First Dallas Securities, Inc.

Allegations: FINRA ALLEGED FIRST DALLAS SECURITIES, INC. VIOLATED NASD CONDUCT RULES 2110, 1120(B), 2711(C)(2)(A), 2711 (G)(2), 2711(G)(3), 2711(H)(1)(A), 2711(H)(1)(B), 2711(H)(7), 2711 (H)(10), 2711(I) AND 3010. THESE RULES ARE IN RELATION TO RESEARCH REPORTS ISSUED, ALLOWING AGENTS TO TRADE DURING THE PROHIBITED TIME FRAME, FAILURE TO PROVIDE A 2711 ATTESTATION FOR 2007, DEVELOP & IMPLEMENT WSP'S FOR WATCH LISTS OR RESTRICTION LISTS, AND FAILURE TO DEVELOPE A WRITTEN CE PLAN FOR 2006 AND 2007. Status: Final Sanction Detail: FIRST DALLAS SECURITIES, INC WAS ISSUED A FINE OF $50,000.00 Summary: FDS RESEARCH REPORTS FOCUSED ON RECENT FINANCIAL PERFORMANCE OF SUBJECT COMPANIES AND HAD LIMITED DISTRIBUTION TO A SMALL NUMBER OF PRIVATE SUBSCRIBERS, MOST OF WHICH WERE INSTITUTIONAL INVESTORS. THIS LIMITED DISTRIBUTION WOULD NOT HAVE A MATERIAL IMPACT ON THE STOCK PRICE OF THE SUBJECT COMPANIES. FDS DOES NOT AND DID NOT PARTIFICPATE IN ANY INVESTMENT BANKING SERVICES, MARKET MAKING OR PROPRIETARY TRADING. NEGATING THE PROSPECT FOR THE POTENTIAL CONFLICTS OF INTEREST THAT COULD ARISE FROM THESE ACTIVITIES. FDS HAS DISCONTINUED THE PUBLISING OF RESEARCH REPORTS AS OF JUNE 2007. THE REMAINING CONCERNS HAVE BEEN ADDRESSED BY FDS IN CHANGES THE FIRM HAS MADE IN ITS COMPLIANCE DEPARTMENT TO ADDRESS ALL APPLICABLE RULES AND REGULATIONS.

Allegations: WITHOUT ADMITTING OR DENYING THE FINDINGS, THE FIRM CONSENTED TO THE SANCTIONS AND TO THE ENTRY OF FINDINGS THAT IT IMPROPERLY CHARGED TICKET CHARGES IN AT LEAST 449 TRANSACTIONS INVOLVING 129 ACCOUNTS FOR CLIENTS OF ITS AFFILIATED REGISTERED INVESTMENT ADVISOR (RIA). THE FINDINGS STATED THAT TRADES ON BEHALF OF THE CLIENTS WERE PLACED THROUGH THE FIRM'S TRADE PROCESSING PLATFORM, WHICH INCURRED TRANSACTION AND HANDLING FEES THAT WERE ASSESSED BY THE FIRM'S CLEARING FIRM. SOME OR ALL OF THESE FEES ARE PASSED ON BY THE FIRM TO CLIENTS IN THE FORM OF A TICKET CHARGE. IN SOME CASES, THE FIRM PERMITTED ITS REPRESENTATIVES (WHO ARE ALL DUALLY REGISTERED WITH THE RIA) TO DETERMINE THE AMOUNT OF THE TICKET CHARGE (IF ANY) THAT WOULD BE ASSESSED TO THEIR CLIENTS, THESE CHARGES WERE NOT UNIFORM. THE FIRM'S REPRESENTATIVES UTILIZED AT LEAST TWELVE DIFFERENT TICKET CHARGE STRUCTURES IN CONNECTION WITH TRADE PROCESSING, INCLUDING VARYING FLAT FEES, PER-SHARE FEES, AND HYBRID FEES. THESE FEES WERE DISCLOSED IN THE CUSTOMERS' ADVISORY AGREEMENTS WITH THE RIA. THE TOTAL AMOUNT OF OVERCHARGED TICKET CHARGES WAS $42,530, WHICH THE FIRM VOLUNTARILY REPAID TO THE AFFECTED CUSTOMERS WHEN THE CHARGES WERE DISCOVERED. THE FINDINGS ALSO INCLUDED THAT THE FIRM FAILED TO HAVE AN ADEQUATE SUPERVISORY SYSTEM IN PLACE TO ENSURE THAT EACH CUSTOMER WAS CHARGED ONLY THE FEE THAT WAS DISCLOSED IN THAT CUSTOMER'S ADVISORY AGREEMENT. AS A RESULT, THE FIRM OFTEN ASSESSED A TICKET CHARGE THAT WAS DIFFERENT THAN THE DISCLOSED AMOUNT, AND IN MANY CASES, THIS FEE RESULTED IN THE CUSTOMER BEING CHARGED A FEE THAT EXCEEDED THE AGREED AMOUNT. THESE IMPROPER CHARGES ALSO WERE ASSESSED IN CONNECTION WITH THE PROCESSING OF BLOCK TRADES, WHICH MAY HAVE RESULTED IN THE ASSESSMENT OF A HIGHER PROCESSING FEE FOR BROKERAGE TRANSACTIONS. Status: Final Sanction Detail: THE FIRM WAS CENSURED AND FINED $45,000. Summary: AS A RESULT OF THE FINDINGS THE FIRM NOW ONLY ASSESS A FLAT AND CONSISTENT FEE ON ALL OF THESE ADVISORY ACCOUNTS.

