PROBATION REVOCATION. WHILE SERVING 6 MONTH SENTENCE WITH ELECTRONINC MONITORING AND 10 YEARS PROBATION HAGER VIOLATED NORTH DAKOTA PERTAINING THE POSSESSION OF FIREARMS AND ACTING AS UNREGISTERED AGENT IN OFFERING AND SELLING SECURITIES. SECURITIES FRAUD WAS ALSO ALLEGED IN THE AMENDED PETITION. FRAUD CHARGE WAS LATER DROPPED.

Convicted

A EXTENSIVE FILING WAS MADE.

FELONY

Convicted

NASD

NASD RULES 2110, 3030, 8210 - RESPONDENT PARTICIPATED IN OUTSIDE BUSINESS ACTIVITIES FOR COMPENSATION AND DID NOT PROVIDE PROMPT WRITTEN NOTICE TO HIS MEMBER FIRM. THE FINDINGS STATED THAT HAGER PROVIDED MISLEADING INFORMATION TO NASD.

Acceptance, Waiver & Consent(AWC)

Bar

WITHOUT ADMITTING OR DENYING THE ALLEGATIONS, HAGER CONSENTED TO THE DESCRIBED SANCTION AND TO THE ENTRY OF FINDINGS, THEREFORE HE IS BARRED FROM ASSOCIATION WITH ANY NASD MEMBER IN ANY CAPACITY.

EIGHT COUNTS FELONY UNREGISTERED SECURITIES, ELEVEN COUNTS FELONY UNREGISTERED AGENT, AND SIX COUNTS FELONY SECURITIES FRAUD. ORIGINAL PLEA WAS NOT GUILTY. INVOLVED THE SALE OF PRIVATE PLACEMENTS.

FELONY

PLEAD TO 4 COUNTS FELONY UNREGISTERED SECURITIES AND 4 COUNTS FELONY UNREGISTERED AGENT. PLEA HEARING WAS CONDUCTED ON 9/28/07. THE REMAINING COUNTS WERE DISMISSED. SENTENCED TO 1 YEAR, SIX MONTHS ELECTRONIC HOME CONFINEMENT, SIX MONTHS SUSPENDED, TEN YEARS PROBATION. START DATE WAS 12/20/2007. RESTITUTION OF $97,500 ORDERED TO BE PAID BY 1/21/08. NO OTHER PENALTIES.

BRUCE HAGER DENIES ANY WRONGDOING. A MOTION TO DISMISS WILL BE FILED IN AUGUST 2005.

NATIONAL ASSOCIATION OF SECURITIES DEALERS, INC.

NASD RULES 2110,2710(B)(1), (4) (I) AND (II), (5) AND (6), 2720(A)(1), (C)(1)AND (3), (F), (G), (H) AND (N) - A MEMBER FIRM, ACTING THROUGH HAGER AND OTHERS, FAILED TO FILE OFFERING DOCUMENTS FOR INTRASTATE OFFERINGS WITH THE CORPORATE FINANCING DEPARTMENT OF NASD;FAILED TO SUBMIT TO THE NASD CORPORATE FINANCING DEPARTMENT AN ESTIMATE OF THE MAXIMUM UNDERWRITING DISCOUNT OR COMMISSION THAT THE FIRM ANTICIPATED RECEIVING AS A RESULT OF ITS PARTICIPATION IN THE OFFERINGS AND ANY DOCUMENTS AND INFORMATION PERTAINING TO THE TERMS, CONDITIONS AND ARRANGEMENTS RELATING TO THE UNDERWRITING OR DISTRIBUTION OF SUCH SHARES, AND PROCEEDED WITHOUT OBTAINING "NO OBJECTION" LETTER TO THE UNDERWRITING TERMS AND ARRANGEMENTS OF THE OFFERINGS; AND, PARTICIPATED IN THE UNDERWRITING AND/OR DISTRIBUTION OF STOCK WITHOUT RETAINING A QUALIFIED INDEPENDENT UNDERWRITER TO CONDUCT DUE DILIGENCE AND PROVIDE A PRICING OPINION, FAILED TO HAVE THE QUALIFIED INDEPENDENT UNDERWRITER ACT AS MANAGER OF THE OFFERINGS, WHICH WAS REQUIRED SINCE THE FIRM HAD NOT BEEN ENGAGED IN THE INVESTMENT BANKING OR SECURITIES BUSINESS FOR THE FIVE-YEAR PERIOD IMMEDIATELY PRECEDING THE OFFERING, DID NOT ESTABLISH AN AUDIT COMMITTEE FOR THE FIRM WITHIN 12 MONTHS AFTER ITS INITIAL OFFERING AND APPOINT TO ITS BOARD OF DIRECTORS AND THE AUDIT COMMITTEE A PUBLIC DIRECTOR TO SERVE AS A COMMITTEE MEMBER, TO PROTECT THE INTERESTS OF THE INVESTORS, AND FAILED TO PROVIDE ONGOING PERIODIC REPORTS TO THE FIRM'S SHAREHOLDERS WHICH WOULD INFORM THEM.

