AWC, NSCSHALL PAY APPROXIMATELY $299,360 TO COMPENSATE THE FUNDCOMPANIES AND RETURN THE ILLICIT PROFITS ENJOYED BY VARIOUSPARTICIPANTS IN THE MARKET TIMING SCHEME. ALSO WITHIN 90 DAYS OFTHE ISSUANCE OF THIS AWC, AN OFFICER SHALL NOTIFY NASD THAT THEPAYMENTS TO THE FUND COMPANIES HAVE BEEN MADE. IN ADDITION,NSC SHALL COMPLY WITH THE FOLLOWING UNDERTAKINGS WITH IN THESPECIFIED TIME PERIOD: WITHIN 30 DAYS AFTER THE ISSUANCE OF THISAWC, AN OFFICER OF NSC SHALL CERTIFY TO NASD THAT THE FIRM HASREVIEWED ITS PROCEDURES REGARDING MARKET TIMING AND LATETRADING AND HAS ESTABLISHED SYSTEMS AND PROCEDURESREASONABLY DESIGNED TO ACHIEVE COMPLIANCE WITH THE LAWS,REGULATIONS, AND RULES CONCERNING MARKET TIMING AND LATEREPORTING ACTIVITY AND TO ENSURE THAT PROSPECTUS FUNDEXCHANGE LIMITS ARE ENFORCED. NSC SHALL UNDERTAKE TO REVIEWITS PROCEDURES REGARDING THE PRESERVATION OF ELECTRONIC MAILCOMMUNICATIONS FOR COMPLIANCE WITH NASD RULES AND THEFEDERAL SECURITIES LAWS AND REGULATIONS. WITHIN 30 DAYS OF THEISSUANCE OF THIS AWC, AN OFFICER OF NSC SHALL CERTIFY TO NASD INWRITING THAT IT HAS COMPLETED ITS REVIEW AND THAT IT HASESTABLISHED SYSTEMS AND PROCEDURES REASONABLY DESIGNED TOACHIEVE COMPLIANCE WITH THOSE LAWS, REGULATIONS, AND RULESCONCERNING THE PRESERVATION OF ELECTRONIC MAILCOMMUNICATION. DATE PAID: FIRM OPTED TO PAY 25% OF FINE ONSEPTEMBER 8, 2004, WITH BALANCE PAID IN INSTALLMENTS.








WITHOUT ADMITTING OR DENYING THE ALLEGATIONS OR FINDINGS,NATIONAL SECURITIES CORPORATION CONSENTED TO THE DESCRIBEDSANCTIONS AND TO THE ENTRY OF FINDINGS; THEREFORE, THE FIRM ISCENSURED AND FINED IN THE AMOUNT OF $300,000, PAYABLE WITHIN 30DAYS OF THE ISSUANCE OF THIS AWC. NSC IS SUSPENDED FROMOPENING NEW MUTUAL FUND ACCOUNTS FOR 30 DAYS FORPROSPECTIVE CUSTOMERS WHO ARE NOT NSC CUSTOMERS AS OF THEDATE OF THIS AWC. WITHIN 90 DAYS OF THE ISSUANCE OF THIS AWC, NSCSHALL PAY APPROXIMATELY $299,360 TO COMPENSATE THE FUNDCOMPANIES AND RETURN THE ILLICIT PROFITS ENJOYED BY VARIOUSPARTICIPANTS IN THE MARKET TIMING SCHEME. ALSO WITHIN 90 DAYS OFTHE ISSUANCE OF THIS AWC, AN OFFICER SHALL NOTIFY NASD THAT THEPAYMENTS TO THE FUND COMPANIES HAVE BEEN MADE. IN ADDITION,NSC SHALL COMPLY WITH THE FOLLOWING UNDERTAKINGS WITH IN THESPECIFIED TIME PERIOD: WITHIN 30 DAYS AFTER THE ISSUANCE OF THISAWC, AN OFFICER OF NSC SHALL CERTIFY TO NASD THAT THE FIRM HASREVIEWED ITS PROCEDURES REGARDING MARKET TIMING AND LATETRADING AND HAS ESTABLISHED SYSTEMS AND PROCEDURESREASONABLY DESIGNED TO ACHIEVE COMPLIANCE WITH THE LAWS,REGULATIONS, AND RULES CONCERNING MARKET TIMING AND LATEREPORTING ACTIVITY AND TO ENSURE THAT PROSPECTUS FUNDEXCHANGE LIMITS ARE ENFORCED. NSC SHALL UNDERTAKE TO REVIEWITS PROCEDURES REGARDING THE PRESERVATION OF ELECTRONIC MAILCOMMUNICATIONS FOR COMPLIANCE WITH NASD RULES AND THEFEDERAL SECURITIES LAWS AND REGULATIONS. WITHIN 30 DAYS OF THEISSUANCE OF THIS AWC, AN OFFICER OF NSC SHALL CERTIFY TO NASD INWRITING THAT IT HAS COMPLETED ITS REVIEW AND THAT IT HASESTABLISHED SYSTEMS AND PROCEDURES REASONABLY DESIGNED TOACHIEVE COMPLIANCE WITH THOSE LAWS, REGULATIONS, AND RULESCONCERNING THE PRESERVATION OF ELECTRONIC MAILCOMMUNICATION. DATE PAID: FIRM OPTED TO PAY 25% OF FINE ONSEPTEMBER 8, 2004, WITH BALANCE PAID IN INSTALLMENTS.

Disclosure 26 of 62

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Initiated By: STATE OF MISSOURI


Other


Docket/Case Number: CASE NO AP-04-11



Allegations: 1. FAILURE TO SUPERVISE A REGISTERED AGENT IN VIOLATION OFMISSOURI SECURITIES ACT, OF 2003, 409.4-412(D) 62. VIOLATIONS OF RECORD KEEPING REQUIREMENTS UNDER 409.4-411(C)(1) MISSOURI SECURITIES ACT, OF 2003.3. INABILITY TO REASONABLY SUPERVISE RR'S RECOMENDATIONS INVIOLATION OF 15CSR 30-51.170(E)








Other


CONSENT ORDER


Resolution:


Sanction Details: $13,000 FINE. DATE PAID 01/27/2004


Consent

Disclosure 27 of 62

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Initiated By: FLORIDA


Cease and Desist



Docket/Case Number: 3557-S-1/03




Allegations: FAILURE TO SUPERVISE



Resolution:

Other Sanctions Ordered: NATIONAL SECURITIES AGREES TO UPDATE ITS WRITTEN SUPERVISORYPROCEDURES WITHIN FORTY-FIVE (45)DAYS OF THE DATE OF ENTRY OFTHE FINAL ORDER.

Sanction Details: NA

Regulator Statement FAILURE TO SUPERVISE


Stipulation and Consent







Initiated By: FLORIDA - OFFICE OF FINANCIAL REGULATION





Docket/Case Number: ADMINISTRATIVE PROCEEDING #: 3557-S-1/03



Allegations: AN AUDIT CONDUCTED BY THE FLORIDA OFFICE OF FINANCIALREGULATION IN 2001/2002 FOUND THAT NATIONAL SECURITIESCORPORATION FAILED TO PRESERVE ELECTRONIC COMMUNICATIONS,AND RECORDS REGARDING THE RESOLUTION OF CUSTOMERCOMPLAINTS AT OUR OFFICE OF SUPERVISORY JURISDICTION IN BOCARATON FLORIDA. ADDITIONALLY NATIONAL SECURITIES' 2001-2002WRITTEN SUPERVISORY PROCEDURES PERTAINING TOCORRESPONDENCE WERE DEEMED INSUFFICIENT.



Resolution:

Other Sanctions Ordered: UPDATING OF WSP PRETAINING TO RETENTION OF ALL E-MAILS WITHIN 30DAYS OF FINAL ORDER.

Sanction Details: $15,000 FINE PAID ON 08/20/2003.

Firm Statement IN REFERENCE TO ITEM NO. 10 ABOVE; THE MATTER WAS RESOLVED BY AFINAL ADMINISTRATIVE ORDER.


Order

Disclosure 28 of 62

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Allegations: SEC RULE 11AC1-4 - THE FIRM FAILED TO DISPLAY IMMEDIATELY THECUSTOMER 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 OFFER ANDTHE NATIONAL BEST BID OR OFFER IN SUCH SECURITY, AND THE SIZE OFTHE ORDER REPRESENTED MORE THAN A DE MINIMIS CHANGE INRELATION TO THE SIZE ASSOCIATED WITH ITS BID OR OFFER IN EACHSUCH SECURITY.







Initiated By: NASD






Other Product Type(s): UNKNOWN TYPE OF SECURITIES

Allegations: SEC RULE 11AC1-4 - THE FIRM FAILED TO DISPLAY IMMEDIATELY THECUSTOMER 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 OFFER ANDTHE NATIONAL BEST BID OR OFFER IN SUCH SECURITY, AND THE SIZE OFTHE ORDER REPRESENTED MORE THAN A DE MINIMIS CHANGE INRELATION TO THE SIZE ASSOCIATED WITH ITS BID OR OFFER IN EACHSUCH SECURITY.


Resolution:


Sanction Details: WITHOUT ADMITTING OR DENYING THE ALLEGATIONS, RESPONDENTMEMBER CONSENTED TO THE DESCRIBED SANCTIONS AND TO THEENTRY OF FINDINGS; THEREFORE, THE FIRM IS CENSURED AND FINED$7,500.




Initiated By: NASD



Allegations: DURING THE PERIOD APRIL 3, 2001 THROUGH JUNE 28, 2001,NATIONAL FAILED TO IMMEDIATELY DISPLAY MULTIPLE CUSTOMER LIMITORDERS IN NASDAQ SECURITIES IN ITS PUBLIC QUOTATION.








Censure


FINE





Resolution:


Sanction Details: CENSURE AND FINE OF $7,500



Disclosure 29 of 62

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Initiated By: NATIONAL ASSOCIATION OF SECURITIES DEALERS, INC.



Allegations: NASD RULES IM-1000-1, 1120(A)(B), 2110 AND 3010(B)- WITHOUT ADMITTINGOR DENYING THE ALLEGATIONS, RESPONDENT MEMBER CONSENTED TOTHE ENTRY OF FINDINGS THAT IT WILLFULLY FAILED TO DISCLOSE THECUSTOMER COMPLAINTS ON THE REGISTERED REPRESENTATIVES'FORMS U-4 AND/OR U5 AS REQUIRED; RESPONDENT MEMBER PERMITTEDA REGISTERED PERSON TO CONTINUE TO PERFORM DUTIES AS AREGISTERED PERSON WHEN SUCH PERSON'S REGISTRATION STATUSWITH NASD WAS INACTIVE DUE TO HIS FAILURE TO COMPLETE THEREGULATORY ELEMENT OF NASD'S CONTINUING EDUCATIONREQUIREMENTS; RESPONDENT MEMBER DID NOT MAINTAIN ANADEQUATE SYSTEM TO MONITOR THE COMPLETION OF CONTINUINGEDUCATION MODULES BY ITS REGISTERED PERSONS; RESPONDENTMEMBER FAILED TO ESTABLISH, MAINTAIN, AND/OR ENFORCE ADEQUATEWRITTEN SUPERVISORY PROCEDURES, AND FAILED OTHERWISE TOSUPERVISE ITS ACTIVITIES TO ACHIEVE COMPLIANCE WITH THEAPPLICABLE SECURITIES LAWS AND REGULATIONS.












Resolution:


Sanction Details: CENSURED AND FINED $32500.00




Initiated By: NASD





Allegations: VIOLATION OF NASD CONDUCT RULES 2110 AND IM-1000-1, AND 3010VIOLATION OF NASD MEMBERSHIP AND REGISTRATION RULE 1120WITHOUT ADMITTING OR DENYING THE ALLEGATIONS, THE FIRMCONSENTED TO ENTRY O FFINDINGS THAT IT FAILED TO DISCLOSECUSTOMER COMPLAINTS ON THE REGEISTERED REPRESENTATIVES'FORMS U-4 AND/OR U-5 AS REQUIRED, THAT IT PERMITTED A REGISTEREDPERSON TO CONTINUE TO PERFORM DUTIES AS A REGISTERED PERSONWHEN SUCH PERSON'S REGISTRATION STATUS WITH NASD WAS INACTIVEDUE TO FAILURE TO COMPLETE REGULATORY ELEMENT CONTINUINGEDUCATION AND THAT WITH RESPECT TO THE ALLEGATIONS SET FORTHABOVE, THE FIRM DID NOT MAINTAIN AN ADEQUATE SYSTEM TO MONITORTHE COMPLETEION OF CE MODULES BY REGISTERED PERSONS ANDTHAT IT FAILED TO ESTABLISH, MAINTAI, AND/OR ENFORCE ADEQUATEWRITTEN SUPERVISORY PROCEDURES AND FAILED TO SUPERVISE ITSACTIVITIES TO ACHIEVE COMPLIANCE WITH APPLICABLE SECURITIESLAWS AND REGULATIONS.








Other


AWC/CENSURE AND FINE



Resolution:


Sanction Details: CENSURED AND FINED $32500.00

Firm Statement FIRM HAS REQUESTED INSTALLMENT PAYMENTS.