Allegations: ON 9/23/96, FIRST DALLAS SECURITIES, INC. (FDS) FILED AN APPLICATION FOR REG. AS A DEALER W/ THE COMMISSION AND FURNISHED INFORMATION THAT DURING THE PERIOD 1/22/91-7/23/96 A TOTAL OF 71 BUYS AND 45 SALES HAD BEEN EFFECTED IN THE ACCOUNTS OF 11 AL RESIDENTS IN AGGREGATE AMT OF $634,280.54, WHICH RESULTED IN 2 ACCEPTING OFFERS; 5 REJECTING AND 4 NOT RESPONDING TO OFFERS. BASED UPON A VIOLATION OF SECTION 8-6-3(A), CODE OF AL 1975, FOR EFFECTING TRANSACTIONS W/OUT BENEFIT OF REGISTRATION. A CONSENT ORDER WAS ENTERED ON 5/22/97, RESOLVING THE VIOLATION AND FDS WAS LEVIED AN ADMINISTRATION ASSESSMENT OF $5,000 AND INVESTIGATIVE COSTS OF $2500. Status: Final Sanction Detail: ON 9/23/96, FIRST DALLAS SECURITIES, INC. (FDS) FILED AN APPLICATION FOR REG. AS A DEALER W/ THE COMMISSION AND FURNISHED INFORMATION THAT DURING THE PERIOD 1/22/91-7/23/96 A TOTAL OF 71 BUYS AND 45 SALES HAD BEEN EFFECTED IN THE ACCOUNTS OF 11 AL RESIDENTS IN AGGREGATE AMT OF $634,280.54, WHICH RESULTED IN 2 ACCEPTING OFFERS; 5 REJECTING AND 4 NOT RESPONDING TO OFFERS. BASED UPON A VIOLATION OF SECTION 8-6-3(A), CODE OF AL 1975, FOR EFFECTING TRANSACTIONS W/OUT BENEFIT OF REGISTRATION. A CONSENT ORDER WAS ENTERED ON 5/22/97, RESOLVING THE VIOLATION AND FDS WAS LEVIED AN ADMINISTRATION ASSESSMENT OF $5,000 AND INVESTIGATIVE COSTS OF $2500. Summary: ON 9/23/96, FIRST DALLAS SECURITIES, INC. (FDS) FILED AN APPLICATION FOR REG. AS A DEALER W/ THE COMMISSION AND FURNISHED INFORMATION THAT DURING THE PERIOD 1/22/91-7/23/96 A TOTAL OF 71 BUYS AND 45 SALES HAD BEEN EFFECTED IN THE ACCOUNTS OF 11 AL RESIDENTS IN AGGREGATE AMT OF $634,280.54, WHICH RESULTED IN 2 ACCEPTING OFFERS; 5 REJECTING AND 4 NOT RESPONDING TO OFFERS. BASED UPON A VIOLATION OF SECTION 8-6-3(A), CODE OF AL 1975, FOR EFFECTING TRANSACTIONS W/OUT BENEFIT OF REGISTRATION. A CONSENT ORDER WAS ENTERED ON 5/22/97, RESOLVING THE VIOLATION AND FDS WAS LEVIED AN ADMINISTRATION ASSESSMENT OF $5,000 AND INVESTIGATIVE COSTS OF $2500.

