FINRA

FINRA RULE 2010 AND 3240 AND NASD RULE 2370: RUMMELLS CAUSED HIS AUNT, A CUSTOMER OF HIS MEMBER FIRM, TO LOAN A TOTAL OF $625,234 ON SIX SEPARATE OCCASIONS TO A HOLDING COMPANY, WHICH HAD FINANCIAL DIFFICULTIES AND IN WHICH RUMMELLS WAS A ONE-THIRD OWNER. THE FIRM DID NOT PERMIT BORROWING FROM CUSTOMERS, EXCEPT UNDER LIMITED CIRCUMSTANCES, AND ONLY WITH PRIOR FIRM APPROVAL. RUMMELLS DID NOT REQUEST APPROVAL FORM HIS FIRM TO BORROW MONEY FROM HIS AUNT IN THE MANNER REQUIRED UNDER THE FIRM'S PROCEDURES. RUMMELLS HAS FULLY REPAID THE LOAN TO THE CUSTOMER.

Acceptance, Waiver & Consent(AWC)

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

$15,000.00

Suspension

ANY CAPACITY

14 MONTHS

11/5/2012

1/4/2014

WITHOUT ADMITTING OR DENYING THE FINDINGS, RUMMELLS CONSENTED TO THE DESCRIBED SANCTIONS AND TO THE ENTRY OF FINDINGS, THEREFORE HE IS FINED $15,000 AND SUSPENDED FROM ASSOCIATION WITH ANY FINRA MEMBER IN ANY CAPACITY FOR 14 MONTHS. THE FINE SHALL BE DUE AND PAYABLE EITHER IMMEDIATELY UPON REASSOCIATION WITH A MEMBER FIRM FOLLOWING THE SUSPENSION, OR PRIOR TO ANY APPLICATION OR REQUEST FOR RELIEF FROM ANY STATUTORY DISQUALIFICATION RESULTING FROM THIS OR ANY OTHER EVENT OR PROCEEDINGS, WHICHEVER IS EARLIER. THE SUSPENSION IS IN EFFECT FROM NOVEMBER 5, 2012, THROUGH JANUARY 4, 2014.

CLIENT CLAIMS MARKET LOSS OF $16,000 FROM UNAUTHORIZED TRADING. JULY 22, 2011

$16,000.00

[CUSTOMER'S] ACCOUNT WAS MANAGED AND TRADED BY EDWARD JONES CO. SHE HAD A 3RD PARTY MANAGED ACCOUNT. IT WAS NOT TRADED BY JEFF RUMMELLS. THIS WAS CALLED AN ADVISORY ACCOUNT, [CUSTOMER] GAVE EDWARD JONES FULL AUTHORIZATION TO DO ALL TRADES. CLAIM WAS DENIED.

EDWARD JONES

Discharged

RUMMELLS' EMPLOYMENT WAS TERMINATED AFTER IT WAS DISCOVERED RUMMELLS HAD TRANSFERRED MORE THAN $600,000 OF A NINETY-ONE YEAR OLD CLIENT'S FUNDS INTO A BUSINESS VENTURE THAT WAS OWNED IN PART BY RUMMELLS WITHOUT DISCLOSING THE RISKS OF THE VENTURE TO THE CLIENT. RUMMELLS FAILED TO DISCLOSE THE VENTURE WAS LOSING SIGNIFICANT AMOUNTS OF MONEY AND FAILED TO PROVIDE THE CLIENT WITH EVIDENCE OF THE CLIENT'S INVESTMENT IN THE VENTURE.

