FINRA

WITHOUT ADMITTING OR DENYING THE FINDINGS, GABAI CONSENTED TO THE SANCTION AND TO THE ENTRY OF FINDINGS THAT HE HELD SIGNIFICANT QUANTITIES OF SHARES OF A SECURITY IN HIS PERSONAL BROKERAGE ACCOUNTS AND USED AND EMPLOYED DECEPTIVE, FRAUDULENT, AND MANIPULATIVE DEVICES AND SCHEMES INVOLVING THE PURCHASE AND SALE OF THE SECURITY. THE FINDINGS STATED THAT THROUGH THE USE OF HIS PERSONAL AND OTHER BROKERAGE ACCOUNTS, GABAI MARKED THE OPEN AND CLOSING PRICES OF THE SECURITY, AND ENGAGED IN PRE-ARRANGED TRADING AND WASH SALES, IN AN ATTEMPT TO CREATE A FALSE OR MISLEADING APPEARANCE OF ACTIVE TRADING RELATING TO THE MARKET FOR THE SECURITY AND MANIPULATE THE PRICE OF THE SECURITY. AMONG OTHER THINGS, GABAI'S MISCONDUCT ENABLED HIM TO AVOID MARGIN CALLS CONCERNING THE SHARES HE HELD IN HIS PERSONAL BROKERAGE ACCOUNTS. GABAI EFFECTED 25 TRADES THAT SET THE CLOSING PRICE OF THE SECURITY AND EFFECTED A TOTAL OF SEVEN TRADES THAT SET THE OPENING PRICE IN THE SECURITY. THE FINDINGS ALSO STATED THAT GABAI EFFECTED 25 PAIRS OF MATCHED ORDERS OR PRE-ARRANGED TRADES IN THE SECURITY. IN 16 OF THE 25 INSTANCES, GABAI AND ANOTHER REGISTERED REPRESENTATIVE EFFECTED MATCHED TRADES BETWEEN THE BROKERAGE ACCOUNTS OF GABAI'S CUSTOMERS AND THE BROKERAGE ACCOUNTS OF THE OTHER REGISTERED REPRESENTATIVE'S CUSTOMERS. THE MATCHED ORDERS WERE TYPICALLY EFFECTED AT PRICES THAT WERE EQUAL TO OR HIGHER THAN THE PRIOR TRADE PRICE FOR THE SHARES. THE FINDINGS ALSO INCLUDED THAT GABAI EFFECTED FIVE PAIRS OF WASH TRADES IN THE SECURITY THAT TOOK PLACE WITHIN HIS PERSONAL BROKERAGE ACCOUNTS OR BETWEEN HIS PERSONAL BROKERAGE ACCOUNTS. THE WASH TRADES INVOLVED NO CHANGE IN BENEFICIAL OWNERSHIP AND WERE EFFECTED BY GABAI TO CREATE A FALSE OR MISLEADING APPEARANCE OF ACTIVE TRADING RELATING TO THE MARKET FOR THE SECURITY AND MANIPULATE THE PRICE OF THE SECURITY. AS A RESULT OF HIS CONDUCT, GABAI WILLFULLY VIOLATED SECTION 10(B) OF THE SECURITY EXCHANGE ACT OF 1934 AND RULE 10B-5 THEREUNDER. GABAI ALSO CAUSED THE PUBLICATION OR CIRCULATION OF REPORTS OF NON BONA FIDE PURCHASES OR SALES OF THE SECURITY.

Acceptance, Waiver & Consent(AWC)

Bar (Permanent)

All Capacities

Indefinite

9/29/2014

THIS SETTLEMENT INCLUDES A FINDING THAT GABAI WILLFULLY VIOLATED SECTION 10(B) OF THE SECURITIES EXCHANGE ACT OF 1934 AND RULE 10B-5 THEREUNDER, AND THAT UNDER ARTICLE III, SECTION 4 OF FINRA'S BY-LAWS, THIS MAKES HIM SUBJECT TO A STATUTORY DISQUALIFICATION WITH RESPECT TO ASSOCIATION WITH A MEMBER.