1 St Discount Brokerage, Inc.

Allegations: FAILURE TO DISCLOSE DETAILS OF PAYMENT FOR ORDER FLOW ON CONFIRMATIONS, AT TIME OF ACCOUNT OPENING AND ANNUALLY THEREAFTER. FAILURE TO QUARTERLY DISCLOSE ASPECTS OF PAYMENT FOR ORDER FLOW AND PROFIT SHARING WITH LAMPOST CAPITAL. Status: Final Sanction Detail: 4/16/2003 Summary: THIS DRP IS DUPLICATE

Allegations: FAILURE TO DISCLOSE DETAILS OF PAYMENT FOR ORDER FLOW ON CONFIRMATIONS, AT TIME OF ACCOUNT OPENING AND ANNUALY THEREAFTER. FAILURE TO QUATERLY DISCLOSE ASPECTS OF PAYMENT FOR ORDER FLOW AND PROFIT SHARING WITH LAMPOST CAPITAL. Status: Final Sanction Detail: 4/16/2003

Allegations: CONDUCTING INVESTMENT ADVISORY BUSINESS IN FL WITHOUT HAVING AT LEAST ONE PRINCIPAL REGISTERED INT HE STATE OF FLORIDA, IN VIOLATION OF CHAPTER 517.12(4). Status: Final Sanction Detail: $2500.00 PAID ON 06/25/2004 Summary: FINED PAID, FIRM PRINCIPAL REGISTERED IN THE STATE OF FL

Allegations: THE FIRM DID NOT REASONABLY MONITOR THE OUTSIDE BUSINESS ACTIVITIES OF REGISTERED REPRESENTATIVE CHARLES PARSONS (CRD# 2642216) FOR COMPLIANCE WITH NASD RULE 3030. PARSONS INFORMED THE FIRM THAT HE INTENDED TO PERFORM CLERICAL SERVICES FOR A COMPANY INVOLVED IN THE SECURITIES FIELD, AND THE FIRM TREATED PARSONS' ACTIVITIES AS NOT INVESTMENT-RELATED. MORE THOROUGH MONITORING BY THE FIRM MAY HAVE UNCOVERED PARSONS' TRUE OUTSIDE BUSINESS ACTIVITIES. BEGINNING NO LATER THAN FEB. 2003 AND CONTINUING UNTIL OCTOBER 2003, PARSONS CIRCULATED, OR CAUSED TO BE CIRCULATED, MISLEADING, EXGERRATED, AND UNWARRANTED INVESTMENT OPINIONS AND RESEARCH REPORTS TOUTING HIGHLY SPECULATIVE OVER-THE-COUNTER BULLETIN BOARD AND PINK SHEET SECURITIES AND CONTAINING UNSUBSTANTIATED PRICE PROJECTIONS. PARSONS' INVESTMENT OPINIONS WERE NOT BASED ON PRINCIPALS OF FAIR DEALINGS AND GOOD FAITH AND THEY FAILED TO PROVIDE SOUND BASIS FOR EVALUATING THE FACTS RELATING TO THE SECURITIES HE COVERED. AS A RESULT, IN PART, OF 1ST DISCOUNT'S SUPERVISORY DEFICIENCIES, PARSONS' MISCONDUCT WAS NOT DETECTED BY THE FIRM. PARSONS VIOLATED NASD CONDUCT RULES 2110, 2120, 2210, 2711, AND 3030. AND SECTION 10(B) OF THE SECURITIES EXCHANGE ACT OF 1934 AND RULE 10(B)-5. PARSONS WAS BARRED BY THE NAASD IN AUGUST 2004 AS A CONSEQUENCE OF HIS MISCONDUCT. THE FIRM'S SUPERVISORY SYSTEM DID NOT PROVIDE FOR SUPERVISION REASONABLY DESIGNED TO ACHIEVE COMPLILANCE WITH APPLICABLE SECURITIES LAWS AND REGULATIONS AND NASD RULES CONCERNING COMPLIANCE WITH CONDUCT RULE 3030. Status: Final Sanction Detail: AWC AND A FINE OF $12,500. Summary: AWC ACCEPTED BY THE NASD, FINE PAID