World Equity Group, Inc.

Allegations: VIOLATIONS OF FINRA RULES REGARDING THE SUPERVISION OF ADVERTISING, COMMUNICATIONS WITH THE PUBLIC AND LICENSING AND REGISTRATION FUNCTIONS. VIOLATIONS INCLUDE FINRA RULE 2010, NASD RULES 2110, 2210(B)(2)(A), 2210(D)(1)(A), 2210(D)(1)(B), 2210(D)(2)(C)(I), 3010, 3010(A), 3010(B), 3110(A), INTERPRETATIVE MATERIAL 2210-1 ALLEGING THAT THE FIRM PERMITTED ONE OF ITS REGISTERED REPRESENTATIVES TO PUBLISH ADVERTISEMENTS THAT FAILED TO PROVIDE A SOUND BASIS FOR A READER TO EVALUATE THE PRODUCTS AND SERVICES BEING OFFERED, CONTAINED EXAGGERATED, UNWARRANTED AND MISLEADING STATEMENTS, AND FAILED TO DISCLOSE THE FIRM'S NAME. Status: Final Sanction Detail: THE $50,000 FINE WAS ASSESSED JOINTLY AND SEVERALLY AND PAID BY CHECK. Summary: LETTER OF AWC WAS SIGNED ON DEC. 5, 2011.

Allegations: WITHOUT ADMITTING OR DENYING THE FINDINGS, THE FIRM CONSENTED TO THE SANCTIONS AND TO THE ENTRY OF FINDINGS THAT IT FAILED TO IMPLEMENT A REASONABLY DESIGNED ANTI-MONEY LAUNDERING (AML) PROGRAM TO DETECT, INVESTIGATE AND REPORT POTENTIALLY SUSPICIOUS ACTIVITY. THE FINDINGS STATED THAT THE FIRM'S WRITTEN SUPERVISORY PROCEDURES (WSPS) PROVIDED SPECIFIC EXAMPLES OF RED FLAGS INDICATIVE OF POTENTIALLY SUSPICIOUS ACTIVITIES WHICH SHOULD HAVE TRIGGERED ADDITIONAL DUE DILIGENCE UNDER THE FIRM'S EXISTING AML PROGRAM. WHEN REVIEWED, THE FIRM COULD NOT EVIDENCE IMPLEMENTATION OF ITS AML SUSPICIOUS ACTIVITY MONITORING PROGRAM AS IT FAILED TO DETECT, INVESTIGATE AND REPORT RED FLAGS OF POTENTIALLY SUSPICIOUS ACTIVITY RELATED TO THE DEPOSIT AND LIQUIDATION OF LOW-PRICED SECURITIES INCLUDING, BUT NOT LIMITED TO, VARIOUS TRANSACTIONS BY PERSONS WHILE THOSE PERSONS AT LEAST POTENTIALLY MAY HAVE BEEN IN POSSESSION OF MATERIAL, NON-PUBLIC INFORMATION. THE FIRM DID NOT EMPLOY ANY MANUAL OR AUTOMATED SURVEILLANCES TO CAPTURE POTENTIALLY SUSPICIOUS MONEY MOVEMENTS OR TRADING ACTIVITY, BUT INSTEAD IMPROPERLY RELIED ON ITS CLEARING FIRM TO RAISE POTENTIAL RED FLAGS TO ITS ATTENTION. THE FIRM'S INVESTIGATIONS OF THOSE RED FLAGS DETECTED BY ITS CLEARING FIRM WERE ALSO HANDLED INADEQUATELY. THE FIRM'S 2011 AML COMPLIANCE PROGRAM INDEPENDENT 2011 TEST