Disclosure 30 of 62

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Other Product Type(s): UNKNOWN TYPE OF SECURITIES

Allegations: NASD RULES 2110, 6240(A)(3) AND 6240(B)(3) - WITHOUT ADMITTING ORDENYING THE ALLEGATIONS, THE RESPONDENT MEMBER CONSENTED TOTHE ENTRY OF FINDINGS THAT IT FAILED TO REPORT TO FIXED INCOMEPRICING SYSTEM ("FIPS") TRANSACTIONS IN FIPS SECURITIES WITHINFIVE MINUTES AFTER EXECUTION. SUCH CONDUCT CONSTITUTES APATTERN OR PRACTICE OF THE LATE REPORTING AND IS CONSIDEREDCONDUCT INCONSISTENT WITH HIGH STANDARDS OF COMMERCIALHONOR AND JUST AND EQUITABLE PRINCIPALS OF TRADE. THERESPONDENT MEMBER ALSO INCORRECTLY REPORTED TO FIPSTRANSACTIONS IN FIPS SECURITIES AND HIGH YIELD SECURITIES THATTHE FIRM SHOULD NOT HAVE REPORTED TO FIPS UNDER THE FIPSRULES.









Resolution:


Sanction Details: A CENSURE AND A FINE OF $7,500.




Initiated By: NASD








Allegations: VIOLATION OF NASD CONDUCT RULE 2110; VIOLATION OF NASDMARKETPLACE RULES 6240(A)(3)AND S6240(B)(3). LATE AND INCORRECTREPORTING OF TRANSACTIONS IN FIPS SECURITIES



Resolution:


Sanction Details: CENSURE AND FINE OF $7500

Firm Statement CENSURE AND FINE OF $7500.00



Disclosure 31 of 62

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Disclosure 31 of 62









Allegations: NASD RULES 3110, 6620(A) AND SEC RULES 17A-3 AND 17A-4 - WITHOUTADMITTING OR DENYING THE ALLEGATIONS, THE RESPONDENTCONSENTED TO THE ENTRY OF FINDINGS THAT IT FAILED TO PRESERVEFOR A PERIOD OF NOT LESS THAN THREE YEARS, THE FIRST TWO IN ANACCESSIBLE PLACE, THE MEMORANDUM OF BROKERAGE ORDERS. THERESPONDENT ALSO FAILED: (1) TO SHOW THE CORRECT TIME OFEXECUTION ON THE MEMORANDUM OF BROKERAGE ORDERS; (2) TOSHOW THE CORRECT NUMBER OF SHARES ON THE MEMORANDUM OFBROKERAGE ORDERS; AND (3) TO SHOW THE CORRECT PRICE OFEXECUTION ON THE MEMORANDUM OF BROKERAGE ORDERS. INADDITION TO THE ABOVE, THE RESPONDENT FAILED, WITHIN 90 SECONDSAFTER EXECUTION, TO TRANSMIT THROUGH ACT LAST SALE REPORTS OFTRANSACTIONS IN OTC EQUITY SECURITIES AND FAILED TO DESIGNATETHROUGH ACT SUCH LAST SALE REPORTS AS LATE.



Resolution:


Sanction Details: A CENSURE AND A $7,500 FINE (COMPOSED OF A $5,000 FINE FOR THERECORD KEEPING VIOLATIONS AND A $2,500 FINE FOR THE TRANSACTIONREPORTING VIOLATIONS).



iReporting Source:







Initiated By: NASD


Censure


FINE.





Allegations: VIOLATIONS OF SEC RULE 17A-4 AND NASD RULE 3010, INCLUDINGKEEPING THE MEMORANDUM OF ORDERS FOR NOT LESS THAN 3 YEARS.VIOLATIONS OF SEC RULE 17A-3 AND NASD RULE 3110, INCLUDINGFAILURE TO SHOW CORRECT TIME AND PRICE OF EXECUTION ANDNUMBER OF SHARES ON ORDER TICKETS. VIOLATIONS OF NASD RULE6620(A), INCLUDING FAILURE TO TRANSMIT TO ACT AND/OR LATETRANSMISSION.



Resolution:


Sanction Details: TOTAL AMOUNT OF FINE PAID IN FULL IN MAY 2002.

Firm Statement THE FIRM BELIEVES IT HAS MADE THE NECESSARY PROCEDURALCHANGES AND PROVIDED THE NECESSARY TRAINING TO TRADINGPERSONNEL TO KEEP THIS TYPE OF ERROR FROM OCCURRING IN THEFUTURE.



Disclosure 32 of 62

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Allegations: 05-24-01, SEC RULE 11AC1-4,NASD RULES 2110, 2860(B)(5), 3010, 3360, 3370- RESPONDENT MEMBER FAILED TO REPORT ANY APPLICABLE OPTIONSPOSITIONS;FAILED TO UPDATE ITS QUOTES TO REFLECT ITS CUSTOMERS'LIMIT ORDERS;INCORRECTLY REPORTED SHORT POSITIONS TO THENASD;EXECUTED SHORT SALE ORDERS IN CERTAIN SECURITIES ANDFAILED TO MAKE AN AFFIRMATIVE DETERMINATION PRIOR TO EXECUTINGSUCH TRANSACTIONS; AND FAILED TO HAVE ADEQUATE WRITTENSUPERVISORY PROCEDURES TO ASSURE COMPLIANCE WITH APPLICABLESECURITIES LAWS AND REGULATIONS CONCERNING PURCHASES OF "B"SHARE MUTUAL FUNDS AND FAILED TO CREATE AND IMPLEMENT ASUPERVISORY SYSTEM DESIGNED TO ACHIEVE COMPLIANCE WITHAPPLICABLE SECURITIES LAWS AND REGULATIONS REGARDING TIMELYAND ACCURATE REPORTING OF LARGE OPTION POSITIONS,DETECTIONOF POSSIBLE ERRORS OR OMISSIONS OF REQUIRED QUOTE UPDATES,SHORT INTEREST REPORTING AND FILING OF AN ACCURATE FORM NS-1,AND INSURING THAT AN AFFIRMATIVE DETERMINATION IS MADE PRIOR TOEFFECTING A SHORT SALE.














05-24-01, SEC RULE 11AC1-4,NASD RULES 2110, 2860(B)(5), 3010, 3360, 3370- RESPONDENT MEMBER FAILED TO REPORT ANY APPLICABLE OPTIONSPOSITIONS;FAILED TO UPDATE ITS QUOTES TO REFLECT ITS CUSTOMERS'LIMIT ORDERS;INCORRECTLY REPORTED SHORT POSITIONS TO THENASD;EXECUTED SHORT SALE ORDERS IN CERTAIN SECURITIES ANDFAILED TO MAKE AN AFFIRMATIVE DETERMINATION PRIOR TO EXECUTINGSUCH TRANSACTIONS; AND FAILED TO HAVE ADEQUATE WRITTENSUPERVISORY PROCEDURES TO ASSURE COMPLIANCE WITH APPLICABLESECURITIES LAWS AND REGULATIONS CONCERNING PURCHASES OF "B"SHARE MUTUAL FUNDS AND FAILED TO CREATE AND IMPLEMENT ASUPERVISORY SYSTEM DESIGNED TO ACHIEVE COMPLIANCE WITHAPPLICABLE SECURITIES LAWS AND REGULATIONS REGARDING TIMELYAND ACCURATE REPORTING OF LARGE OPTION POSITIONS,DETECTIONOF POSSIBLE ERRORS OR OMISSIONS OF REQUIRED QUOTE UPDATES,SHORT INTEREST REPORTING AND FILING OF AN ACCURATE FORM NS-1,AND INSURING THAT AN AFFIRMATIVE DETERMINATION IS MADE PRIOR TOEFFECTING A SHORT SALE.


Resolution:


Sanction Details: CENSURED AND FINED $35,000

Regulator Statement .




Allegations: FROM THE PERIOD 4/1/99 TO 5/20/99, THE FIRM VIOLATED CONDUCT RULE2860(B)(5) RELATING TO OPTIONS POSITIONS REPORTING. FROM 4/7/99 TO4/8/99, FIRM FAILED TO UPDATE QUOTES TO REFLECT CUSTOMER LIMITORDERS IN VIOLATION OF SEC RULE 11AC1-4. FROM 1/15/00 TO 6/15/00FIRM INCORRECT REPORTED SHORT POSITIONS TO NASD IN VIOLATIONOF CONDUCT RULE 3360. FROM 4/1/99 TO 4/19/99 FIRM FAILED TO MAKENECESSARY AFFIRMATIVE DETERMATIONS PRIOR TO EXECUTIONS OFSHORT SALES IN VIOLATION OF CONDUCT RULE 3370. IN VIOLATION OFCONDUCT RULES 2110 AND 3010 FIRM'S WRITTEN SUPERVISORYPROCEDURES DID NOT INCLUDE ADEQUATE PROCEDURES TO ASSURECOMPLIANCE WITH MUTUAL FUND B SHARES PURCHASES, THE FIRM DIDNOT CREATE A SUPERVISORY SYSTEM REASONABLY DESIGNED TOCOMPLY WITH REGULATIONS REGARDING 1)REPORTING OF OPTIONSPOSITIONS, 2) QUOTE UPDATES, 3) SHORT INTEREST REPORTING, 4)MAKING AN AFFIRMATIVE DETERMINATION PRIOR TO EFFECTING A SHORTSALE. FIRM HAS TAKEN APPROPRIATE CORRECTIVE ACTION.







Initiated By: NASD


Censure


FINE.





Allegations: FROM THE PERIOD 4/1/99 TO 5/20/99, THE FIRM VIOLATED CONDUCT RULE2860(B)(5) RELATING TO OPTIONS POSITIONS REPORTING. FROM 4/7/99 TO4/8/99, FIRM FAILED TO UPDATE QUOTES TO REFLECT CUSTOMER LIMITORDERS IN VIOLATION OF SEC RULE 11AC1-4. FROM 1/15/00 TO 6/15/00FIRM INCORRECT REPORTED SHORT POSITIONS TO NASD IN VIOLATIONOF CONDUCT RULE 3360. FROM 4/1/99 TO 4/19/99 FIRM FAILED TO MAKENECESSARY AFFIRMATIVE DETERMATIONS PRIOR TO EXECUTIONS OFSHORT SALES IN VIOLATION OF CONDUCT RULE 3370. IN VIOLATION OFCONDUCT RULES 2110 AND 3010 FIRM'S WRITTEN SUPERVISORYPROCEDURES DID NOT INCLUDE ADEQUATE PROCEDURES TO ASSURECOMPLIANCE WITH MUTUAL FUND B SHARES PURCHASES, THE FIRM DIDNOT CREATE A SUPERVISORY SYSTEM REASONABLY DESIGNED TOCOMPLY WITH REGULATIONS REGARDING 1)REPORTING OF OPTIONSPOSITIONS, 2) QUOTE UPDATES, 3) SHORT INTEREST REPORTING, 4)MAKING AN AFFIRMATIVE DETERMINATION PRIOR TO EFFECTING A SHORTSALE. FIRM HAS TAKEN APPROPRIATE CORRECTIVE ACTION.


Resolution:


Sanction Details: FINE OF $35,000.

Firm Statement FIRM CORRECTED INCIDENTS MENTIONED IN AWC AND FEELS THATSIMILAR INCIDENTS ARE UNLIKELY TO OCCUR IN THE FUTURE.CORRECTIONS HAVE INCLUDED A BACK OFFICE COMPUTER SYSTEMCHANGOVER, INSTALLATION OF BRASS, AND UPDATED WRITTENSUPERVISORY PROCEDURES.



Disclosure 33 of 62

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Allegations: FLORIDA FOUND THAT THE FIRM HAD NOT PROPERLY REGISTERED ABRANCH OFFICE IN THAT STATE, IN ACCORDANCE WITH CHAPTER 517,FLORIDA STATUTES.



Resolution:


Sanction Details: $5000 FINE PAID TO THE SECURITIES ANTIFRAUD TRUST FUND ON MARCH19, 2001.

Firm Statement THE FIRM DID NOT NOTIFY FLORIDA PROMPTLY OF A BRANCH OFFICEESTABLISHED IN THE STATE. THE FIRM MISTAKENLY BELIEVED THAT ONLYBRANCH OFFICES CONSISTING OF TWO OR MORE BROKERS REQUIREDMANUAL NOTIFICATION TO THE STATE. THE FIRM HAS AMENDED ITSREGISTRATION PROCEDURES TO ACCOUNT FOR DIFFERENCES IN STATESTATUES WITH REGARDS TO BRANCHES.



Disclosure 34 of 62

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Initiated By: SC Securities Division

Allegations: The Securities division issued anAdministrative Complaint on 11/18/98 for sales and operationalpractices as they related to one or more client accounts in SC.







Initiated By: SC Securities Division






Principal Product Type:



Resolution:


Sanction Details: In order to resolve the Complaint, Nationalagreed to make a $9,500.00 payment to the State forreimbursement of enforcement costs and will take such steps asit deems necessary to review new account forms to preventviolations of the Act.

Regulator Statement CONTACT: SC SECURITIES DIVISION 803-734-4731

Sanctions Ordered:

Consent


Initiated By: SOUTH CAROLINA


Other





Allegations: THE DIVISON FOUND THE FOLLOWING ON AT LEAST ONE OCCASION: ACLIENT NEW ACCOUNT WAS NOT FILLED OUT COMPLETELY, AND ANAGENT OF THE FIRM DID BUSINESS PRIOR TO BECOMING REGISTERED INS.C.