Acceptance, Waiver & Consent(AWC)

Monetary/Fine

$25,000.00

Censure

WITHOUT ADMITTING OR DENYING THE ALLEGATIONS, HAGER CONSENTED TO THE DESCRIBED SANCTIONS AND TO THE ENTRY OF FINDINGS, THEREFORE, HE IS CENSURED AND FINED $25,000, JOINTLY AND SEVERALLY.

NOT PROVIDED

NORTH DAKOTA SECURITIES COMMISSIONER

FINANCIAL ADVANTAGE BROKERAGE SERVICES, INC., BRADLEY WELLS, AND BRUCE HAGER MADE UNSUITABLE AND SPECULATIVE INVESTMENTS IN CUSTOMERS ACCOUNTS AND FAILED TO PROPERLY SUPERVISE THEIR SALESMEN. THEY FAILED TO MAINTAIN A COMPLAINT FILE OR TO PROPERLY MONITER THE NEW ACCOUNT FORMS AND TRADE CONFIRMATIONS. IN ADDITION, THEY FAILED TO PROVIDE INFORMATION PROPERLY REQUESTED BY THE OFFICE OF THE SECURITIES COMMISSIONER.

Consent

Monetary/Fine

$1,000.00

THE PARTIES ENTERED INTO A CONSENT ORDER WHEREBY BRUCE HAGER AND BRADLEY WELLS INDIVIDUALLY AGREED TO MAKE PAYMENT OF CIVIL PENALTY TO THIS OFFICE IN THE AMOUNT OF $1000. AND THAT THE PARTIES AGREE TO COMPLY WITH ALL APPROPRIATE RULES AND REGULATIONS RELATING TO THE INTERNAL PROCEEDURES OF SUPERVISION WHENEVER THEY ARE IN A SUPERVISORY POSITION.

I WAS NOT A DESIGNATED COMPLIANCE OFFICER FOR THE FIRM. THE HOME OFFICE PROVIDED ALL SUPERVISION AND OSJ FUNCTIONS, THE STATE FAILED TO CONSIDER THAT THE FARGO BRANCH WAS NOT AN OSJ OFFICE. ALL NEW ACCOUNTS AND TRADES WERE SUPERVISED THROUGH THE HOME OFFICE ON A DAILY BASIS. THE FIRM DID MAINTAIN A COMPLAINT FILE, THE FILE WAS EMPTY BECAUSE THE FIRM HAD RECEIVED NO COMPLAINTS AS DEFINED BY NASD REGULATIONS. ANY CLIENTS OF MINE WHO INVESTED IN THE MENTIONED SPECULATIVE SECURITY HAS PREVIOUSLY MARKED SPECULATIVE AS AN INVESTMENT OBJECTIVE AND WERE ADVISED AS TO THE NATURE OF THE INVESTMENT. A SUPPLEMENTARY LETTER WITH ADDITIONAL DETAIL AS PROVIDED HEREWITH.******QUESTION 14D2 WAS ANSWERED YES IN ERROR. REP IS NOT SUBJECT TO A FINAL ORDER.*********