IT IS CLAIMED THAT FINANCIAL ADVISOR ALLEGEDLY FAILED TO FOLLOW CUSTOMER'S INSTRUCTIONS TO LIQUIDATE SECURITIES ON AUGUST 13, 2008.

$9,500.00

THIS COMPLAINT AROSE OUT OF THE SALE OF AN AUCTION RATE SECURITY (ARS) THAT WAS MADE PRIOR TO THE WIDESPREAD ILLIQUIDITY IN THE ARS MARKET THAT OCCURRED IN FEBRUARY 2008.

$175,000.00

THIS MATTER INVOLVES THE SALE OF AUCTION RATE SECURITIES (ARS). THE TRANSACTION(S) AT ISSUE TOOK PLACE BEFORE MID-FEBRUARY 2008, WHEN THE ARS MARKET SUFFERED WIDESPREAD AUCTION FAILURES AND ILLIQUIDITY. THE FINANCIAL ADVISOR DID NOT CAUSE, CONTRIBUTE OR HAVE ANY CONTROL WHATSOEVER OVER THESE MARKET EVENTS. THE FIRM REACHED AGREEMENT WITH CERTAIN OF ITS REGULATORS, PURSUANT TO WHICH IT REPURCHASED ARS FOR THEIR FULL PAR VALUE FROM CERTAIN CLIENTS, INCLUDING THE INSTANT CLIENT, WHETHER THEY COMPLAINED OR NOT. THE FINANCIAL ADVISOR WAS NOT A PARTY TO THAT AGREEMENT, DID NOT MAKE ANY PAYMENTS TO THE CLIENT, AND WAS NOT ASKED TO AND DID NOT CONTRIBUTE TO THE REPURCHASE AMOUNT. THE SETTLEMENT AMOUNT IN ITEM 11 ABOVE REFLECTS THE PAR VALUE OF THE REPURCHASED ARS, AS REQUIRED BY FINRA REGULATORY NOTICE 09-12.

THE CUSTOMER ALLEGES THE FA MADE AN UNSUITABLE ACCOUNT RECOMMENDATION

$7,577.00

$3,000.00

FLORIDA DIVISION OF SECURITIES AND INVESTOR PROTECTION

ON FEBRUARY 23, 1996, THE FLORIDA DEPARTMENT OF BANKING AND FINANCE ISSUED AN ADMINISTRATIVE COMPLAINT FOR THE ENTRY OF AN ORDER TO CEASE AND DESIST AND IMPOSITION OF PENALTIES WITH NOTICES OF RIGHTS AGAINST RESPONDENT WILLIAM FRED CORNETT, JR. THE ADMINISTRATIVE COMPLAINT ALLEGES VIOLATIONS OF CHAPTER 517, F.S., THE ADMINISTRATIVE RULES PROMULGATED THEREUNDER, AND THE NASD RULES OF FAIR PRACTICE: IN THAT RESPONDENT CORNETT RECOMMENDED UNSUITABLE TRANSACTIONS AND TRADED EXCESSIVELY IN REGARDS TO THE COMPLAINANT ACCOUNT.

Stipulation and Consent

Disgorgement/Restitution

ON AUGUST 9, 1996, THE FLORIDA DEPARTMENT OF BANKING AND FINANCE ISSUED A FINAL ORDER ENTERING INTO A STIPULATION AND CONSENT AGREEMENT REGARDING RESPONDENT WILLIAM FRED CORNETT. THE FINAL ORDER INCORPORATED THE STIPULATIONS AND CONSENT AGREEMENT DATED JULY 23, 1996. PURSUANT TO THE STIPULATION AGREEMENT RESPONDENT CORNETT NEITHER ADMITS NOR DENIES THE VIOLATIONS IN THE ADMINISTRATIVE COMPLAINT, DATED 8/23/96, OR THAT ANY GROUNDS EXIST FOR AN ADMINISTRATIVE PROCEEDING. IN ACCORDANCE WITH THE STIPULATION AGREEMENT THE RESPONDENT CORNETT AGREES: TO ATTEND THE REGULATORY ELEMENT OF THE NASD'S CONTINUING EDUCATION COURSE WITH SIX MONTHS; TO PROVIDE RESTITUTION TO THE COMPLAINANT IN THE AMOUNT OF $9,500; AND TO ENTER A REGISTRATION AGREEMENT WITH DEPARTMENT FOR A PERIOD OF TWO YEARS, EFFECTIVE 8/9/96. THE TERMS OF THE REGISTRATION AGREEMENT PROVIDE, BUT ARE NOT LIMITED TO THE FOLLOWING: CORNETT AGREES NOT TO EXERCISE DISCRETIONARY AUTHORITY IN ANY ACCOUNT OF ANY PERSON DOMICILED IN THE STATE OF FLORIDA; AGREES NOT TO ACT IN ANY PRINCIPAL, SUPERVISORY, OR MANAGERIAL CAPACITY IN CONNECTION WITH HIS EMPLOYMENT IN THE SECURITIES INDUSTRY, WITH RESPECT TO THE ACCOUNTS OF ANY PERSONS DOMICILED IN THE STATE OF FLORIDA; AND AGREES NOT TO ENGAGE IN ANY PROHIBITED BUSINESS PRACTICES, AS DEFINED BY THE FLORIDA ADMINISTRATIVE CODE. SUCH CONDITION WILL REMAIN IN EFFECT FOR TWO YEARS FROM THE DATE OF THE FINAL ORDER, ISSUED 8/9/96.

NOT PROVIDED