Other


CONSENT


Resolution:

Other Sanctions Ordered: NATIONAL REIMBURSED THE STATE OF SOUTH CAROLINA $9500.

Sanction Details: THE $9500 WAS SPECIFICALLY TO BE USED FOR REIMBURSEMENT OFCOSTS ASSOCIATED WITH ENFORCING THE STATE UNIFORM SECURITIESACT. THIS REIMBURSEMENT WAS PAID ON JANUARY 7, 1999.

Sanctions Ordered:

Consent

Disclosure 35 of 62

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Allegations: (SEC RULE 11AC1-1(C)(5) AND NASD CONDUCT RULES 2110 AND3010.)RESPONDENT MEMBER: ENTERED PRICED ORDERS INTOSELECTNET BROADCAST THAT WERE PRICED BETTER THAN THE FIRM'SPUBLIC QUOTE WITHOUT REFLECTING EACH SUCH ORDER IN THE FIRM'SPUBLIC QUOTE; AND FAILED TO ESTABLISH, MAINTAIN, AND ENFORCEADEQUATE WRITTEN SUPERVISORY PROCEDURES DESIGNED TOACHIEVE COMPLIANCE WITH THE APPLICABLE SECURITIES LAWS ANDREGULATIONS CONCERNING THE SEC'S ORDER HANDLING RULES ANDNASD MARKETPLACE RULE 4613.



Resolution: Acceptance, Waiver & Consent(AWC)







Other Sanctions Ordered: NONE

Sanction Details: WITHOUT ADMITTING OR DENYING THE ALLEGATIONS, NATIONALSECURITIES CORPORATION CONSENTED TO THE DESCRIBED SANCTIONAND TO THE ENTRY OF FINDINGS, THEREFORE, THE FIRM IS FINED$3,000.00.



Initiated By: NASD.


Other



Docket/Case Number: NONE



Allegations: VIOLATIONS OF SEC RULE 11AC-1-1(C)(5) AND NASD CONDUCT RULES 2110AND 3010.



Resolution:


Sanction Details: FINE OF $2000 FPR ECN RULE AND $1000 FOR WRITTEN SUPERVISORYPROCEDURES.

Firm Statement THE FIRM HAS RECENTLY BEGUN UTILIZING A MORE AUTOMATED SYSTEMFOR TRADE REPORTING AND HAS IMPLEMENTED NEW SUPERVISORYPROCEDURES.



Disclosure 36 of 62

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Allegations: LETTER OF ACCEPTANCE, WAIVER AND CONSENT NO. CMS990080 AWC.

ON SEPTEMBER 14, 1998, NATIONAL SECURITIES COPRORATION (NATL)WAS NOTIFIED THAT THE LETTER OF ACCEPTANCE, WAIVER ANDCONSENT(AWC) THAT IT SUBMITTED WAS ACCEPTED BY NASD REGULATION'SDEPARTMENT OF ENFORCEMENT AND THE NATIONAL ADJUDICATORYCOUNCIL. THE AWC ALLEGES THAT THE FOLLOWING ACTIVITYOCCURRED:

NATL FAILED TO CONTEMPORANEOUSLY EXECUTE FOUR CUSTOMERLIMITORDERS AFTER IT EXECUTED TRANSACTIONS FOR ITS OWN MARKETMAKINGACCOUNT. THIS CONDUCT CONSTITUTES A VIOLATION OF NASDCONDUCTRULE 2110 AND IM2110-2.

NATL FAILED TO ESTABLISH AND MAINTAIN WRITTEN SUPERVISORYPROCEDURES REASONABLY DESIGNED TO ACHIEVE COMPLIANCE WITHTHEAPPLICABLE RULES REGARDING THE LIMIT ORDER PROTECTIONINTERPRETATION IN THAT THE PROCEDURES DID NOT SPECIFY THEFREQUENCY OF COMPLIANCE REVIEWS AND WERE NOT DETAILEDENOUGH TOENSURE AN ADEQUATE SUPERVISORY SYSTEM. THIS CONDUCTCONSTITUTES A VIOLATION OF NASD CONDUCT RULES 2110 AND 3010.

NATL WAS CENSURED AND FINED $2,000.









Resolution:


Sanction Details: CAF




Initiated By: NASD.


Censure


FINE.


Docket/Case Number: CMS980080 AWC



Allegations: VIOLATIONS OF NASD CONDUCT RULE 2210 AND IM- 2110-2, AND AVIOLATION OF NASD MARKETPLACE RULE 3010(A).



Resolution:


Sanction Details: FINE OF $1000 FOR THE SUPERVISION VIOLATION AND FINE OF $1000 FORTHE LIMIT ORDER PROTECTION INTERPRETATION VIOLATION.


Consent

Disclosure 37 of 62

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Initiated By: ARIZONA.


Cease and Desist



Docket/Case Number: S-2147-153452



Allegations: INFORMATION UNAVAILABLE.



Resolution:


Sanction Details: CEASE & DESIST.

Firm Statement NO DETAILS AVAILABLE.

Sanctions Ordered: Cease and Desist/Injunction

Decision

Disclosure 38 of 62

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Allegations: (NASD RULES 2110, 2310, 2740 AND MARKETPLACE RULES 4632, 4642,6130(B) AND 6420 - RESPONDENT MEMBER SOLD SHARES OF AN INITIALPUBLIC OFFERING, WHICH SHARES SOLD AT A PREMIUM IN THESECONDARY MARKET (A "HOT ISSUE"), WITHOUT OBTAININGINFORMATION ON ALL PERSONS HAVING A BENEFICIAL INTEREST IN THEACCOUNTS OR OBTAINING ASSURANCES OF COUNSEL OR ACCOUNTANTENSURING NO RESTRICTED INDIVIDUALS HAVE A BENEFICIAL INTEREST INTHE ACCOUNTS, IN CONTRAVENTION OF THE FREE-RIDING ANDWITHHOLDING INTERPRETATION OF CONDUCT RULE 2110(F)(1);RESPONDENT MEMBER,ACTING THROUGH AN INDIVIDUAL, INCONNECTION WITH THESALE OF SECURITIES WHICH WERE PART OF FIXED PRICE OFFERINGS,GRANTED SELLING CONCESSIONS, DISCOUNTS OR OTHER ALLOWANCESTO PUBLIC CUSTOMERS, PERMITTING CERTAIN CUSTOMERS TO OBTAINPRICES BELOW THE PUBLIC OFFERING PRICE; RESPONDENT MEMBERIMPROPERLY REPORTED TRANSACTIONS TO ACT AND FAILED TO ACCEPTTRANSACTIONS WITHIN 20 MINUTES OF THE TRADE BEING REPORTED TOACT; AND,RESPONDENT MEMBER FAILED TO ESTABLISH, MAINTAIN ANDENFORCE WRITTEN PROCEDURES REASONABLY DESIGNED TO ACHIEVECOMPLIANCE WITH APPLICABLE SECURITIES LAWS AND REGULATIONS).













Other Product Type(s): IPOS

(NASD RULES 2110, 2310, 2740 AND MARKETPLACE RULES 4632, 4642,6130(B) AND 6420 - RESPONDENT MEMBER SOLD SHARES OF AN INITIALPUBLIC OFFERING, WHICH SHARES SOLD AT A PREMIUM IN THESECONDARY MARKET (A "HOT ISSUE"), WITHOUT OBTAININGINFORMATION ON ALL PERSONS HAVING A BENEFICIAL INTEREST IN THEACCOUNTS OR OBTAINING ASSURANCES OF COUNSEL OR ACCOUNTANTENSURING NO RESTRICTED INDIVIDUALS HAVE A BENEFICIAL INTEREST INTHE ACCOUNTS, IN CONTRAVENTION OF THE FREE-RIDING ANDWITHHOLDING INTERPRETATION OF CONDUCT RULE 2110(F)(1);RESPONDENT MEMBER,ACTING THROUGH AN INDIVIDUAL, INCONNECTION WITH THESALE OF SECURITIES WHICH WERE PART OF FIXED PRICE OFFERINGS,GRANTED SELLING CONCESSIONS, DISCOUNTS OR OTHER ALLOWANCESTO PUBLIC CUSTOMERS, PERMITTING CERTAIN CUSTOMERS TO OBTAINPRICES BELOW THE PUBLIC OFFERING PRICE; RESPONDENT MEMBERIMPROPERLY REPORTED TRANSACTIONS TO ACT AND FAILED TO ACCEPTTRANSACTIONS WITHIN 20 MINUTES OF THE TRADE BEING REPORTED TOACT; AND,RESPONDENT MEMBER FAILED TO ESTABLISH, MAINTAIN ANDENFORCE WRITTEN PROCEDURES REASONABLY DESIGNED TO ACHIEVECOMPLIANCE WITH APPLICABLE SECURITIES LAWS AND REGULATIONS).


Resolution:


Sanction Details: WITHOUT ADMITTING OR DENYING THE ALLEGATIONS, NATIONALSECURITIES CORPORATION CONSENTED TO THE DESCRIBED SANCTIONAND TO THE ENTRY OF FINDINGS, THEREFORE, THE FIRM IS FINED$51,000.




Initiated By: NASD.

Allegations: ALLEGED THAT NATIONAL VIOLATED CONDUCT RULES 2740 AND 2110 BYSELLING SECURITIES BELOW THE PUBLIC OFFERING PRICE IN WHAT WASALLEGED TO BE A FIXED PRICE OFFERING. ALSO, ALLEGED THATNATIONAL VIOLATED CONDUCT RULES 2110 AND 2310 AND MARKETPLACERULES 4632, 4642, 6130, AND 6420, INCLUDING TRADE REPORTINGVIOLATIONS AND FAILURE TO ESTABLISH, MAINTAIN AND ENFORCEWRITTEN SUPERVISORY PROCEDURES.







Initiated By: NASD.


Censure


FINE.






Resolution:


Sanction Details: FINED $51,000.

Firm Statement NATIONAL DENIES THE CITED TRANSACTIONS INVOLED FIXED PRICEOFFERINGS. THESE ACTIONS WERE CONSISTENT WITH THE ADVICE OFREPUTABLE COUNSEL, AND IN ACCORD WITH LONG-STANDING INDUSTRYPRACTICE. NATIONAL HAS RECENTLY BEGUN UTILIZING A MOREAUTOMATED SYSTEM FOR TRADE REPORTING AND HAS IMPLEMENTEDNEW SUPERVISORY PROCEDURES.


Other

Disclosure 39 of 62

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Initiated By: OREGON.


Cease and Desist


Docket/Case Number: E7-07



Allegations: EMPLOYED SALESPERSON PRIOR TO REGISTRATION.








Cease and Desist


MONETARY/FINE.


Resolution:


Sanction Details: PAID FINE OF $4100 ON 3/13/1987.

Sanctions Ordered: Monetary/FineCease and Desist/Injunction

Decision

Disclosure 40 of 62

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Initiated By: CONNECTICUT DEPT. OF BANKING




Docket/Case Number: CO-98-5172




Allegations: A JOINT EXAMINATION WITH THE NEW JERSEYBUREAU OF SECURITIES OF THE FIRM'S MELVILLE, NY BRANCH OFFICEALLEGEDLY REVEALED THAT CERTAIN BUSINESS EXPENSES WERE NOTPAIDDIRECTLY BY THE FIRM AND THEREFORE WERE NOT CARRIED ON THEFIRM'S BOOKS; AND THAT CERTAIN AGENTS EMPLOYED AT THE MELVILLE,NY LOCATION USED UNREVIEWED SCRIPTED SALES PRESENTATIONSTHATWERE MATERIALLY FALSE AND MISLEADING.



Resolution: Consent








Sanction Details: CONSENT ORDER ENTERED JOINTLY WITH THE NEW JERSEYBUREAU OF SECURITIES ON JULY 17, 1998. PURSUANT TO THE CONSENTORDER, THE FIRM AGREED TO CEASE AND DESIST FROM VIOLATIVECONDUCT; RETAIN A CONSULTANT TO REVIEW FIRM POLICIES ANDPROCEDURES IN THE AREAS OF AGENT RECRUITING AND TRAINING,CONTINUING EDUCATION, AND ORGANIZATION STRUCTURE; IMPLEMENTTHECONSULTANT'S RECOMMENDATIONS WITHIN 45 DAYS AFTER RECEIVINGTHECONSULTANT'S REPORT; IMPLEMENT A TELEPHONE TAPKING ANDMONITORING SYSTEM FOR THE MELVILLE, NY OFFICE WITHIN 60 DAYS;AND PAY $72,500 OF A $100,000 FINE UPON ENTRY OF THE CONSENTORDER, SUCH AMOUNT TO BE DIVIDED EQUALLY BETWEEN THE STATESOFCONNECTICUT AND NEW JERSEY. THE CONSENT ORDER STIPULATEDTHATIF THE FIRM COMPLIED WITH THE TELEPHONE TAPING AND MONITORINGSYSTEM REQUIREMENT FOR THE MELVILLE SITE, THE $27,500 PENALTYBALANCE WOULD BE SUSPENDED AT A RATE OF 50% FOR EACH DOLLARTHEFIRM SPENT ON THE TELEPHONE SYSTEM, UP TO A MAXIMUM COST OF$55,000. IF THE TELEPHONE SYSTEM COST LESS THAN $55,000, THEREMAINING AMOUNT OF THE FINE WOULD BE PAID EQUALLY TOCONNECTICUT AND NEW JERSEY ON THE 61ST DAY AFTER THE CONSENTORDER WAS ISSUED.