WAS NOT ADEQUATE AS THE PERSON CONDUCTING THE TEST DID NOT TAKE APPROPRIATE STEPS TO AUDIT FOR DEFICIENCIES IN THE SUSPICIOUS ACTIVITY MONITORING PROGRAM. THE FINDINGS ALSO STATED THAT THE FIRM FAILED TO HAVE A REASONABLE SUPERVISORY SYSTEM TO ENSURE COMPLIANCE WITH SECTION 5 OF THE SECURITIES ACT OF 1933. THE FIRM FAILED TO CONDUCT A REASONABLE SEARCHING INQUIRY INTO THE TRADABILITY OF THE SECURITIES BY NOT INDEPENDENTLY CORROBORATING INFORMATION AND DOCUMENTATION OBTAINED THROUGH SOURCES AND THEREFORE FAILED TO EVIDENCE THAT AN ADEQUATE INVESTIGATION WAS CONDUCTED BY A REGISTERED PRINCIPAL. THE FINDINGS ALSO INCLUDED THAT THE FIRM FAILED TO ENFORCE ITS OWN INFORMATION BARRIERS PROCEDURES AND AS A RESULT, ALLOWED POTENTIALLY SUSPICIOUS TRANSACTIONS TO GO UNDETECTED, AND EMPLOYEES WHO WERE NOT SUPPOSED TO BE PRIVY TO MATERIAL, NON-PUBLIC INFORMATION TO HAVE SUCH ACCESS WITHOUT FOLLOWING ITS OWN PROCEDURES TO GIVE EMPLOYEES THAT ACCESS. FINRA FOUND THAT DUE TO ERRORS IN THE PROCESS OF TRANSFERRING REPRESENTATIVES AT A NEW BRANCH TO THE FIRM, THE EMAILS OF THE REPRESENTATIVES LOCATED AT THAT BRANCH WERE NOT MAINTAINED AND PRESERVED BEFORE APRIL 13, 2012. IN ADDITION, DUE TO TECHNOLOGY LINKING ISSUES, THE FIRM FAILED TO MAINTAIN BUSINESS-RELATED EMAILS FOR REPRESENTATIVES WHO USED THEIR PERSONAL EMAILS FOR BUSINESS PURPOSES, EVEN THOUGH THE FIRM WAS AWARE OF THE USE OF THE NON-FIRM EMAIL DOMAINS. FINRA ALSO FOUND THAT THE FIRM FAILED TO ESTABLISH ACCOUNTS AND MAINTAIN ACCOUNT RECORDS FOR NEW CUSTOMERS INVESTING IN AN OFFERING AND FAILED TO MAKE REASONABLE EFFORTS TO OBTAIN ADEQUATE INFORMATION IN REGARDS TO THOSE CUSTOMERS. IN ADDITION, FINRA DETERMINED THAT THE FIRM FAILED TO HAVE A SYSTEM IN PLACE TO ENSURE THE SUITABILITY OF NON-TRADITIONAL EXCHANGE-TRADED FUNDS (ETFS) AND LACKED TRAINING AND SUPERVISION OF THESE PRODUCTS AND TRANSACTIONS. THERE WERE OVER 100 NON-TRADITIONAL ETFS THAT WERE HELD MORE THAN ONE TRADING DAY, YET THOSE TRANSACTIONS WERE NOT FLAGGED FOR REVIEW. THE FIRM INSUFFICIENTLY DOCUMENTED THAT ADEQUATE DILIGENCE WAS CONDUCTED WITH RESPECT TO THE PRIVATE PLACEMENTS AND NON-TRADED REAL ESTATE INVESTMENT TRUSTS (REITS). THE