Allegations: THE FIRM TRANSACTED BUSINESS (2 BUY ORDERS) IN IDAHO AS A BROKER-DEALER WITHOUT BEING REGISTERED AS A BROKER-DEALER IN IDAHO. Status: Final Sanction Detail: FIRM AGREED TO PAY A CIVIL PENALTY OF $500 WITHIN THIRTY (30) DAYS OF THE DATE OF THE FINAL ORDER. THE FINE WAS PAID ON MARCH 7, 2001. Summary: AS PART OF THE REVIEW OF THE FIRM'S BROKER-DEALER REGISTRATION APPLICATION, IDAHO REQUESTED INFORMATION REGARDING ANY SECURITIES BUSINESS CONDUCTED BY THE FIRM IN IDAHO. THE FIRM ANSWERED BY INDICATING THAT IT CURRENTLY HAS AN ACCOUNT THAT WAS OPENED ON JUNE 18, 1999 ON BEHALF OF A CALIFORNIA CLIENT. ON OCTOBER 18, 2000 THE FIRM WAS NOTIFIED THAT THE CLIENT HAS RELOCATED TO IDAHO. FOLLOWING THE CLIENT'S MOVE TO IDAHO, THE FIRM EXECUTED TWO "BUY" ORDER ON BEHALF OF THE CLIENT ON OCTOBER 27, 2000 AND ON NOVEMBER 6, 2000 RESPECTIVELY.

Allegations: FINRA RULE 2010, NASD RULES 1017(A)(4), 2110: THE FIRM FAILED TO FILE FOR APPROVAL BY FINRA OF A MATERIAL CHANGE IN OWNERSHIP OR CONTROL, RELATED TO THE TRANSFER OF OWNERSHIP FROM THE FIRM'S CHAIRMAN AND MAJORITY SHAREHOLDER AND EXECUTIVES TO HIS RELATIVES WHO WERE AT THAT TIME MINORITY SHAREHOLDERS, AT LEAST 30 DAYS PRIOR TO A 25% OR GREATER INDIRECT CHANGE IN OWNERSHIP OR CONTROL. THE FIRM IMPLEMENTED A SUCCESSION PLAN THAT RESULTED IN THE TRANSFER OF OWNERSHIP FROM THE FIRM'S CHAIRMAN AND MAJORITY SHAREHOLDER TO HIS RELATIVES WHO WERE AT THAT TIME MINORITY SHAREHOLDERS AND THE TRANSFER REPRESENTED 27.91% OF THE VOTING SHARES IN THE FIRM'S HOLDING COMPANY. THE FIRM FAILED TO FILE FOR APPROVAL BY FINRA OF A MATERIAL CHANGE IN OWNERSHIP OR CONTROL RELATED TO THE TRANSFER UNTIL OVER FOUR YEARS AFTER THE TRANSFER HAD TAKEN PLACE. Status: Final Sanction Detail: WITHOUT ADMITTING OR DENYING THE FINDINGS, THE FIRM CONSENTED TO THE DESCRIBED SANCTIONS AND TO THE ENTRY OF FINDINGS, THEREFORE THE FIRM IS CENSURED AND FINED $10,000. THE FIRM HAS FILED THE MATERIAL CHANGE IN OWNERSHIP AND HAS BEEN APPROVED BY FINRA AS OF JUNE 2010.

Allegations: FIRST DALLAS SECURITIES, INC. HAD ENGAGED IN SECURITIES TRANSACTIONS IN MASSACHUSETTS AT TIMES WHEN IT WAS NOT REGISTERED AS A BROKER-DEALER IN MASSACHUSETTS. Status: Final Sanction Detail: FINE OF $6500.00 WAS PAID ON AUGUST 26, 1999. Summary: CONSENT ORDER APPROVING REGISTRATION UPON CONDITIONS WAS ENTERED AUGUST 26, 1999. ACTION STATUS IS FINAL.