ALLEGED BREACH OF CONTRACT, MISREPRESENTATION, UNSUITABILITY, BREACH OF FIDUCIARY DUTY, ACTIVITIES DATE 6/14/2006-7/16/2007.

$500,000.00

$50,000.00

THE CLIENT'S INVESTABLE ASSETS EXCEEDED $4MM (2006) AND THE CLIENT WAS AN PROFESSIONAL FOOTBALL PLAYER WITH THE NFL. HIS PLAYER CONTRACT STILL HAD THREE YEARS AT $1.6M PER YEAR WITH INCENTIVES. THE PERCENTAGE OF INVESTABLE ASSETS INTO PRIVATE PLACEMENTS WERE LESS THAN 25% OF TOTAL INVESTABLE ASSETS AT TIME OF INVESTMENT, AND HIS TOTAL INVESTED WAS $500,000.

FINRA

NASD RULES 2110, 3040 - BOBBY GLENN JAMES PARTICIPATED IN PRIVATE SECURITIES TRANSACTIONS OUTSIDE THE COURSE AND SCOPE OF HIS EMPLOYMENT RELATIONSHIP WITH HIS MEMBER FIRMS AND DID NOT PROVIDE WRITTEN NOTICE TO, OR OBTAIN WRITTEN APPROVAL FROM, HIS MEMBER FIRMS PRIOR TO ENGAGING IN THE OFFER AND SALE OF LIMITED PARTNERSHIPS.

Acceptance, Waiver & Consent(AWC)

Monetary/Fine

$20,000.00

Suspension

WITHOUT ADMITTING OR DENYING THE FINDINGS, JAMES CONSENTED TO THE DESCRIBED SANCTIONS AND TO THE ENTRY OF FINDINGS; THEREFORE, HE IS FINED $20,000 AND SUSPENDED FROM ASSOCIATION WITH ANY FINRA MEMBER IN ANY CAPACITY FOR SIX MONTHS. THE FINE IS DUE AND PAYABLE IMMEDIATELY UPON REASSOCIATION WITH A MEMBER FRIM FOLLOWING THE SUSPENSION OR PRIOR TO ANY REQUEST FOR RELIEF FROM ANY STATUTORY DISQUALIFICATION RESULTING FROM THIS OR ANY OTHER EVENT OR PROCEEDING, WHICHEVER IS EARLIER. THE SUSPENSION IN ANY CAPACITY IS IN EFFECT FROM DECEMBER 1, 2008 THROUGH MAY 31, 2009.

EACH OF THE PARTNERSHIPS (3) WERE CREATED UNDER TFR ADVISORS, LLP, AS LIMITED PARTNERSHIPS, BUT BOBBY JAMES NOR DID TFR ADVISORS CUSTODY THE FUNDS RAISED. THE CAPITAL WAS FORWARDED TO THREE SEPARATE ENTITIES AS INVESTMENT CAPITAL. MR JAMES REPRESENTED THE INVESTORS' INTEREST IN EACH OF THE VENTURES. MR. JAMES PERSONALLY INVESTED IN EACH VENTURE, AND VOLUNTARILY BROUGHT THESE THREE PARTNERSHIPS TO THE ATTENTION OF HIS B/D VSR FINANCIAL SERVICES IN NOVEMBER 2006. IT WAS MR. JAMES BELIEF HE COULD OFFER THESE PARTNERSHIP UNDER HIS RIA, AND NOT BE IN CONFLICT OR VIOLATION. THE SCOPE OF THESE OFFERINGS BEGAN IN APRIL 2005 AND ENDED IN JULY 2007.

NASD

NASD RULES 2110, 2510(B) - BOBBY GLENN JAMES EFFECTED DISCRETIONARY TRANSACTIONS IN VARIABLE ANNUITY SUB-ACCOUNTS OWNED BY PUBLIC CUSTOMERS WITHOUT HAVING OBTAINED PRIOR WRITTEN AUTHORIZATION FROM THE CUSTOMERS AND PRIOR WRITTEN ACCEPTANCE OF THE ACCOUNTS AS DISCRETIONARY BY HIS MEMBER FIRM.

Acceptance, Waiver & Consent(AWC)

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

Suspension

WITHOUT ADMITTING OR DENYING THE FINDINGS, JAMES CONSENTED TO THE DESCRIBED SANCTIONS AND TO THE ENTRY OF FINDINGS; THEREFORE, HE IS FINED $10,000 AND SUSPENDED FROM ASSOCIATION WITH ANY NASD MEMBER IN ANY CAPACITY FOR 10 BUSINESS DAYS. THE SUSPENSION IN ANY CAPACITY IS IN EFFECT FROM MARCH 19, 2007 THROUGH MARCH 30, 2007. FINE PAID.

THIS WAS A REBALANCING OF VA'S AND VUL'S WITH PENN MUTUAL LIFE ONLY. REBALANCING TRANSACTION DID NOT CAUSE ANY COMMISSIONS FEES, OR TAXES TO THE CLIENT.

VSR FINANCIAL SERVICES INC (14503)

Discharged

VSR'S INTERNAL REVIEW INDICATED THAT MR. JAMES HAD RAISED MONEY FOR PARTNERSHIPS WITHOUT PROVIDING PRIOR WRITTEN NOTICE TO OR RECEIVING APPROVAL FROM THE FIRM.

NO CLIENT COMPLAINTS HAVE BEEN RECEIVED CONCERNING THESE TRANSACTIONS.

MISREPRESENTATION OF DEATH BENEFIT FOR PURCHASE OF A LIFE INSURANCE PRODUCT, AND DECLINE OF CASH VALUE OF POLICY.

$40,000.00

THIS WAS A SPLIT CUSTOMER CLIENT WITH A LOCAL LICENSED CPA. MR. JAMES WAS NOT AGENT OF RECORD ON THE POLICY AND WAS NOT RECEIVING CLIENT STATEMENTS. THE CUSTOMER PURSUED THE LACK OF PERFORMANCE WITHIN THE INVESTMENT ACCOUNTS WHICH FUNDED THE DEATH BENEFIT DURING A MARKET PERIOD OF TURBULENCE (2000-2005).

BREACH OF CONTRACT, NEGLIGENCE, FAILURE TO SUPERVISE, BREACH OF FIDUCIARY DUTY, UNAUTHORIZED TRADING, OMISSION OF FACTS, SUITABILITY. ALLEGED ALLEGATION DATE - MARCH 2000

$25,000.00

$11,000.00

THE CUSTOMER WAS INVESTED INTO LARGE GROWTH MUTUAL FUNDS AND FORTUNE 500 COMPANY INDIVIDUAL STOCKS. THE PERFORMANCE OF THE MARKET IN MARCH OF 2000-2002 WAS OUT OF THE REPRESENTATIVE'S CONTROL. THE CLIENT HAD MORE THAN 3X FIXED INCOME ASSETS THAN GROWTH ASSETS IN MARCH 2000 WHEN INVESTMENTS WERE MADE.