FIRM'S WSPS WERE INADEQUATE IN THAT THEY GENERICALLY REFERENCED CCO REVIEW, BUT FAILED TO IDENTIFY SPECIFIC STEPS TO BE TAKEN AND DID NOT OUTLINE HOW THE FIRM WOULD DOCUMENT AND EVIDENCE THE DUE DILIGENCE. THE FIRM ALSO FAILED TO ESTABLISH AN ADEQUATE SUPERVISORY SYSTEM FOR THE REVIEW OF ACTIVITY IN AN AVERAGE PRICE ACCOUNT, RESULTING IN NUMEROUS OPTIONS ACTIVITIES OCCURRING IN UNAPPROVED ACCOUNTS. Status: Final Sanction Detail: THE FIRM WAS CENSURED AND FINED $225,000. Summary: TO AVOID THE UNCERTAINTY AND COST ASSOCIATED WITH A HEARING AND IN AN EFFORT TO PUT THESE LEGACY ISSUES BEHIND US, WORLD EQUITY GROUP PURSUED SETTLEMENT DISCUSSIONS AS SOON AS THEY WERE MADE AVAILABLE TO US. SINCE THESE ISSUES WERE RECOGNIZED BY WORLD EQUITY GROUP, THE FIRM HAS RESTRUCTURED ITS COMPLIANCE AND SUPERVISION STAFF AND ADDED SOME KEY NEW HIRES WHICH BRING MULTIPLE YEARS OF EXPERIENCE TO THE TEAM. THE FIRM HAS ALSO REWRITTEN CERTAIN SECTIONS OF ITS WSPS SO AS TO FURTHER STRENGTHEN ITS PROCEDURES.

Allegations: WITHOUT ADMITTING OR DENYING THE FINDINGS, THE FIRM CONSENTED TO THE SANCTIONS AND TO THE ENTRY OF FINDINGS THAT IT FAILED TO ESTABLISH AND MAINTAIN A SUPERVISORY SYSTEM AND ESTABLISH, MAINTAIN AND ENFORCE WRITTEN SUPERVISORY PROCEDURES REASONABLY DESIGNED TO IDENTIFY AND PREVENT POTENTIALLY UNSUITABLE EXCESSIVE TRADING OF EQUITY SECURITIES. THE FINDINGS STATED THAT AS A RESULT OF ITS SUPERVISORY DEFICIENCIES, THE FIRM FAILED TO IDENTIFY A CERTAIN CUSTOMER'S ACCOUNT THAT EXHIBITED POTENTIALLY UNSUITABLE EXCESSIVE TRADING ACTIVITY THAT SHOULD HAVE CAUSED FURTHER INVESTIGATION BY THE FIRM'S COMPLIANCE DEPARTMENT. Status: Final Sanction Detail: THE FIRM WAS CENSURED AND FINED $50,000. Summary: TO AVOID THE UNCERTAINTY AND COST ASSOCIATED WITH A HEARING AND IN AN EFFORT TO PUT THIS LEGACY ISSUE BEHIND US, WORLD EQUITY GROUP PURSUED SETTLEMENT DISCUSSIONS AS SOON AS THEY WERE MADE AVAILABLE. SINCE THIS ISSUE WAS FIRST DISCOVERED BY WORLD EQUITY GROUP IN 2010, THE FIRM HAS RESTRUCTURED ITS COMPLIANCE AND SUPERVISORY STAFF, REWRITTEN CERTAIN PROVISIONS OF ITS WSPS, AND INCREASED EXCEPTION REPORTING TO FURTHER STRENGTHEN ITS COMPLIANCE PRACTICES.

