The customer alleges that the Registered Representative recommended unsuitable, high-risk, illiquid investments and breached his fiduciary duty. No specific dates for the alleged activity were identified in the Statement of Claim.

$150,000.00

I vehemently deny any wrongdoing and assert that the allegations are completely without merit. The investments about which the customers complained were suitable and were recommended based on the customer's objectives, goals and financial circumstances and were offered only after their review of all material documentation related to the investment. The customers confirmed in writing that they not only received the requisite investment documentation/disclosures, but that they fully understood the characteristics and risks of the investments. At all times, I put the customer's interest first and I will vigorously defend this matter to the fullest extent of the law.

$40,030.00

Tax

INSTALLMENT PLAN

FINRA

FINRA BY-LAWS ARTICLE V, SECTION 2(C), NASD RULE 2110, INTERPRETATIVE MATERIAL-1000-1: KILPATRICK SIGNED HIS MEMBER FIRM CUSTOMERS' NAMES TO VARIOUS DOCUMENTS WHEN THE FIRM'S PROCEDURES PROHIBITED HIM FROM SIGNING CUSTOMERS' NAMES ON THE DOCUMENTS REGARDLESS OF WHETHER THE CUSTOMERS HAD AUTHORIZED KILPATRICK TO SIGN THEIR NAMES. KILPATRICK FAILED TO AMEND HIS FORM U4 TO DISCLOSE MATERIAL INFORMATION.

Acceptance, Waiver & Consent(AWC)

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

$7,500.00

Suspension

ALL CAPACITIES

SIX MONTHS

8/16/2010

2/15/2011

WITHOUT ADMITTING OR DENYING THE FINDINGS, KILPATRICK CONSENTED TO THE DESCRIBED SANCTIONS AND TO THE ENTRY OF FINDINGS; THEREFORE, HE IS FINED $7,500 AND SUSPENDED FROM ASSOCIATION WITH ANY FINRA MEMBER IN ANY CAPACITY FOR SIX MONTHS. THE SUSPENSION IS IN EFFECT FROM AUGUST 16, 2010, THROUGH FEBRUARY 15, 2011.

WITHOUT ADMITTING OR DENYING THE FINDINGS, KILPATRICK CONSENTED TO THE DESCRIBED SANCTIONS AND TO THE ENTRY OF FINDINGS; HE IS FINED $7,500 AND SUSPENDED FROM ASSOCIATION WITH ANY FIRNA MEMBER IN ANY CAPACITY FOR SIX MONTHS. THE SUSPENSION IS IN EFFECT FROM AUGUST 16, 2010, THROUGH FEBRUARY 15, 2011.

$32,177.00

Tax

INSTALLMENT PLAN

$45,154.00

Tax

INSTALLMENT PLAN

CUSTOMERS CLAMINED THAT MR. KILPATRICK PLACED THEIR FUNDS INTO UNSUITABLE ANNUITIES AND SIGNED THEIR NAME ON AN LPL AUTHORIZATION FORM.

$38,000.00

$40,000.00

LINSCO PRIVATE LEDGER

Discharged

MICHAEL KILPATRICK ADMITTED TO PLACING CUSTOMER SIGNATURES ON FORMS. MR. KILPATRICK FAILED INITIALLY TO COOPERATE FULLY WITH COMPLIANCE STAFF AND AUDITOR. MR. KILPATRICK FAILED TO INFORM LPL OF A TAX LIEN.

$103,912.00

Tax

IRS APPROVED INSTALLMENT AGREEMENT FOR MONTHLY PAYMENTS OF $2,000.00 PER MONTH. START DATE 12/2005 AND WILL BE PAID OFF APPROX. IN 11/2011.

CLAIMANT ALLGES THAT AEFA AND I MADE UNSUITABLE INVESTMENT RECOMMENDATIONS FOR THEIR RETIREMENT FUNDS GIVEN THAT THEIR INVESTMENT OBJECTIVES WERE SAFETY AND INCOME. THEY ALSO ALLEGE UNAUTHORIZED TRADING, BREACH OF FIDUCIARY DUTY, FAILURE TO SUPERVISE AND ELDER ABUSE. THEY CLAIM THEY INVESTED ABOUT $2.7 MILLION WITH AEFA AND THAT THEY INCURRED LOSSES IN EXCESS OF $1 MILLION. THEY ALSO REQUEST AN UNSPECIFIED AMOUNT IN PUNITIVE DAMAGES.

$1,000,000.00

$73,807.00

AEFA SETTLE THIS MATTER FOR $73,807.00 IN ORDER TO AVOID THE COSTS ASSOCIATED WITH ARBITRATION. I WAS DISMISSED FROM THE CASE AS PART OF THE SETTLEMENT AND I CONTRIBUTED NOTHING TO THE SETTLEMENT AMOUNT.