Regulator Statement CONTACT: ERIC WILDER, 860-240-8232.



Initiated By: NEW JERSEY AND CONNECTICUT.


Allegations: CERTAIN EXPENSES RELATING TO THE CONDUCT OF THE MELVILLE, NYOFFICE WERE NOT PAID BY NATIONAL OR ON NATIONAL'S BOOKS.AGENTS EMPLOYED SALES METHODS USING SCRIPTS WHICH HAD NOTBEEN REVIEWED OR APPROVED BY MANAGEMENT AND WHICHCONTAINED FALSE AND MISLEADING STATEMENTS.








Other


MONETARY/FINE.


Docket/Case Number: NJ #: T-98-02. CT#: CO-98-5172.




Resolution:


Sanction Details: NATIONAL WAS FINED $100,000, $36,250 WAS CIVIL MONETARY PENALTIESAND $36,250 WAS A FINE. THE BALANCE WAS TO BE APPLIED AT %50TOWARD A MANDATORY TELEPHONE MONITORING SYSTEM IN THEMELVILLE, NY BRANCH OFFICE.

Sanctions Ordered: Monetary/Fine

Other

Disclosure 41 of 62

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Initiated By: MISSOURI SECRETARY OF STATE/SECURITIESDIVISION




Docket/Case Number: AO-98-15




Allegations: ENGAGED IN VIOLATIONS OF SECTION 409.204(A),RSMO CUMULATIVE SUPP. 1997.


Resolution: Decision107©2020 FINRA. All rights reserved. Report about NATIONAL SECURITIES CORPORATION






Resolution:


Sanction Details: SUMMARY SUSPENSION OF MISSOURI REGISTRATION.

Regulator Statement BASED ON CONSENT ORDER ENTERED INTO BETWEENNATIONAL SECURITIES CORPORATION AND STATES OF NEW JERSEY ANDCONNECTICUT, AS WELL AS MISSOURI'S CEASE AND DESIST ORDERRECENTLY ISSUED AGAINST THE BOSTON GROUP, L.P., NATIONAL'SREGISTRATION WAS SUMMARILY SUSPENDED TO PREVENT THE MASSTRANSFER OF BOSTON GROUP AGENTS TO NATIONAL AS PART OFACQUISITION OF ASSETS OF BOSTON GROUP BY NATIONAL'S PARENTCOMPANY. CONTACT: JOHN ELLIS (573) 751-4704

Sanctions Ordered: Suspension

Decision


Initiated By: MISSOURI.


Suspension






Allegations: MISSOURI ISSUED AN ORDER OF SUMMARY SUSPENSION AGAINSTNATIONAL AFTER NATIONAL ACCEPTED THE MASS TRANSFER OF AGENTS,WHO, ALONG WITH THEIR PRIOR FIRM, WERE THE SUBJECT OF A CEASEAND DESIST ORDER THERE.



Resolution:


Sanction Details: MISSOURI QUICKLY LIFTED THIS SUSPENSION WITH RESPECT TO ALLNATIONAL BROKERS EXCEPT THE NEW TRANSFEREES AND THOSEBROKERS WORKING OUT OF NATIONAL'S MELVILLE, NEW YORK OFFICE.


Other






Sanction Details: MISSOURI QUICKLY LIFTED THIS SUSPENSION WITH RESPECT TO ALLNATIONAL BROKERS EXCEPT THE NEW TRANSFEREES AND THOSEBROKERS WORKING OUT OF NATIONAL'S MELVILLE, NEW YORK OFFICE.

Disclosure 42 of 62

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Initiated By: AL




Docket/Case Number: SC-97-0011




Allegations: ON APRIL 11, 1997 NATIONAL SECURITIESCORPORATION WAS ORDERED TO SHOW CAUSE WHY ITS REGISTRATIONSHOULD NOT BE REVOKED FOR EMPLOYING AN UNREGISTERED AGENTANDALLOWING THAT AGENT TO CONDUCT SECURITIES TRANSACTIONS INTOTHESTATE OF ALABAMA WITHOUT BENEFIT OF REGISTRATION. NATIONALSECURITIES CORPORATION'S RESPONSE TO THAT ORDER WASSUFFICIENTTO CAUSE THE ISSUANCE OF CONSENT ORDER CO-97-0011. NATIONALSECURITIES CORPORATION WAS ORDERED TO ENSURE THAT PROPERPROCEDURES ARE ENACTED TO PRECLUDE FUTURE VIOLATIONS OF THEALABAMA SECURITIES ACT AND ORDERED TO PAY AN ADMINISTRATIVEASSESSMENT OF $750.00 AND $250.00 AS PARTIAL REIMBURSEMENT OFTHE INVESTIGATIVE COSTS. THIS CONSENT ORDER RESOLVES SHOWCAUSEORDER SC-97-0011.



Resolution:

Sanctions Ordered:

Consent







Sanction Details: ON APRIL 11, 1997 NATIONAL SECURITIES CORPORATIONWAS ORDERED TO SHOW CAUSE WHY ITS REGISTRATION SHOULD NOTBEREVOKED FOR EMPLOYING AN UNREGISTERED AGENT AND ALLOWINGTHATAGENT TO CONDUCT SECURITIES TRANSACTIONS INTO THE STATE OFALABAMA WITH OUT BENEFIT OF REGISTRATION. NATIONAL SECURITIESCORPORATION'S RESPONSE TO THAT ORDER WAS SUFFICIENT TO CAUSETHE ISSUANCE OF CONSENT ORDER CO-97-0011. NATIONAL SECURITIESCORPORATION WAS ORDERED TO ENSURE THAT PROPER PROCEDURESAREENACTED TO PRECLUDE FUTURE VIOLATIONS OF THE ALABAMASECURITIESACT AND ORDERED TO PAY AN ADMINISTRATIVE ASSESSMENT OF $750.00AND $250.00 AS PARTIAL REIMBURSEMENT OF THE INVESTIGATIVE COST.THIS CONSENT ORDER RESOLVES SHOW CAUSE ORDER SC-97-0011.

Regulator Statement SAME AS ALLEGATIONS AND RESULTS. CONTACT:ALABAMA SECURITIES COMMISSION (334)242-2984


Initiated By: ALABAMA.


Other


MONETARY/FINE.


Docket/Case Number: SC-97-0011



Allegations: OFFER OR SALE BY UNLICENSED/UNREGISTERED PERSON.FAILURE TO SUPERVISE.



Resolution:


Consent







Sanction Details: PAID $1000 FINE.

Firm Statement CONTACT: ALABAMA SECURITIES COMMISSION, (334)242-2984.

Disclosure 43 of 62

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Initiated By: CONNECTICUT DEPT. OF BANKING




Docket/Case Number: ST-97-3088-S




Allegations: FROM AT LEAST 5/95, THE FIRM TRANSACTEDBUSINESS FROM AN UNREGISTERED BRANCH OFFICE IN CONNECTICUT INPURPORTED VIOLATION OF SECTION 36B-6(d) OF THE CONNECTICUTUNIFORM SECURITIES ACT.



Resolution:


Sanction Details: STIPULATION AND AGREEMENT EXECUTED 2/4/97. THESTIPULATION AND AGREEMENT REQUIRED THAT THE FIRM 1) REVIEW,REVISE AND IMPLEMENT SUPERVISORY PROCEDURES DESIGNED TOENSUREREGULATORY COMPLIANCE; 2)REFRAIN FROM VIOLATIVE CONDUCT; 3)FOR2 YEARS, REPORT TO THE AGENCY ON A QUARTERLY BASIS CONCERNINGANY COMPLAINTS, ACTIONS OR PROCEEDINGS INVOLVING CONNECTICUTRESIDENTS; AND 4) PAY $1,000 TO THE STATE, $500 OF WHICHCONSTITUTED AN ADMINISTRATIVE PENALTY AND $500 OF WHICHREPRESENTED REIMBURSEMENT FOR AGENCY INVESTIGATIVE COSTS.

Sanctions Ordered: Monetary/Fine $500.00







STIPULATION AND AGREEMENT EXECUTED 2/4/97. THESTIPULATION AND AGREEMENT REQUIRED THAT THE FIRM 1) REVIEW,REVISE AND IMPLEMENT SUPERVISORY PROCEDURES DESIGNED TOENSUREREGULATORY COMPLIANCE; 2)REFRAIN FROM VIOLATIVE CONDUCT; 3)FOR2 YEARS, REPORT TO THE AGENCY ON A QUARTERLY BASIS CONCERNINGANY COMPLAINTS, ACTIONS OR PROCEEDINGS INVOLVING CONNECTICUTRESIDENTS; AND 4) PAY $1,000 TO THE STATE, $500 OF WHICHCONSTITUTED AN ADMINISTRATIVE PENALTY AND $500 OF WHICHREPRESENTED REIMBURSEMENT FOR AGENCY INVESTIGATIVE COSTS.

Regulator Statement CONTACT: C. ANTANAITIS, 860-240-8233.


Initiated By: CONNECTICUT.


Other


REIMBURSE INVESTIGATIVE COSTS.


Docket/Case Number: ST-97-3088-S



Allegations: OFFER OR SALE BY UNLICENSED/UNREG PERSON.



Resolution:

Other Sanctions Ordered: SPECIAL STIPULATION.

Sanction Details: REIMBURSED $500 FOR INVESTIGATIVE COSTS.

Firm Statement VIOLATION OF SEC.36B-6(D)OF CONN. UNIFORM SECURITIES ACT.STIPULATION AND AGREEMENT REQUIRES FIRM TO: REVIEW, REVISE &IMPLEMENT SUPERVISORY PROCEDURES TO ENSURE REGULATORYCOMPLIANCE; REFRAIN FROM VIOLATIVE CONDUCT; FOR 2 YEARSREPORT TO AGENCY ON QUARTERLY BASIS CONCERNING ANYCOMPLAINTS,ACTIONS OR PROCEEDINGS INVOLVING CONN. RESIDENTS.CONTACT C. ANTANAITIS (860)240-8233.

Sanctions Ordered: Monetary/Fine $500.00

Other

Disclosure 44 of 62

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Allegations: VIOLATIONS OF ARTICLE III, SECTIONS 1 AND 21 OF THE RULES OF FAIRPRACTICE











Docket/Case Number: SEA-403



Allegations: VIOLATIONS OF ARTICLE III, SECTIONS 1 AND 21 OF THE RULES OF FAIRPRACTICE


Resolution:


Sanction Details: NSC AND BROWN ARE CENSURED, FINED $5,000.00, JOINTLY ANDSEVERALLY (J&S), AND RESPONDENTS ARE ASSESSED COSTS OF $419.90,J&S. RESPONDENTS ARE ALSO ASSESSED APPELLATE COSTS OF $923.02,J&S. 04/02/1988 - DECISION IS FINAL. *** $5,000 FINE PAID J&S 4-12-88.$1,342.92 COSTS PAID 9-9-88.

Regulator Statement [TOP] COMPLAINT NO. SEA-403 FILED 12/09/1986 BY DISTRICT NO. 1AGAINST RESPONDENTS NATIONAL SECURITIES CORPORATION (NSC),ROBERT IRWIN KOLLACK, JEFFREY JOEL PRITCHARD AND MERRILL ANNEBROWN ALLEGING VIOLATIONS OF ARTICLE III, SECTIONS 1 AND 21 OF THERULES OF FAIR PRACTICE IN THAT NSC, THROUGH KOLLACK, PRITCHARDAND BROWN, AMONG OTHER THINGS, FAILED AT VARIOUS TIMES TOACCURATELY PREPARE COMPUTATIONS OF THE AMOUNTS REQUIRED TOBE ON DEPOSIT IN THE SPECIAL RESERVE BANK ACCOUNT FOR THEEXCLUSIVE BENEFIT OF CUSTOMERS; PERFORMED AT VARIOUS TIMESRESERVE ACCOUNT COMPUTATIONS WHICH REFLECTED THATADDITIONAL DEPOSITS WERE REQUIRED AND RATHER THAN DEPOSITINGCASH OR QUALIFIED SECURITIES TO THE ACCOUNT, DEPOSITED CHECKSDRAWN ON THE MEMBER'S OPERATING ACCOUNT WHICH CREATED ANOVERDRAFT IN THIS ACCOUNT; AT VARIOUS TIMES FAILED TO PERFORMAN ACCURATE RESERVE ACCOUNT COMPUTATION AND IN CONNECTIONWITH THE INACCURATE COMPUTATION, DEPOSITED A TRANSFER AGAINSTNSC?S OPERATING ACCOUNT WHICH CREATED AN OVERDRAFT IN THATOPERATING ACCOUNT; AND, FALED TO PREPARE AN ACCURATE NETCAPITAL COMPUTATION FOR MONTH ENDED 08/30/1985. DECISIONRENDERED 09/30/1987, WHEREIN NSC AND BROWN ARE CENSURED,FINED $5,000.00, JOINTLY AND SEVERALLY (J&S), AND RESPONDENTS AREASSESSED COSTS OF $419.90, J&S. 10/14/1987 - APPEALED TO THE BOARDOF GOVERNORS, WHICH RENDERED DECISION 03/03/1988, WHEREIN THEFINDINGS MADE AND SANCTIONS IMPOSED ARE AFFIRMED ANDRESPONDENTS ARE ALSO ASSESSED COSTS OF THE APPEAL IN THEAMOUNT OF $923.02, J&S. 04/02/1988 - DECISION IS FINAL. *** $5,000 FINEPAID J&S 4-12-88. $1,342.92 COSTS PAID 9-9-88.