Allegations: DURING THE PERIOD OF JULY 1, 2016 THROUGH DECEMBER 31,2016 (THE "REVIEW PERIOD"), WORLD EQUITY GROUP, INC. FAILED TO REPORT TO TRACE 197 TRANSACTIONS IN CORPORATE DEBT SECURITIES WITHIN THE TIME REQUIRED BY FINRA RULE 6730(A). WORLD EQUITY GROUP'S LATE REPORTING RESULTED FROM DELAYS CAUSED BY FIRM EMPLOYEES AND UNTIMELY AMENDMENTS OR CORRECTIONS MADE TO TRACE REPORTS PREVIOUSLY SUBMITTED BY THE FIRM OR ITS CLEARING FIRM. WORLD EQUITY GROUP'S CONDUCT CONSTITUTES SEPARATE AND DISTINCT VIOLATIONS OF FINRA RULE 6730(A) AND A PATTERN AND PRACTICE OF LATE REPORTING WITHOUT EXCEPTIONAL CIRCUMSTANCES, IN VIOLATION OF FINRA RULE 2010. Status: Final Sanction Detail: FINE OF $18,500 LEVIED AGAINST THE FIRM WAS PAID VIA CHECK #324321 MAILED ON 11/11/19 (THE ORIGINAL CHECK SENT IN LATE OCTOBER WAS LOST). Summary: THE AWC WAS SIGNED BY FIRM PRESIDENT, RICH BABJAK, ON 10/09/2019 AND SIGNED AND ACCEPTED BY FINRA ON 10/18/2019.

Allegations: FLORIDA ALLEGED THAT THE FIRM FAILED TO TIMELY FILE AN INSURANCE AGENCY APPLICATION. Status: Final Sanction Detail: FIRM PAID ADMINISTRATIVE PENALTY OF $1,000 IN OCTOBER OF 2007. Summary: FIRM, IN AN EFFORT TO MOVE ALONG ITS INSURANCE APPLICATION IN THE STATE OF FLORIDA, ON OCT. 12, 2007 SIGNED A CONSENT ORDER AND PAID A $1,000 'ADMINISTRATIVE FEE'. AT THE TIME, FIRM WAS LED TO BELIEVE BY FL THAT THIS WOULD NOT BE A REPORTABLE EVENT.

Allegations: FROM APRIL 2013 THROUGH MARCH OF 2017, THE FIRM FAILED TO ESTABLISH, MAINTAIN AND ENFORCE A SUPERVISORY SYSTEM AND WRITTEN SUPERVISORY PROCEDURES REASONABLY DESIGNED TO ENSURE THAT REPRESENTATIVES' RECOMMENDATIONS OF VARIABLE ANNUITIES COMPLIED WITH APPLICABLE SECURITIES LAWS AND REGULATIONS, AND FINRA RULES. AS A RESULT, THE FIRM VIOLATED FINRA RULES 2330(C) AND (D), NASD RULE 3010 (FOR CONDUCT BEFORE DECEMBER 1, 2014), FINRA RULE 3110 (FOR CONDUCT ON AND AFTER DECEMBER 1, 2014 AND FINRA RULE 2010. Status: Final Sanction Detail: THE FIRM WAS CENSURED AND FINED $100,000 AND ORDERED TO PAY NOT LESS THAN $380,000 IN RESTITUTION TO CUSTOMERS WHO PURCHASED L-SHARE VARIABLE ANNUITY CONTRACTS WITH LONG TERM RIDERS AND NO PERSISTENCY CREDITS FROM JUNE 1, 2013 THROUGH MAY 31, 2018 AND WHO CURRENTLY HOLD THOSE CONTRACTS AT THE FIRM. Summary: FROM APRIL 2013 THROUGH MARCH OF 2017, THE FIRM FAILED TO ESTABLISH, MAINTAIN AND ENFORCE A SUPERVISORY SYSTEM AND WRITTEN SUPERVISORY PROCEDURES REASONABLY DESIGNED TO ENSURE THAT REPRESENTATIVES' RECOMMENDATIONS OF VARIABLE ANNUITIES COMPLIED WITH APPLICABLE SECURITIES LAWS AND REGULATIONS, AND FINRA RULES. AS A RESULT, THE FIRM VIOLATED FINRA RULES 2330(C) AND (D), NASD RULE 3010 (FOR CONDUCT BEFORE DECEMBER 1, 2014), FINRA RULE 3110 (FOR CONDUCT ON AND AFTER DECEMBER 1, 2014 AND FINRA RULE 2010.

