(1) COUNT ONE, THIRD DEGREE MISAPPLICATION OF ENTRUSTED PROPERTY (N.J.S.A. 2C:21-15), (2) FELONY, (3) PLEADED GUILTY

FELONY

A. PLEADED GUILTY; B. 12/23/2008; C. PRE-TRIAL INTERVENTION PROGRAM; D. IF JOHN MULLINS IS IN FULL COMPLIANCE WITH PTI PROGRAM HE MAY MOVE FOR EARLY DISMISSAL FROM PROGRAM AFTER SIX MONTHS.

FINRA

NASD RULES 2110, 2330(A), 2370 AND 3110: JOHN EDWARD MULLINS MADE IMPROPER USE OF CUSTOMER FUNDS, OR IN THE ALTERNATIVE, CONVERTED CUSTOMER FUNDS; ATTEMPTED TO CONVERT FUNDS FROM HIS MEMBER FIRM; AND BREACHED FIDUCIARY RESPONSIBILITIES HE OWED TO A CUSTOMER. MULLINS ALSO FAILED TO DISCLOSE, AND MISSTATED MATERIAL INFORMATION, ON ANNUAL COMPLIANCE QUESTIONNAIRES, THEREBY CAUSING HIS MEMBER FIRM TO MAINTAIN INACCURATE BOOKS AND RECORDS. IN ADDITION, MULLINS BORROWED $100,000 FROM A CUSTOMER WITHOUT OBTAINING HIS MEMBER FIRM'S APPROVAL.

Decision

Bar (Permanent)

All Capacities

Indefinite

2/24/2011

Monetary Penalty other than Fines

$16,003.00

$1,562.00

HEARING PANEL DECISION RENDERED AUGUST 25, 2009 WHEREIN MULLINS IS BARRED FROM ASSOCIATION WITH ANY FINRA MEMBER IN ANY CAPACITY FOR MISUSING CUSTOMER FUNDS, IN VIOLATION OF NASD RULES 2110 AND 2330(A), CONVERTING CUSTOMER PROPERTY AND VIOLATING HIS FIDUCIARY OBLIGATIONS, IN VIOLATION OF NASD RULE 2110. MULLINS IS NOT LIABLE FOR ATTEMPTING TO CONVERT FUNDS FROM HIS MEMBER FIRM, IN VIOLATION OF NASD RULE 2110. IN LIGHT OF THE BAR, NO ADDITIONAL SANCTIONS ARE IMPOSED FOR MATERIAL MISSTATEMENTS MADE BY MULLINS TO HIS FIRM ON ANNUAL COMPLIANCE QUESTIONNAIRES, IN VIOLATION OF NASD RULES 2110 AND 3110, OR FOR BORROWING FUNDS FROM A CUSTOMER WITHOUT THE APPROVAL OF HIS FIRM, IN VIOLATION OF NASD RULES 2110 AND 2370. IN ADDITION, MULLINS IS JOINTLY AND SEVERALLY LIABLE FOR HEARING COSTS OF $16,003. DECISION APPEALED TO THE NAC ON SEPTEMBER 18, 2009. NAC DECISION RENDERED FEBRUARY 24, 2011 WHEREIN THE FINDINGS AND SANCTIONS ARE AFFIRMED. THEREFORE, MULLINS IS BARRED FROM ASSOCIATION WITH ANY FINRA MEMBER IN ANY CAPACITY AND ORDERED TO PAY, JOINTLY AND SEVERALLY, HEARING COSTS OF $16,003, FOR CONVERTING AND MISUSING CUSTOMER FUNDS, IN VIOLATION OF NASD RULE 2110 AND 2330, BREACHING FIDUCIARY OBLIGATIONS HE OWED AS AN OFFICER TO A CORPORATE CUSTOMER, IN VIOLATION OF NASD RULE 2110, MAKING MATERIAL MISSTATEMENTS TO HIS MEMBER FIRM ON ANNUAL COMPLIANCE QUESTIONNAIRES (WHICH CAUSED THE FIRM TO MAINTAIN INACCURATE BOOKS AND RECORDS) IN VIOLATION OF NASD RULES 2110 AND 3110, AND FOR BORROWING FUNDS FROM A CUSTOMER WITHOUT APPROVAL OF THEIR MEMBER FIRM, IN VIOLATION OF NASD RULES 2110 AND 2370. IN ADDITION, MULLINS IS ASSESSED, JOINTLY AND SEVERALLY, APPEAL COSTS OF $1,562. THE BAR IS EFFECTIVE THE DATE THE NAC DECISION WAS RENDERED. ON MARCH 25, 2011, MULLINS APPEALED THE DECISION TO THE SECURITIES AND EXCHANGE COMMISSION (SEC). MULLINS' BAR REMAINS IN EFFECT PENDING CONSIDERATION OF THE APPEAL. SEC DECISION RENDERED FEBRUARY 10, 2012 SUSTAINING IN PART FINRA'S DISCIPLINARY ACTION. THE FINDINGS THAT MULLINS VIOLATED NASD RULE 2330 BY MAKING IMPROPER USE OF CUSTOMER FUNDS, VIOLATED NASD RULE 3110 BY FAILING TO DISCLOSE INFORMATION TO HIS FIRM AND VIOLATED NASD RULES 2110 AND 3110 THAT HE FAILED TO DISCLOSE HIS STATUS AS TRUSTEE OF A FOUNDATION OR ITS ACCOUNT WERE VACATED. IT IS ORDERED THAT THE BAR IMPOSED BY FINRA IS SUSTAINED FOR CONVERTING CUSTOMER FUNDS AND BREACHING HIS FIDUCIARY DUTY TO A CUSTOMER IN VIOLATION OF NASD RULE 2110 AND IT IS FURTHER ORDERED THAT FINRA'S ORDER TO PAY FINES AND COSTS, IMPOSED JOINTLY AND SEVERALLY, IS SUSTAINED. DECISION IS FINAL APRIL 10, 2012.

NEW JERSEY BUREAU OF SECURITIES

MULLINS ABUSED A PERSONAL RELATIONSHIP WITH A CLIENT TO OBTAIN HER TRUST WHICH LED TO THE CONVERSION OF OVER $400,000 OF THE CLIENT'S ASSETS FOR THEIR PERSONAL USE. MULLINS ABUSED THE FIDUCIARY DUTY TO THE CLIENT AND VIOLATED COMPLIANCE POLICIES AND PROCEDURES OF MORGAN STANLEY DW.

Consent

Bar (Permanent)

ALL CAPACITIES

5/25/2011

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

$40,000.00

JOHN MULLINS IS DENIED ALL EXEMPTIONS CONTAINED IN N.J.S.A. 49:3-50 SUBSECTION (A) PARAGRAPHS 9, 10, AND 11 AND SUBSECTION(B). JOHN MULLINS IS DENIED ALL EXEMPTIONS TO THE REGISTRATION REQUIREMENTS PROVIDED BY N.J.S.A. 49:3-56(B), N.J.S.A. 49:3-56(C) AND N.J.S.A. 49:3-56(G).