Decision






[TOP] COMPLAINT NO. SEA-403 FILED 12/09/1986 BY DISTRICT NO. 1AGAINST RESPONDENTS NATIONAL SECURITIES CORPORATION (NSC),ROBERT IRWIN KOLLACK, JEFFREY JOEL PRITCHARD AND MERRILL ANNEBROWN ALLEGING VIOLATIONS OF ARTICLE III, SECTIONS 1 AND 21 OF THERULES OF FAIR PRACTICE IN THAT NSC, THROUGH KOLLACK, PRITCHARDAND BROWN, AMONG OTHER THINGS, FAILED AT VARIOUS TIMES TOACCURATELY PREPARE COMPUTATIONS OF THE AMOUNTS REQUIRED TOBE ON DEPOSIT IN THE SPECIAL RESERVE BANK ACCOUNT FOR THEEXCLUSIVE BENEFIT OF CUSTOMERS; PERFORMED AT VARIOUS TIMESRESERVE ACCOUNT COMPUTATIONS WHICH REFLECTED THATADDITIONAL DEPOSITS WERE REQUIRED AND RATHER THAN DEPOSITINGCASH OR QUALIFIED SECURITIES TO THE ACCOUNT, DEPOSITED CHECKSDRAWN ON THE MEMBER'S OPERATING ACCOUNT WHICH CREATED ANOVERDRAFT IN THIS ACCOUNT; AT VARIOUS TIMES FAILED TO PERFORMAN ACCURATE RESERVE ACCOUNT COMPUTATION AND IN CONNECTIONWITH THE INACCURATE COMPUTATION, DEPOSITED A TRANSFER AGAINSTNSC?S OPERATING ACCOUNT WHICH CREATED AN OVERDRAFT IN THATOPERATING ACCOUNT; AND, FALED TO PREPARE AN ACCURATE NETCAPITAL COMPUTATION FOR MONTH ENDED 08/30/1985. DECISIONRENDERED 09/30/1987, WHEREIN NSC AND BROWN ARE CENSURED,FINED $5,000.00, JOINTLY AND SEVERALLY (J&S), AND RESPONDENTS AREASSESSED COSTS OF $419.90, J&S. 10/14/1987 - APPEALED TO THE BOARDOF GOVERNORS, WHICH RENDERED DECISION 03/03/1988, WHEREIN THEFINDINGS MADE AND SANCTIONS IMPOSED ARE AFFIRMED ANDRESPONDENTS ARE ALSO ASSESSED COSTS OF THE APPEAL IN THEAMOUNT OF $923.02, J&S. 04/02/1988 - DECISION IS FINAL. *** $5,000 FINEPAID J&S 4-12-88. $1,342.92 COSTS PAID 9-9-88.


Initiated By: NASD.


Censure


FINE.





Allegations: FAILURE TO COMPLY WITH NET CAPITAL.FAILURE TO MAKE REQ DEPOSITS IN RESERVE ACCOUNT.FAILURE TO MAKE ACCURATE RES FORMULA COMP.



Resolution:

Other Sanctions Ordered: ADD'L FINE OF $1,342.92.

Sanction Details: $5000 FINE PAID 04/12/1988.$1342.92 PAID ON 09/09/1988.ROBERT KOLLACK, THE PRESIDENT OF THE FIRM AT THE TIME, WASSUSPENDED FOR 10 DAYS IN CONNECTION WITH THIS ACTION.

Firm Statement JOINT AND SEVERAL; ART. III, SECTS. 1 & 21 RFP; COSTS.


Decision

Disclosure 45 of 62

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Disclosure 45 of 62


Initiated By: VIRGINIA - STATE CORPORATION COMMISSIONDIVISION OF SECURITIES




Docket/Case Number: SEC920111




Allegations: ALLEGED THAT FIRM TRANSACTED BUSINESS WITHOUTBEING REGISTERED, EMPLOYED AN UNREGISTERED AGENT AND SOLDUNREGISTERED SECURITIES.



Resolution:


Sanction Details: ORDER OF SETTLEMENT ENTERED WITHOUT ADMITTING ORDENYING ALLEGATIONS, FIRM AGREED TO A FINE OF $25,000 AND COSTSOF INVESTIGATION OF $1,000.

Regulator Statement CONTACT BRIAN SILVERMAN, BROKER-DEALER EXAMINER,804-371-9415.


Consent


Initiated By: VIRGINIA.


Allegations: OFFER OR SALE OF UNREGISTERED SECURITIES.EMPLOYED AN UNREGISTERED AGENT.TRANSACTING BUSINESS W/OUT REGISTRATION.








Other


COSTS OF INVESTIGATION.


Docket/Case Number: SEC920111




Resolution:

Other Sanctions Ordered: COSTS OF INVESTIGATION.

Sanction Details: PAID FINE OF $25,000.PAID $1000 TO REIMBURSE COSTS OF INVESTIGATION.


Consent

Disclosure 46 of 62

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Initiated By: IDAHO DEPARTMENT OF FINANCE




Docket/Case Number: 1992-7-74




Allegations: OFFERS AND SALES BY UNLICENSED AGENTS,IMPROPER SUPERVISION, INADEQUATE COMPLIANCE PROCEDURES.



Resolution: Consent








Sanction Details: ADMINISTRATIVE ORDER WHEREIN NSC 1) ADMITTED THATAT LEAST ONE AGENT OFFERED AND SOLD SECURITIES IN IDAHOWITHOUTBENEFIT OF IDAHO LICENSURE, 2) ADMITTED THAT SOME OF THEBROKER-DEALER'S RECORDS WERE INACCURATE INFORMATION ORINCOMPLETE, 3) ADMITTED TO PROVIDING INACCURATE INFORMATION TODEPARTMENT OF FINANCE, 4) AGREED TO VARIOUS COMPLIANCERELATEDMEASURES, 5) PAID A $3,000 FINE AND 6) AGREED TO A ONE DAYSUSPENSION OF ITS BROKER-DEALER LICENSE.

Regulator Statement CONTACT: JIM BURNS - 208/334-3684

Sanctions Ordered: Monetary/Fine $3,000.00Suspension


Initiated By: IDAHO.


Other


MONETARY/FINE.SUSPENSION - FIXED DURATION.





Allegations: FAILURE TO SUPERVISE.OFFERS & SALES BY UNLICENSED AGENTS; INADEQUATE COMPLIANCEPROCEDURES.



Resolution:


Sanction Details: PAID FINE OF $3000.GENERAL SUSPENSION FOR 1 DAY ONLY: 02/08/1993 - 02/08/1993.

Sanctions Ordered: Monetary/FineSuspension

Consent






Sanction Details: PAID FINE OF $3000.GENERAL SUSPENSION FOR 1 DAY ONLY: 02/08/1993 - 02/08/1993.

Disclosure 47 of 62

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Initiated By: SECURITIES AND EXCHANGE COMMISSION




Docket/Case Number:



Allegations:



Resolution:


Sanction Details:

Regulator Statement ND 80-8 01/11/80REL. 34-16380 AND 34-16381CONSENTED WITH ADMITTING OR DENYINGTHE ALLEGATIONS TO A CENSURE AND ASIX-MONTH SUSPENSION OF PRINCIPALTRANSACTIONS IN THE TYPES OFSECURITIES INVOLVED. IN ADDITIONNATIONAL MADE SEVERAL UNDERTAKINGS TOSTRENGTHEN ITS SUPERVISION OF TRADINGBY ITS SALESMEN.

Sanctions Ordered: CensureSuspension

Consent







Initiated By: SEC.


Censure


IMPROVE SUPERVISORY PROCEDURES.SUSPENSION - FIXED DURATION.


Docket/Case Number:



Allegations: EXCESSIVE MARK-UPS AND COMMISSIONS.



Resolution:

Other Sanctions Ordered: IMPROVE SUPERVISORY PROCEDURES.

Sanction Details: SUSPENSION FROM 1/11/1980 THROUGH 7/8/1980, GENERAL CAPACITY.

Firm Statement SEC ND 80-8 01/11/80 REL. 34-16380 & 34-16381

Sanctions Ordered: CensureSuspension

Consent

Disclosure 48 of 62

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Initiated By: FLORIDA DIVISION OF SECURITIES








Allegations: Not Provided









Resolution:


Sanction Details: ON 6/10/1999, THE FLORIDA DEPARTMENT OF BANKINGAND FINANCE ISSUED A FINAL ORDER ENTERING INTO A STIPULATIONAND CONSENT AGREEMENT REGARDING THE RESPONDENTS NATIONALSECURITIES CORPORATION AND ROBERT KOLLACK. THE RESPONDENTSNEITHER ADMITTED NOR DENIED THE ALLEGATIONS BUT CONSENTED TOTHE DEPARTMENT'S FINDINGS. PURSUANT TO THE AGREEMENT NATIONALSECURITIES CORP AND ROBERT KOLLACK AGREED TO CEASE ANDDESISTFROM FURTHER VIOLATIONS OF CHAPTER 517, FLORIDA STATUTES. INADDITION, NATIONAL SECURITIES CORPORATION AGREED TO PAY A FINEIN THE AMOUNT OF $10,000 AND TO WITHDRAW ITS PENDINGAPPLICATION FOR REGISTRATION OF A BRANCH OFFICE TO BE LOCATEDIN TAMPA, FL.

Regulator Statement CONTACT: NANCY WOOD (850) 410-9805.




Initiated By: FLORIDA.


Cease and Desist


FINE.


Docket/Case Number: 1388-S-10/90 AND 1054-S-3/89



Allegations: ALLEGED VIOLATIONS OF CHAPTER 517.07, 517.12, AND 517.121 OFFLORIDA STATUES.


Resolution: Stipulation and Consent 120©2020 FINRA. All rights reserved. Report about NATIONAL SECURITIES CORPORATION






Resolution:


Sanction Details: ORDERED TO CEASE AND DESIST FROM FUTURE VIOLATIONS OFCHAPTER 517 OF FLORIDA STATUES, WITHDRAW A PENDING APPLICATIONFOR REGISTRATION OF A BRANCH OFFICE TO BE LOCATED IN TAMPA, FL(WHICH WAS REQUESTED PRIOR TO 1991), AND PAY FINE OF $10,000.



Disclosure 49 of 62

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Allegations:



Resolution:


Sanction Details:

Regulator Statement CASE ID NO. C3B910003 (SEA-559 - DISTRICT NO. 3) FILED DECEMBER26, 1990 AGAINST RESPONDENTS NATIONAL SECURITIES CORP., JEFFREYJOEL PRITCHARD, DOUGLAS FRANK GASS AND JOSEPH JOHN RUGGERIALLEGING VIOLATIONS OF ARTICLE III, SECTIONS 1, 27, 35(b)(1)AND (2), 35(d)(1) AND (2), AND 35(d)(2)(A) OF THE RULES OF FAIRPRACTICE IN THAT RESPONDENTS GASS AND/OR RUGGERI MADEMISLEADING, EXAGGERATED AND UNWARRANTED STATEMENTS ANDOMITTEDMATERIAL FACTS IN THEIR PUBLIC COMMUNICATIONS BY MEANS OFPUBLIC RADIO BROADCASTS; AND, IN CONNECTION WITH SUCHCONDUCT,RESPONDENT MEMBER, ACTING THROUGH RESPONDENT PRITCHARD,FAILEDTO ESTABLISH ADEQUATE WRITTEN SUPERVISORY PROCEDURES OROTHERWISE FAILED TO SUPERVISE THE ACTIVITIES OF RESPONDENTSGASS AND/OR RUGGERI TO ASSURE THEIR COMPLIANCE WITH THESECURITIES LAWS; RESPONDENT GASS FAILED TO STATE ONADVERTISEMENTS AND SALES LITERATURE THE NAME OF HIS MEMBERFIRMAND INSTEAD USED "DOUGLAS GASS AND ASSOCIATES"; AND,RESPONDENTMEMBER, ACTING THROUGH RESPONDENT PRITCHARD, FAILED TOAPPROVE,PRIOR TO USE, THE AFOREMENTIONED ADVERTISING AND SALESLITERATURE AND TO OBTAIN AND RETAIN TAPE RECORDINGS OF RADIOBROADCASTS MADE BY RESPONDENT GASS. DECISION RENDERED JULY1O,1991, WHEREIN RESPONDENT MEMBER IS CENSURED, FINED $15,000, ANDREQUIRED TO FILE ALL ADVERTISEMENTS WITH THE NASD'S ADVERTISINGDEPARTMENT FOR A PERIOD OF ONE YEAR; RESPONDENT PRITCHARD ISCENSURED AND FINED $10,000; RESPONDENT GASS IS CENSURED, FINED$5,000, SUSPENDED FROM ASSOCIATION WITH ANY MEMBER OF THENASDAS A REGISTERED REPRESENTATIVE FOR TWO WEEKS, ANDRESPONDENTRUGGERI IS CENSURED AND FINED $1,000. IN ADDITION, THERESPONDENTS ARE EACH ASSESSD 1/4 OF THE TOTAL COSTS OF$1,781.65. IF NO FURTHER ACTION, DECISION IS FINAL AUGUST 26,1991. ***AUGUST 26, 1991 - DECISION FINAL*** ***$15,445.42 PAIDON 6/6/91 INVOICE #91-38-823***