Allegations: THE FIRM DID NOT FILE A REPORTABLE EVENT TO THE NORTH CAROLINA DEPARTMENT OF INSURANCE WITHIN THE REQUIRED TIME FRAME ACCORDING TO THEIR STATE STATUTES. Status: Final Sanction Detail: THE $250.00 FINE WAS PAID ON 1/03/2018 Summary: THE FIRM SELF-REPORTED TO THE NORTH CAROLINA INSURANCE DERPARTMENT UPON DISCOVERY THAT THE ORIGINAL ISSUE WAS A REPORTABLE EVENT ACCORDING TO THE STATES INSURANCE LAWS. SINCE IT WAS PAST THE 30 DAY REPORTING PERIOD, THE NORTH CAROLINA INSURANCE DEPARTMENT SENT THE FIRM A SETTLEMENT AGREEMENT (WHICH INCLUDED A STIPULATION THAT THE AGREEMENT WOULD HAVE THE FULL EFFECT OF THE ORDER OF THE COMMISSIONER) AND ASSESSED A SMALL CIVIL FINE.

Allegations: VIOLATIONS OF FINRA RULES REGARDING THE SUBMISSION OF OATS REPORTABLE TRANSACTIONS. THE FIRM DID NOT QUALIFY FOR EXCLUSION FROM THE OATS REPORTING REQUIREMENTS BECAUSE IT ROUTED ITS ORDERS THROUGH TWO REPORTING MEMBERS. Status: Final Sanction Detail: A CENSURE AND A $15,000 FINE WERE IMPOSED. Summary: THE FIRM SIGNED A LETTER OF ACCEPTANCE, WAIVER AND CONSENT ON 12/12/2011. THE OATS REPORTING REQUIREMENTS HAVE BEEN CORRECTED.

Allegations: WITHOUT ADMITTING OR DENYING THE FINDINGS, THE FIRM CONSENTED TO THE SANCTIONS AND TO THE ENTRY OF FINDINGS THAT IT FAILED TO REPORT TRANSACTIONS IN TRADE REPORTING AND COMPLIANCE ENGINE (TRACE)-ELIGIBLE SECURITIZED PRODUCTS TO TRACE WITHIN THE TIME REQUIRED BY FINRA RULE 6730 Status: Final Sanction Detail: THE FIRM WAS CENSURED AND FINED $7,500.

Allegations: WITHOUT ADMITTING OR DENYING THE FINDINGS, THE FIRM CONSENTED TO THE SANCTIONS AND TO THE ENTRY OF FINDINGS THAT IT FAILED TO IMPLEMENT A REASONABLY DESIGNED ANTI-MONEY LAUNDERING (AML) PROGRAM TO DETECT, INVESTIGATE AND REPORT POTENTIALLY SUSPICIOUS ACTIVITY. THE FINDINGS STATED THAT THE FIRM'S WRITTEN SUPERVISORY PROCEDURES (WSPS) PROVIDED SPECIFIC EXAMPLES OF RED FLAGS INDICATIVE OF POTENTIALLY SUSPICIOUS ACTIVITIES WHICH SHOULD HAVE TRIGGERED ADDITIONAL DUE DILIGENCE UNDER THE FIRM'S EXISTING AML PROGRAM. WHEN REVIEWED, THE FIRM COULD NOT EVIDENCE IMPLEMENTATION OF ITS AML SUSPICIOUS ACTIVITY MONITORING PROGRAM AS IT FAILED TO DETECT, INVESTIGATE AND REPORT RED FLAGS OF POTENTIALLY SUSPICIOUS ACTIVITY RELATED TO THE DEPOSIT AND LIQUIDATION OF LOW-PRICED SECURITIES INCLUDING, BUT NOT LIMITED TO, VARIOUS TRANSACTIONS BY PERSONS WHILE THOSE PERSONS AT LEAST