Decision





www.finra.org/brokercheck User GuidanceCASE ID NO. C3B910003 (SEA-559 - DISTRICT NO. 3) FILED DECEMBER26, 1990 AGAINST RESPONDENTS NATIONAL SECURITIES CORP., JEFFREYJOEL PRITCHARD, DOUGLAS FRANK GASS AND JOSEPH JOHN RUGGERIALLEGING VIOLATIONS OF ARTICLE III, SECTIONS 1, 27, 35(b)(1)AND (2), 35(d)(1) AND (2), AND 35(d)(2)(A) OF THE RULES OF FAIRPRACTICE IN THAT RESPONDENTS GASS AND/OR RUGGERI MADEMISLEADING, EXAGGERATED AND UNWARRANTED STATEMENTS ANDOMITTEDMATERIAL FACTS IN THEIR PUBLIC COMMUNICATIONS BY MEANS OFPUBLIC RADIO BROADCASTS; AND, IN CONNECTION WITH SUCHCONDUCT,RESPONDENT MEMBER, ACTING THROUGH RESPONDENT PRITCHARD,FAILEDTO ESTABLISH ADEQUATE WRITTEN SUPERVISORY PROCEDURES OROTHERWISE FAILED TO SUPERVISE THE ACTIVITIES OF RESPONDENTSGASS AND/OR RUGGERI TO ASSURE THEIR COMPLIANCE WITH THESECURITIES LAWS; RESPONDENT GASS FAILED TO STATE ONADVERTISEMENTS AND SALES LITERATURE THE NAME OF HIS MEMBERFIRMAND INSTEAD USED "DOUGLAS GASS AND ASSOCIATES"; AND,RESPONDENTMEMBER, ACTING THROUGH RESPONDENT PRITCHARD, FAILED TOAPPROVE,PRIOR TO USE, THE AFOREMENTIONED ADVERTISING AND SALESLITERATURE AND TO OBTAIN AND RETAIN TAPE RECORDINGS OF RADIOBROADCASTS MADE BY RESPONDENT GASS. DECISION RENDERED JULY1O,1991, WHEREIN RESPONDENT MEMBER IS CENSURED, FINED $15,000, ANDREQUIRED TO FILE ALL ADVERTISEMENTS WITH THE NASD'S ADVERTISINGDEPARTMENT FOR A PERIOD OF ONE YEAR; RESPONDENT PRITCHARD ISCENSURED AND FINED $10,000; RESPONDENT GASS IS CENSURED, FINED$5,000, SUSPENDED FROM ASSOCIATION WITH ANY MEMBER OF THENASDAS A REGISTERED REPRESENTATIVE FOR TWO WEEKS, ANDRESPONDENTRUGGERI IS CENSURED AND FINED $1,000. IN ADDITION, THERESPONDENTS ARE EACH ASSESSD 1/4 OF THE TOTAL COSTS OF$1,781.65. IF NO FURTHER ACTION, DECISION IS FINAL AUGUST 26,1991. ***AUGUST 26, 1991 - DECISION FINAL*** ***$15,445.42 PAIDON 6/6/91 INVOICE #91-38-823***


Initiated By: NASD.


Allegations: FAILED TO APPROVED ADVERTISING USED BY RR.FAILURE TO SUPERVISE.








Censure


FINE.MUST FILE ALL ADVERTISING WITH NASD FOR ONE YEAR.






Resolution:

Other Sanctions Ordered: MUST FILE ALL ADVERTISING WITH NASD FOR 1 YEAR.

Sanction Details: $15,000 FINE PAID 06/06/1991.ADDITIONAL FINE OF $445.42 PAID 06/06/1991.

Firm Statement ART III SECT 1, 27,35(B)(1) & (2) & 35(D)(1) & (2) & 35(D)(2)(A) OF RFP;COSTS.


Decision

Disclosure 50 of 62

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Initiated By: IOWA




SUSPENSION


Docket/Case Number: C88-07-018




Allegations: SEE ITEM #13


Resolution: Consent 123©2020 FINRA. All rights reserved. Report about NATIONAL SECURITIES CORPORATION






Resolution:


Sanction Details: N/A

Regulator Statement THE BUREAU ALLEGEDTHAT NATIONAL SECURITIES CORPORATION HAD 14 AGENTS ENGAGE IN740 SECURITIES TRANSACTIONS ON BEHALF OF 129 IOWANS WHILE THEBROKER-DEALER AND ITS AGENTS WERE UNLICENSED. THE BUREAUALSOALLEGED THAT NSC FAILED TO SUPERVISE ITS AGENTS. THEBROKER-DEALER CONSENTED TO THE SANCTIONS, WITHOUT ADMITTINGORDENYING THE ALLEGATIONS. NSC PAID A CIVIL PENALTY OF $7,500,AND ITS BROKER-DEALER REGISTRATION, ALTHOUGH MADE EFFECTIVEASOF THE DATE OF THE ORDER, WAS SUSPENDED FOR A PERIOD OF TWOMONTHS. THE BROKER-DEALER WAS SPECIFICALLY AUTHORIZED TOLIQUIDATE EXISTING IOWA ACCOUNT POSITIONS DURING THESUSPENSIONPERIOD. NO NEW SALES OF SECURITIES TO PERSONS WITHIN IOWA AREPERMITTED DURING THE PERIOD OF SUSPENSION. DOCKET/CASE NO.C88-07-018, DATED NOVEMBER 5, 1987.


Consent


Initiated By: IOWA.


Other




Docket/Case Number: C88-07-018



Allegations: FAILURE TO SUPERVISE.TRANSACTING BUSINESS WITHOUT REGISTRATION.










Resolution:


Sanction Details: FINE PAID OF $7500.GENERAL SUSPENSION FOR 60 DAYS: 11/05/1987 - 01/03/1988.

Firm Statement BD REGISTRATION MADE EFFECTIVE DAY OF ORDER, ALTHOUGHSUSPENDED.


Consent

Disclosure 51 of 62

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Docket/Case Number: SEA-345-AWC



Allegations:



Resolution:


Sanction Details:

Regulator Statement COMPLAINT SEA-345-AWC - NATIONAL SECURITIES CORPORATION WASFINED $3,000 FOR VIOLATIONS OF ARTICLE III, SECTIONS 1 AND 21 OFTHE RULES OF FAIR PRACTICE. ********* $3,000 PAID 9-21-84.


Consent






COMPLAINT SEA-345-AWC - NATIONAL SECURITIES CORPORATION WASFINED $3,000 FOR VIOLATIONS OF ARTICLE III, SECTIONS 1 AND 21 OFTHE RULES OF FAIR PRACTICE. ********* $3,000 PAID 9-21-84.


Initiated By: NASD.


Other






Allegations: NO INFORMATION AVAILABLE.



Resolution:


Sanction Details: $3000 FINE PAID ON 09/21/1984.

Firm Statement ART. III, SECTS. 1 & 21 RFP.


Consent

Disclosure 52 of 62

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Initiated By: ARIZONA


Docket/Case Number: S-2147-I-53598




Allegations:











Resolution:


Sanction Details:

Regulator Statement NOTICE OF ORDER TO CEASE AND DESIST FROM STATE OF ARIZONA ON6/2/83 (NO. S-2147-I 53598) ISSUED AGAINST NATIONAL SECURITIESCORPORATION, ENDING IN 7/83. NATIONAL SECURITIES CORPORATIONWAS ALSO DENIED REGISTRATION AS A BROKER-DEALER IN THE STATE OFARIZONA ON 6/2/83. THEY (NSC) WERE GRANTED REGISTRATION ON2/17/84 (ORDER S-3111-D).

Sanctions Ordered: Cease and Desist/InjunctionRevocation/Expulsion/Denial

Consent


Initiated By: ARIZONA.


Cease and Desist


DENIAL.


Docket/Case Number: S-2147-I-53598



Allegations: INFORMATION UNAVAILABLE.



Resolution:


Consent







Sanction Details: NO INFORMATION AVAILABLE.

Firm Statement REGISTRATION GRANTED 2/17/1984 - ORDER S-3111-D CD0 ENDING 07183.


Disclosure 53 of 62

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Initiated By: TEXAS


Suspension



Docket/Case Number: RG/S-710




Allegations: SOLD SECURITIES IN TEXAS AT A TIME WHEN THEY WERE NOTREGISTEREDAS A DEALER, THROUGH AT LEAST ONE UNREGISTERED SALESMAN; ANDSELLING UNREGISTERED SECURITIES.



Resolution:



Regulator Statement ORDER GRANTING REGISTRATIONAS A SECURITIES DEALER AND SUSPENDING SAID REGISTRATION ANDIMPOSING PROBATION ON SAID DEALER FOR A PERIOD OF TWELVEMONTHSFOLLOWING SUSPENSION. AGREED ORDER BY CONSENT. RESPONDENT'SFAILURE TO COMPLY WITH TERMS OF PROBATION WILL RESULT INREVOCATION OF REGISTRATION AS SECURITIES DEALER. VIOLATIONS:SOLD SECURITIES IN TEXAS AT A TIME WHEN THEY WERE NOTREGISTEREDAS A DEALER, THROUGH AT LEAST ONE UNREGISTERED SALESMAN; ANDSELLING UNREGISTERED SECURITIES. (NSC WAS GRANTEDREGISTRATONAND SUCH REGISTRAITON WAS SUSPENDED FOR A PERIOD OF 60 DAYSANDPLACED UNDER PROBATION FOR 12 MONTHS FOLLOWING THESUSPENSION)DOCKET NO. RG/S-710.


Consent






ORDER GRANTING REGISTRATIONAS A SECURITIES DEALER AND SUSPENDING SAID REGISTRATION ANDIMPOSING PROBATION ON SAID DEALER FOR A PERIOD OF TWELVEMONTHSFOLLOWING SUSPENSION. AGREED ORDER BY CONSENT. RESPONDENT'SFAILURE TO COMPLY WITH TERMS OF PROBATION WILL RESULT INREVOCATION OF REGISTRATION AS SECURITIES DEALER. VIOLATIONS:SOLD SECURITIES IN TEXAS AT A TIME WHEN THEY WERE NOTREGISTEREDAS A DEALER, THROUGH AT LEAST ONE UNREGISTERED SALESMAN; ANDSELLING UNREGISTERED SECURITIES. (NSC WAS GRANTEDREGISTRATONAND SUCH REGISTRAITON WAS SUSPENDED FOR A PERIOD OF 60 DAYSANDPLACED UNDER PROBATION FOR 12 MONTHS FOLLOWING THESUSPENSION)DOCKET NO. RG/S-710.


Initiated By: TEXAS.


Suspension


PROBATION.


Docket/Case Number: RG/S-710



Allegations: OFFER OR SALE OF UNREGISTERED SECURITIES.TRANSACTING BUSINESS W/OUT REGISTRATION.



Resolution:

Other Sanctions Ordered: 12-MONTH PROBATION.

Sanction Details: GENERAL SUSPENSION FOR 60 DAYS FROM 11/12/1994 THROUGH01/10/1985.12-MONTH PROBATION FOLLOWING SUSPENSION.

Firm Statement ORDER WAS GRANTED REGISTERED FIRM AS A SECURITIES DEALER.


Consent

Disclosure 54 of 62

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Disclosure 54 of 62


Initiated By: GEORGIA


Cease and Desist







Allegations: SALES OF SECURITIES TO RESIDENTS OF THE STATEOF GEORGIA BY A DEALER NOT REGISTERED IN GEORGIA.



Resolution:



Regulator Statement ORDER OF SETTLEMENTRESULTING FROM SALES OF SECURITIES TO RESIDENTS OF THE STATEOF GEORGIA BY A DEALER NOT REGISTERED IN GEORGIA. DOCKET NO.50-84-9581.

Sanctions Ordered: SuspensionCease and Desist/Injunction

Consent


Initiated By: GEORGIA.



Allegations: TRANSACTING BUSINESS W/OUT REGISTRATION.








Cease and Desist


SUSPENSION - FIXED DURATION.




Resolution:


Sanction Details: GENERAL SUSPENSION LASTED 15 DAYS.

Sanctions Ordered: SuspensionCease and Desist/Injunction

Consent

Disclosure 55 of 62

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Allegations: VIOLATED ARTICLE III, SECTIONS 1 AND 27 OF THE RFP.