POTENTIALLY MAY HAVE BEEN IN POSSESSION OF MATERIAL, NON-PUBLIC INFORMATION. THE FIRM DID NOT EMPLOY ANY MANUAL OR AUTOMATED SURVEILLANCES TO CAPTURE POTENTIALLY SUSPICIOUS MONEY MOVEMENTS OR TRADING ACTIVITY, BUT INSTEAD IMPROPERLY RELIED ON ITS CLEARING FIRM TO RAISE POTENTIAL RED FLAGS TO ITS ATTENTION. THE FIRM'S INVESTIGATIONS OF THOSE RED FLAGS DETECTED BY ITS CLEARING FIRM WERE ALSO HANDLED INADEQUATELY. THE FIRM'S 2011 AML COMPLIANCE PROGRAM INDEPENDENT 2011 TEST WAS NOT ADEQUATE AS THE PERSON CONDUCTING THE TEST DID NOT TAKE APPROPRIATE STEPS TO AUDIT FOR DEFICIENCIES IN THE SUSPICIOUS ACTIVITY MONITORING PROGRAM. THE FINDINGS ALSO STATED THAT THE FIRM FAILED TO HAVE A REASONABLE SUPERVISORY SYSTEM TO ENSURE COMPLIANCE WITH SECTION 5 OF THE SECURITIES ACT OF 1933. THE FIRM FAILED TO CONDUCT A REASONABLE SEARCHING INQUIRY INTO THE TRADABILITY OF THE SECURITIES BY NOT INDEPENDENTLY CORROBORATING INFORMATION AND DOCUMENTATION OBTAINED THROUGH SOURCES AND THEREFORE FAILED TO EVIDENCE THAT AN ADEQUATE INVESTIGATION WAS CONDUCTED BY A REGISTERED PRINCIPAL. THE FINDINGS ALSO INCLUDED THAT THE FIRM FAILED TO ENFORCE ITS OWN INFORMATION BARRIERS PROCEDURES AND AS A RESULT, ALLOWED POTENTIALLY SUSPICIOUS TRANSACTIONS TO GO UNDETECTED, AND EMPLOYEES WHO WERE NOT SUPPOSED TO BE PRIVY TO MATERIAL, NON-PUBLIC INFORMATION TO HAVE SUCH ACCESS WITHOUT FOLLOWING ITS OWN PROCEDURES TO GIVE EMPLOYEES THAT ACCESS. FINRA FOUND THAT DUE TO ERRORS IN THE PROCESS OF TRANSFERRING REPRESENTATIVES AT A NEW BRANCH TO THE FIRM, THE EMAILS OF THE REPRESENTATIVES LOCATED AT THAT BRANCH WERE NOT MAINTAINED AND PRESERVED BEFORE APRIL 13, 2012. IN ADDITION, DUE TO TECHNOLOGY LINKING ISSUES, THE FIRM FAILED TO MAINTAIN BUSINESS-RELATED EMAILS FOR REPRESENTATIVES WHO USED THEIR PERSONAL EMAILS FOR BUSINESS PURPOSES, EVEN THOUGH THE FIRM WAS AWARE OF THE USE OF THE NON-FIRM EMAIL DOMAINS. FINRA ALSO FOUND THAT THE FIRM FAILED TO ESTABLISH ACCOUNTS AND MAINTAIN ACCOUNT RECORDS FOR NEW CUSTOMERS INVESTING IN AN OFFERING AND FAILED TO MAKE REASONABLE EFFORTS TO OBTAIN ADEQUATE INFORMATION IN REGARDS TO THOSE CUSTOMERS. IN ADDITION, FINRA DETERMINED THAT THE FIRM FAILED TO HAVE A SYSTEM IN PLACE TO ENSURE THE SUITABILITY OF NON-TRADITIONAL EXCHANGE-TRADED FUNDS (ETFS) AND LACKED TRAINING AND SUPERVISION OF THESE PRODUCTS AND TRANSACTIONS. THERE WERE OVER 100 NON-TRADITIONAL ETFS THAT WERE HELD MORE THAN ONE TRADING DAY, YET THOSE TRANSACTIONS WERE NOT FLAGGED FOR REVIEW. THE FIRM INSUFFICIENTLY DOCUMENTED THAT ADEQUATE DILIGENCE WAS CONDUCTED WITH RESPECT TO THE PRIVATE PLACEMENTS AND NON-TRADED REAL ESTATE INVESTMENT TRUSTS (REITS). THE FIRM'S WSPS WERE INADEQUATE IN THAT THEY GENERICALLY REFERENCED CCO REVIEW, BUT FAILED TO IDENTIFY SPECIFIC STEPS TO BE TAKEN AND DID NOT OUTLINE HOW THE FIRM WOULD DOCUMENT AND EVIDENCE THE DUE DILIGENCE. THE FIRM ALSO FAILED TO ESTABLISH AN ADEQUATE SUPERVISORY SYSTEM FOR THE REVIEW OF ACTIVITY IN AN AVERAGE PRICE ACCOUNT, RESULTING IN NUMEROUS OPTIONS ACTIVITIES OCCURRING IN UNAPPROVED ACCOUNTS. Status: Final Sanction Detail: THE FIRM WAS CENSURED AND FINED $225,000. Summary: TO AVOID THE UNCERTAINTY AND COST ASSOCIATED WITH A HEARING AND IN AN EFFORT TO PUT THESE LEGACY ISSUES BEHIND US, WORLD EQUITY GROUP PURSUED SETTLEMENT DISCUSSIONS AS SOON AS THEY WERE MADE AVAILABLE TO US. SINCE THESE ISSUES WERE RECOGNIZED BY WORLD EQUITY GROUP, THE FIRM HAS RESTRUCTURED ITS COMPLIANCE AND SUPERVISION STAFF AND ADDED SOME KEY NEW HIRES WHICH BRING MULTIPLE YEARS OF EXPERIENCE TO THE TEAM. THE FIRM HAS ALSO REWRITTEN CERTAIN SECTIONS OF ITS WSPS SO AS TO FURTHER STRENGTHEN ITS PROCEDURES.

Allegations: DURING THE REVIEW PERIOD, THE FIRM FAILED TO REPORT TO TRACE 83 TRANSACTIONS IN TRACE-ELIGIBLE CORPORATE DEBT SECURITIES WITHIN THE TIMEFRAME REQUIRED BY FINRA RULE 6730. THESE 83 REPORTS CONSTITUTED 7.2 PERCENT OF THE FIRM'S TOTAL TRACE-ELIGIBLE TRANSACTIONS IN CORPORATE DEBT SECURITIES TO BE REPORTED TO TRACE DURING THE REVIEW PERIOD. Status: Final Sanction Detail: A CENSURE AND A FINE OF $15,000 FOR THE ABOVE TRACE REPORTING FINDINGS.

Allegations: THE FIRM DID NOT FILE A REPORTABLE EVENT TO THE NORTH CAROLINA DEPARTMENT OF INSURANCE WITHIN THE REQUIRED TIMEFRAME ACCORDING TO THEIR STATUTES. Status: Final Sanction Detail: THE $250.00 FINE WAS PAID ON 12/09/2013 Summary: THE FIRM SELF-REPORTED TO THE NORTH CAROLINA INSURANCE DERPARTMENT UPON DISCOVERY THAT THE ORIGINAL ISSUE WAS A REPORTABLE EVENT. SINCE IT WAS PAST THE 30 DAY REPORTING PERIOD, THE NORTH CAROLINA INSURANCE DEPARTMENT SENT THE FIRM A SETTLEMENT AGREEMENT (WHICH INCLUDED A STIPULATION THAT THE AGREEMENT WOULD HAVE THE FULL EFFECT OF THE ORDER OF THE COMMISSIONER) AND ASSESSED A SMALL CIVIL FINE.