Resolution:


Sanction Details: NATL: IS CENSURED, FINED $80,000 AND AGREES TO VARIOUSUNDERTAKINGS. **$80,000.00 PAID ON 12/1/92 INVOICE #92-MS-1008**


Consent






Sanction Details: NATL: IS CENSURED, FINED $80,000 AND AGREES TO VARIOUSUNDERTAKINGS. **$80,000.00 PAID ON 12/1/92 INVOICE #92-MS-1008**

Regulator Statement [TOP] MARKET SURVEILLANCE COMMITTEE COMPLAINT# CMS920004:HAROLD B. HAYES, WILLIAM R. SHEPPARD, BRITSON INVESTMENTS,NATIONAL SECURITIES CORPORATION (NATL), JEFFREY J. PRITCHARD,WAYND D. INGBRITSON, LYNETTE M. LARUE, ROBERT F. NAGEL, ANDREWC. BERRY, BRUCE E. MAUER, MARK A. ANDERSON, BRIAN PAUL GENTRY,RICHARD L. BLACKSTOCK. THIS COMPLAINT WAS FILED BY THE MARKETSURVEILLANCE COMMITTEE (MSC) ON 03/06/1992 AGAINST THE ABOVENAMED RESPONDENTS. THERE ARE THIRTEEN CAUSE OF COMPLAINTINCLUDING THE TWELFTH CAUSE, WHCIH ALLEGES THAT NATL ANDPRITCHARD VIOLATED ARTICLE III, SECTIONS 1 AND 27 OF THE RFP FOR AFAILURE TO REASONABLY SUPERVISE THE ACTIVITIES OF SHEPPARD,LARUE NAGEL, MAUER, BERRY, GENTRY, BLACKSTOCK ANDERSON.RESPONDENTS NATL, PRITCHARD, LARUE, NAGEL, BERRY, MAUER,ANDERSON, GENTRY, AND BLACKSTOCK SUBMITTED OFFERS OFSETTLEMENT.THE MSC FOUND THAT NATL AND PRITCHARD VIOLATED ARTICLE III,SECTIONS 1 AND 27 OF THE RFP. BASED ON THE OFFERS, THE MSCIMPOSED THE FOLLOWING SANCTIONS: NATL: IS CENSURED, FINED$80,000 AND AGREES TO VARIOUS UNDERTAKINGS. **$80,000.00 PAID ON12/1/92 INVOICE #92-MS-1008**


Initiated By: NASD.


Other






Allegations: FAILURE TO PROPERLY SUPERVISE.



Resolution:


Consent







Sanction Details: FINE PAID ON 12/01/1992.

Firm Statement FIRM AGREED TO VARIOUS UNDERTAKINGS; ART III SECTION 1 & 27 OFRFP.


Disclosure 56 of 62

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Allegations:



Resolution:


Sanction Details:

Regulator Statement ON NOVEMBER 27, 1991, THE LETTER OF ACCEPTANCE, WAIVER ANDCONSENT NO. C3B910043 (DISTRICT NO. 3) SUBMITTED BY RESPONDENTSNATIONAL SECURITIES CORPORATION AND PHILLIP LESTER KECK WASACCEPTED; THEREFORE, RESPONDENT MEMBER IS CENSURED ANDFINED$4,000 AND RESPONDENT KECK IS CENSURED AND FINED $5,000 -(ARTICLE III, SECTIONS 1 AND 27 OF THE RULES OF FAIR PRACTICE -RESPONDENT MEMBER, ACTING THROUGH RESPONDENT KECKDISTRIBUTEDUNREGISTERED CONTROL STOCK; AND, RESPONDENT MEMBER FAILEDTOIMPLEMENT WRITTEN OR UNWRITTEN SUPERVISORY PROCEDURES TODETECTTHE DISTRIBUTION OF UNREGISTERED STOCK TO PUBLIC CUSTOMERS).


Consent






ON NOVEMBER 27, 1991, THE LETTER OF ACCEPTANCE, WAIVER ANDCONSENT NO. C3B910043 (DISTRICT NO. 3) SUBMITTED BY RESPONDENTSNATIONAL SECURITIES CORPORATION AND PHILLIP LESTER KECK WASACCEPTED; THEREFORE, RESPONDENT MEMBER IS CENSURED ANDFINED$4,000 AND RESPONDENT KECK IS CENSURED AND FINED $5,000 -(ARTICLE III, SECTIONS 1 AND 27 OF THE RULES OF FAIR PRACTICE -RESPONDENT MEMBER, ACTING THROUGH RESPONDENT KECKDISTRIBUTEDUNREGISTERED CONTROL STOCK; AND, RESPONDENT MEMBER FAILEDTOIMPLEMENT WRITTEN OR UNWRITTEN SUPERVISORY PROCEDURES TODETECTTHE DISTRIBUTION OF UNREGISTERED STOCK TO PUBLIC CUSTOMERS).


Initiated By: NASD.


Other


MONETARY PENALTY/FINE.





Allegations: FAILURE TO PROPERLY SUPERVISE.SALE OF UNREGISTERED SECURITIES.



Resolution:


Sanction Details: FINE PAID.

Firm Statement ART III, SECTIONS 1 & 27 OF THE REP.


Consent

Disclosure 57 of 62

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Allegations:













Resolution:


Sanction Details:

Regulator Statement ON DECEMBER 27, 1990, THE LETTER OF ACCEPTANCE, WAIVER ANDCONSENT NO. SEA-548-AWC (DISTRICT NO. 3) SUBMITTED BYRESPONDENT NATIONAL SECURITIES CORPORATION WAS ACCEPTED;THEREFORE, THE FIRM IS CENSURED AND FINED $1,000 - (ARTICLEIII, SECTIONS 1 AND 27 OF THE RULES OF FAIR PRACTICE -RESPONDENT MEMBER FAILED TO PROPERLY APPROVE TRANSACTIONSINCUSTOMER ACCOUNTS CONCERNING "DESIGNATED SECURITIES"; ANDFAILED TO MAINTAIN WRITTEN SUPERVISORY PROCEDURES IN THAT THEFIRM DID NOT DESIGNATE A GENERAL SECURITIES PRINCIPALRESPONSIBLE FOR THE FIRM'S COMPLIANCE WITH SEC RULE 15c2-6). ***$1,000.00 PAID ON 1/28/91 INVOICE #91-38-13***


Consent


Initiated By: NASD.





Allegations: FAILED TO PROPERLY APPROVE TRANSACTIONS.FAILURE TO PROPERLY SUPERVISE.








Other




Resolution:


Sanction Details: $1000 FINE PAID 01/28/1991.

Firm Statement ART. III, SECTS. 1 &27 RFP; SEC RULE 15C2-6.


Consent

Disclosure 58 of 62

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Initiated By: MISSOURI SECURITIES DIVISION




Docket/Case Number: A0-91-1




Allegations: An employee of National Securities Corp.engaged in the sale of securities in the State of Missouriwithout the benefit of registration.



Resolution:



Consent







Sanction Details: National Securities Corp. entered into a ConsentOrder with the Missouri Securities Commissioner and agreed topay a fine of $2,000.

Regulator Statement Not Provided


Initiated By: MISSOURI.


Other


MONETARY/FINE.





Allegations: UNREGISTERED EMPLOYEE ENGAGED IN SECURITIES SALES.



Resolution:


Sanction Details: PAID FINE OF $2000.


Consent

Disclosure 59 of 62

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Allegations:













Resolution:


Sanction Details:

Regulator Statement COMPLAINT NO. SEA-506 FILED JULY 25, 1989 BY DISTRICT NO. 1AGAINST RESPONDENTS NATIONAL SECURITIES CORPORATION, JEFFREYJOEL PRITCHARD, HOWARD WINSTON JONES, JR. AND WILLIAMFREDERICKWUERCH ALLEGING VIOLATIONS OF MSRB RULE G-27 AND G-30 IN THATRESPONDENT MEMBER, ACTING THROUGH RESPONDENTS PRITCHARDAND/ORJONES, AND RESPONDENT WUERCH EFFECTED THE SALE OF MUNICIPALBOND TRANSACTIONS AS PRINCIPAL AT PRICES THAT WERE NOT FAIR ANDREASONABLE; AND RESPONDENT MEMBER, ACTING THROUGHRESPONDENTSPRITCHARD AND/OR JONES FAILED TO SUPERVISE THE ACTIVITIES OFRESPONDENT WUERCH.

DECISION RENDERED DECEMBER 13, 1989, WHEREIN THE OFFER OFSETTLEMENT SUBMITTED BY RESPONDENTS WAS ACCEPTED;THEREFORE,RESPONDENTS MEMBER, PRITCHARD, JONES AND WUERCH ARE EACHCENSURED AND FINED $2,500, JOINTLY AND SEVERALLY; RESPONDENTSMEMBER, JONES AND PRITCHARD ARE FINED $2,500, JOINTLY ANDSEVERALLY; AND, RESPONDENT MEMBER WILL PROVIDE RESTITUTION OF$6,191 TO ITS CUSTOMERS AND WILL PROVIDE DISTRICT NO. 1 STAFFCOPIES OF CANCELLED CHECKS OR JOURNAL ENTRIES TO CUSTOMERACCOUNTS TO EVIDENCE SUCH RESTITUTION. ***$2,500.00 J&S PAID ON1/30/90 INVOICE #90-01-66.***


Consent







Initiated By: NASD.


Censure


RESTITUTION.FINE.





Allegations: EXCESSIVE MARK-UPS OR COMMISSION.FAILURE TO SUPERVISE.



Resolution:


Sanction Details: FINE OF $5000.RESTITUTION OF $6,101.

Firm Statement JOINT AND SEVERAL.

Sanctions Ordered: CensureMonetary/FineDisgorgement/Restitution

Consent

Disclosure 60 of 62

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Docket/Case Number: 1054-S-3189


Allegations: SEE ITEM #13








Cease and Desist






Resolution:



Regulator Statement ON JUNE 13, 1989, THESTATE OF FLORIDA ENTERED AN ORDER TO CEASE & DESIST ANDBRANCHOFFICE REGISTRATION DENIAL IN THE MATTER OF RESPONDENTSNATIONALSECURITIES CORPORATION (DBA - NATIONAL SECURITIES CORPORATIONOFWASHINGTON), NSC INVESTMENT CORPORATION (NKA - NATIONALINVESTMENT AND INSURANCE CORPORATION), FRANK L. STILES, PETERK.LLOYD, NEAL S. ALLEN, ROBERT I. KOLLACK, JEFFREY J. PRITCHARD,CHARLES P. DAVIS, JR. AND DAVID P. SCHRADER. THE STATE HASDETERMINED THAT THE RESPONDENTS AS IDENTIFIED HAVE BEENINVOLVEDIN THE SALE OF UNREGISTERED SECURITIES, HAVE SOLD SECURITIESUNDER THE AUSPICES OF A COMPANY NOT PROPERLY REGISTERED AS ABROKER/DEALER, EFFECTED CUSTOMER TRANSACTIONS NOTRECORDED ONTHE REGULAR BOOKS OR RECORDS OF NATIONAL SECURITIESCORPORATION,AND FAILED TO ESTABLISH AND MAINTAIN SUPERVISORY PROCEDURESASREQUIRED. ACCORDINGLY, THE RESPONDENTS ARE ORDERED TO CEASEANDDESIST FROM FURTHER VIOLATIONS OF CHAPTER 517, FLORIDASTATUTES,AND THE BRANCH APPLICATION FILED BY NATIONAL SECURITIESCORPORATION FOR AN OFFICE OF 5401 W. KENNEDY BLVD., SUITE 1010,TAMPA, FLORIDA 33609, IS HEREBY DENIED. DOCKET/CASE#1054-S-3/89, DATED JUNE 13, 1989


Order






ON JUNE 13, 1989, THESTATE OF FLORIDA ENTERED AN ORDER TO CEASE & DESIST ANDBRANCHOFFICE REGISTRATION DENIAL IN THE MATTER OF RESPONDENTSNATIONALSECURITIES CORPORATION (DBA - NATIONAL SECURITIES CORPORATIONOFWASHINGTON), NSC INVESTMENT CORPORATION (NKA - NATIONALINVESTMENT AND INSURANCE CORPORATION), FRANK L. STILES, PETERK.LLOYD, NEAL S. ALLEN, ROBERT I. KOLLACK, JEFFREY J. PRITCHARD,CHARLES P. DAVIS, JR. AND DAVID P. SCHRADER. THE STATE HASDETERMINED THAT THE RESPONDENTS AS IDENTIFIED HAVE BEENINVOLVEDIN THE SALE OF UNREGISTERED SECURITIES, HAVE SOLD SECURITIESUNDER THE AUSPICES OF A COMPANY NOT PROPERLY REGISTERED AS ABROKER/DEALER, EFFECTED CUSTOMER TRANSACTIONS NOTRECORDED ONTHE REGULAR BOOKS OR RECORDS OF NATIONAL SECURITIESCORPORATION,AND FAILED TO ESTABLISH AND MAINTAIN SUPERVISORY PROCEDURESASREQUIRED. ACCORDINGLY, THE RESPONDENTS ARE ORDERED TO CEASEANDDESIST FROM FURTHER VIOLATIONS OF CHAPTER 517, FLORIDASTATUTES,AND THE BRANCH APPLICATION FILED BY NATIONAL SECURITIESCORPORATION FOR AN OFFICE OF 5401 W. KENNEDY BLVD., SUITE 1010,TAMPA, FLORIDA 33609, IS HEREBY DENIED. DOCKET/CASE#1054-S-3/89, DATED JUNE 13, 1989


Initiated By: FLORIDA.


Cease and Desist



Docket/Case Number: 1054-S-3189



Allegations: FAILURE TO SUPERVISE.OFFER OR SALE OF UNREGISTERED SECURITIES.OTHER - EFFECTED TRANSACTIONS NOT RECORDED ON FIRMS BOOKSAND RECORDS.TRANSACTING BUSINESS W/OUT REGISTRATION.



Resolution:


Sanction Details: CEASE AND DESIST.

Firm Statement CHAPTER 517 FLORIDA STATUES.

Sanctions Ordered: Cease and Desist/Injunction

Decision

Disclosure 61 of 62

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Allegations: NATIONAL AND/OR ITS PRINCIPAL VIOLATED SECTION 301(A) AND305(A) (VII) OF THE PENNSYLVANIA SECURITIES ACT FOR CONDUCTINGBROKER-DEALER ACTIVITIES IN PA WITHOUT REGISTRATION AND FAILINGTO SUPERVISE ITS AGENTS.







Initiated By: PENNSYLVANIA


Suspension







NATIONAL AND/OR ITS PRINCIPAL VIOLATED SECTION 301(A) AND305(A) (VII) OF THE PENNSYLVANIA SECURITIES ACT FOR CONDUCTINGBROKER-DEALER ACTIVITIES IN PA WITHOUT REGISTRATION AND FAILINGTO SUPERVISE ITS AGENTS.


Resolution:



Regulator Statement ON OCTOBER 26, 1987,PENNSYLVANIA SIMULTANEOUSLY REGISTERED AND SUSPENDED THEREGISTRATION OF NATIONAL SECURITIES CORPORATION AND VARIOUSPRINCIPALS FOR A PERIOD OF 120 DAYS (WITH MODIFICATION FORLIQUIDATING AND PRESENT CUSTOMER ACCOUNTS) BASED ON A FINDINGTHAT NATIONAL AND/OR ITS PRINCIPAL VIOLATED SECTION 301(A) AND305(A) (VII) OF THE PENNSYLVANIA SECURITIES ACT FOR CONDUCTINGBROKER-DEALER ACTIVITIES IN PA WITHOUT REGISTRATION AND FAILINGTO SUPERVISE ITS AGENTS. BACK-FEES AND COSTS OF INVESTIGATIONWERE IMPOSED. DOCKET/CASE NO.8708-8, DATED OCTOBER 26, 1987.


Decision


Initiated By: PENNSYLVANIA.



Allegations: FAILURE TO SUPERVISE.TRANSACTING BUSINESS W/OUT REGISTRATION.








Suspension






Resolution:


Sanction Details: SUSPENSION - FIXED DURATION. 120 DAYS FROM 10/26/1987 THROUGH02/22/1988.


Decision

Disclosure 62 of 62

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Docket/Case Number: AWC-29



Allegations:



Resolution:



Consent







Sanction Details:

Regulator Statement COMPLAINT #AWC-29 FILED 06/23/78DIST. #1DECISION 06/23/78 CENSURED AND FINED $1,000.J&S06/23/78 FINAL.FINES & COSTS 08/14/78 FC#7087 PD J&S


Initiated By: NASD.


Censure


FINE.


Docket/Case Number: AWC-29



Allegations: NO INFORMATION AVAILABLE.



Resolution:


Sanction Details: $1000 FINE PAID 08/14/1978.

Firm Statement JOINT AND SEVERAL.


Consent






Civil - Pending

This type of disclosure event involves a pending civil court action that with seek an injunction to cease certain investment-related activity or alleges a violation of any investment-related statute or regulation.

Disclosure 1 of 2


Initiated By: PHILIP J. CHARVAT, ON BEHALF OF HIMSELF & OTHERS SIMILARLYSITUATED

Relief Sought: Money Damages (Private/Civil Complaint)

Other Relief Sought:

Date Court Action Filed: 11/12/2014


Other Product Types:

Court Details: UNITED STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT OF OHIO.CASE#2:14-CV-2205

VIOLATION OF THE TCPA'S DO NOT CALL PROVISIONSAllegations:

Current Status: Pending

Date Notice/Process Served: 11/18/2014

Disclosure 2 of 2

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Initiated By: MICHAEL JOHNSON, ON BEHALF OF HIMSELF AND ALL OTHERS SIMILARLYSITUATED


Date Court Action Filed: 10/27/2014

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

Other Product Types:

Court Details: UNITED STATES DISTRICT COURT EASTERN DISTRICT OF TEXAS. CASE#2:14-CV-00997

VIOLATION OF SECTION 11 OF THE SECURITIES ACT.VIOLATION OFSECTION 12(A)(2)OF THE SECURITIES ACT.VIOLATION OF SECTION 15 OFTHE SECURITIES ACT.

Allegations:

Current Status: Pending

Date Notice/Process Served: 11/03/2014







Other Relief Sought:






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 15


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:

NASD

03/21/2001

01-01187

ACCOUNT ACTIVITY-BRCH OF FIDUCIARY DT; ACCOUNT ACTIVITY-SUITABILITY; ACCOUNT ACTIVITY-UNAUTHORIZED TRADING; ACCOUNTRELATED-FAILURE TO SUPERVISE

DO NOT USE-NO OTHER TYPE OF SEC INVOLVE; UNKNOWN TYPE OFSECURITIES

Unspecified Damages

AWARD AGAINST PARTY

06/07/2002

$600,000.00

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

Disclosure 2 of 15

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Arbitration Forum:

Case Initiated:

Case Number:

Allegations:

NASD

10/05/2001

01-04480

ACCOUNT ACTIVITY-BRCH OF FIDUCIARY DT; ACCOUNT ACTIVITY-MISREPRESENTATION; ACCOUNT ACTIVITY-OMISSION OF FACTS;ACCOUNT RELATED-FAILURE TO SUPERVISE





www.finra.org/awardsonline




Disposition:

Disposition Date:


COMMON STOCK; DO NOT USE-NO OTHER TYPE OF SEC INVOLVE

$1,191,980.00

AWARD AGAINST PARTY

02/13/2003

$147,372.70


Disclosure 3 of 15

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Arbitration Forum:

Case Initiated:

Case Number:

Allegations:



Disposition:

Disposition Date:


NASD

03/05/2003

03-01071

ACCOUNT RELATED-BREACH OF CONTRACT; ACCOUNT RELATED-ERRORS-CHARGES; ACCOUNT RELATED-FAILURE TO SUPERVISE;ACCOUNT RELATED-NEGLIGENCE


$162,000.00

AWARD AGAINST PARTY

06/21/2004

$81,454.01


Disclosure 4 of 15

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Arbitration Forum:

Allegations:

NASD

ACCOUNT ACTIVITY-BRCH OF FIDUCIARY DT; ACCOUNT ACTIVITY-CHURNING; ACCOUNT RELATED-MARGIN CALLS; ACCOUNT RELATED-NEGLIGENCE






Case Initiated:

Case Number:



Disposition:

Disposition Date:


02/21/2007

07-00468

COMMON STOCK; DO NOT USE-NO OTHER TYPE OF SEC INVOLVE;PREFERRED STOCK

$600,000.00

AWARD AGAINST PARTY

10/23/2007

$159,196.28


Disclosure 5 of 15

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Arbitration Forum:

Case Initiated:

Case Number:

Allegations:



Disposition:

Disposition Date:


FINRA

08/02/2011

11-02908

ACCOUNT ACTIVITY-BRCH OF FIDUCIARY DT; ACCOUNT ACTIVITY-CHURNING; ACCOUNT ACTIVITY-SUITABILITY; ACCOUNT RELATED-BREACHOF CONTRACT; ACCOUNT RELATED-FAILURE TO SUPERVISE; ACCOUNTRELATED-NEGLIGENCE

CERTIFICATE OF DEPOSIT; MUTUAL FUNDS

$240,000.00

AWARD AGAINST PARTY

12/09/2013

$219,073.69


Disclosure 6 of 15

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Allegations: ACCOUNT ACTIVITY-CHURNING; ACCOUNT ACTIVITY-UNAUTHORIZEDTRADING






Arbitration Forum:

Case Initiated:

Case Number:

Allegations:



Disposition:

Disposition Date:


FINRA

04/09/2015

15-00737

ACCOUNT ACTIVITY-CHURNING; ACCOUNT ACTIVITY-UNAUTHORIZEDTRADING

COMMON STOCK

$1,800,000.00

AWARD AGAINST PARTY

07/25/2016

$504,443.01


Disclosure 7 of 15

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Arbitration Forum:

Case Initiated:

Case Number:

Allegations:



Disposition:

Disposition Date:


FINRA

05/19/2015

15-00972

ACCOUNT ACTIVITY-BRCH OF FIDUCIARY DT; ACCOUNT ACTIVITY-FRAUD;ACCOUNT ACTIVITY-SUITABILITY; ACCOUNT ACTIVITY-UNAUTHORIZEDTRADING; ACCOUNT RELATED-BREACH OF CONTRACT; ACCOUNTRELATED-FAILURE TO SUPERVISE; ACCOUNT RELATED-NEGLIGENCE;ACCOUNT RELATED-OTHER

REVERSE CONVERTIBLES

$48,001.00

AWARD AGAINST PARTY

01/20/2016

$42,937.00


Disclosure 8 of 15

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Disclosure 8 of 15



Arbitration Forum:

Case Initiated:

Case Number:

Allegations:



Disposition:

Disposition Date:


FINRA

10/22/2015

15-02368

ACCOUNT ACTIVITY-BRCH OF FIDUCIARY DT; ACCOUNT ACTIVITY-FRAUD;ACCOUNT ACTIVITY-MISREPRESENTATION; ACCOUNT ACTIVITY-OMISSIONOF FACTS; ACCOUNT ACTIVITY-SUITABILITY; ACCOUNT RELATED-FAILURETO SUPERVISE; ACCOUNT RELATED-NEGLIGENCE

COMMON STOCK; PRIVATE EQUITIES; WARRANTS/RIGHTS

Unspecified Damages

AWARD AGAINST PARTY

12/06/2016

$155,000.00


Disclosure 9 of 15

i



Arbitration Forum:

Case Initiated:

Case Number:

Allegations:



Disposition:

Disposition Date:


NASD

07/08/1991

91-02064

ACCOUNT ACTIVITY-BRCH OF FIDUCIARY DT; ACCOUNT ACTIVITY-MISREPRESENTATION; ACCOUNT ACTIVITY-SUITABILITY; ACCOUNTACTIVITY-UNAUTHORIZED TRADING

COMMON STOCK; DO NOT USE-NO OTHER TYPE OF SEC INVOLVE;UNKNOWN TYPE OF SECURITIES

$10,658.00

AWARD AGAINST PARTY

08/11/1992

$10,658.00151©2020 FINRA. All rights reserved. Report about NATIONAL SECURITIES CORPORATION





Sum of All Relief Awarded: $10,658.00


Disclosure 10 of 15

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Arbitration Forum:

Case Initiated:

Case Number:

Allegations:



Disposition:

Disposition Date:


NASD

11/26/1991

91-03654

ACCOUNT ACTIVITY-BRCH OF FIDUCIARY DT; ACCOUNT ACTIVITY-OMISSION OF FACTS; ACCOUNT RELATED-BREACH OF CONTRACT;ACCOUNT RELATED-NEGLIGENCE


$54,572.00

AWARD AGAINST PARTY

09/24/1992

$60,029.20


Disclosure 11 of 15

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Arbitration Forum:

Case Initiated:

Case Number:

Allegations:



Disposition:

NASD

09/18/1992

92-03083

ACCOUNT ACTIVITY-SUITABILITY; DO NOT USE-NO OTHER CONTROVERSYINVOLVED

COMMON STOCK; DO NOT USE-NO OTHER TYPE OF SEC INVOLVE; LIMITEDPARTNERSHIPS

$93,250.00

AWARD AGAINST PARTY 152©2020 FINRA. All rights reserved. Report about NATIONAL SECURITIES CORPORATION





Disposition:

Disposition Date:


AWARD AGAINST PARTY

05/27/1993

$9,711.64


Disclosure 12 of 15

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Arbitration Forum:

Case Initiated:

Case Number:

Allegations:



Disposition:

Disposition Date:


NASD

12/24/1992

92-04120

DO NOT USE-NO OTHER CONTROVERSY INVOLVED; DO NOT USE-OTHER-OTHER


$22,569.92

AWARD AGAINST PARTY

07/29/1993

$15,668.75


Disclosure 13 of 15

i



Arbitration Forum:

Case Initiated:

Case Number:

Allegations:



NASD

09/25/1995

95-03882

ACCOUNT ACTIVITY-MANIPULATION; DO NOT USE-NO OTHERCONTROVERSY INVOLVED


$10,000.00153©2020 FINRA. All rights reserved. Report about NATIONAL SECURITIES CORPORATION






Disposition:

Disposition Date:


$10,000.00

AWARD AGAINST PARTY

04/22/1996

$4,207.62


Disclosure 14 of 15

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Arbitration Forum:

Case Initiated:

Case Number:

Allegations:



Disposition:

Disposition Date:


NASD

07/12/1999

99-02980

ACCOUNT ACTIVITY-BRCH OF FIDUCIARY DT; ACCOUNT ACTIVITY-CHURNING; ACCOUNT ACTIVITY-MISREPRESENTATION; DO NOT USE-NOOTHER CONTROVERSY INVOLVED


$250,000.00

AWARD AGAINST PARTY

03/31/2000

$0.00


Disclosure 15 of 15

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Arbitration Forum:

Case Initiated:

Case Number:

Allegations:

NASD

09/21/1999

99-04214

ACCOUNT ACTIVITY-BRCH OF FIDUCIARY DT; ACCOUNT ACTIVITY-MISREPRESENTATION; ACCOUNT RELATED-BREACH OF CONTRACT;ACCOUNT RELATED-NEGLIGENCE






Case Number:



Disposition:

Disposition Date:


99-04214


$105,750.00

AWARD AGAINST PARTY

03/08/2002

$15,750.00







End of Report

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