MY AUNT LOANED MONEY TO MY OUTSIDE BUSINESS ACTIVITY. THE OUTSIDE BUSINESS ACTIVITY HAD BEEN DISCLOSED AND APPROVED BY EDWARD JONES. JONES APPROVED THE MOVING OF MONEY FROM MY AUNT SEPTEMBER 2009 AND JONES ALSO STATED I WOULD NOT NEED FURTHER APPROVAL FOR FURTHER MONIES MOVING FROM MY AUNT TO THE OUTSIDE BUSINESS ACTIVITY. OVER A YEAR LATER, EDWARD JONES SAID THEY SHOULD NOT HAVE APPROVED THIS ACTIVITY AND TERMINATED ME. LOANS HAVE BEEN REPAID WITH INTEREST FOR A TOTAL OF $664,000.00

THE CLIENT ALLEGED THAT THE SUB ACCOUNTS WITHIN HIS PUTNAM VARIABLE ANNUITIES WERE NOT PROPERLY DIVERSIFIED AND, AS A RESULT, CLIENT INCURRED LOSSES DURING THE PAST FOUR YEARS. WHEN THESE FUNDS WERE INVESTED IN THE PUTNAM CAPITAL MANAGER ANNUITY IN 2000, CLIENT ALLEGED THAT HE WANTED AN INVESTMENT THAT WAS NOT RISKY AND WAS GUARANTEED. THE FUNDS WITHIN THE TWO ANNUITIES WERE INVESTED 100% IN THE GROWTH SUB-ACCOUNT AND THE VALUE DECLINED BY APPROXIMATELY $26,000.

$26,000.00

A REVIEW OF CLIENT'S ACCOUNT INDICATED THAT IT WAS WELL DIVERSIFIED BETWEEN $130,000 OF FIXED-RATE BONDS/NOTES AND TWO VARIABLE ANNUITIES WHICH ARE UP IN VALUE. THE CLIENT HAD A PERSONAL ACCOUNT WITH HIS WIFE, WHERE CLIENT HAD TRADED GROWTH AND GROWTH/INCOME STOCKS OVER THE YEARS, AND ALSO HAD TWO PCM ANNUITIES LINKED TO THE ACCOUNT. THESE ANNUITIES WERE PURCHASED IN MAY 2000, AND WERE INVESTED IN THE GROWTH SUB-ACCOUNT. UNFORTUNATELY, THESE ANNUITIES DECLINED IN VALUE OVER THE PAST FOUR YEARS. THE CLIENT, HOWEVER, RECEIVED THE CONTRACTS ON THESE ANNUITIES, WHICH DISCLOSED THE RISKS ASSOCIATED WITH THE INVESTMENTS AND THE FACT THAT THE ACCOUNT WAS INVESTED FOR GROWTH. THE CLIENT ALSO RECEIVED STATEMENTS DURING THE PAST FOUR YEARS THAT DISCLOSED THE VALUES OF THESE ACCOUNTS. IF THE CLIENT DID NOT LIKE THE PERFORMANCE OF THE SUB-ACCOUNT, THE CLIENT CERTAINLY COULD HAVE EXCHANGED INTO DIFFERENT FUNDS. THE CLIENT'S INVESTMENTS WERE DIVERSIFIED AND APPEARED TO MEET THE CLIENT'S INVESTMENT OBJECTIVES OF GROWTH AND GROWTH/ INCOME. THE CLAIM WAS DENIED.

CLIENT STATES THEY INVESTED RETIREMENT MONEY AS WELL AS JOINT ACCOUNT MONEY IN PUTNAM HIGH YIELD TRUST. CLIENT INDICATES RUMMELLS ASSURED THEM THEY WOULD NOT LOSE THEIR PRINCIPAL. CLIENT FEELS THEY WERE MISLEAD AND HAVE LOST $14,959.00.

$14,959.00

ACCORDING TO MR. RUMMELLS, HE INITIALLY REVIEWED A NUMBER OF INVESTMENT IDEAS WITH THE CLIENT FOR HIS RETIREMENT MONEY AND HE INDICATED HE WAS LOOKING FOR A RATE TO PROVIDE THE MOST INCOME. MR. RUMMELLS STATED THE CLIENT BELIEVED THE CERTIFICATE OF DEPOSIT AND FIXED BOND RATES WERE TOO LOW AND THE PUTNAM FUND WAS OFFERED AS AN ALTERNATIVE INVESTMENT IDEA. MR. RUMMELLS INDICATED HE DISCUSSED THE RISK OF MARKET FLUCTUATION AND PROVIDED A PROSPECTUS FOR THE MUTUAL FUND. IN ADDITION, MR. RUMMELLS STATED HE DID NOT INFORM THE CLIENT THAT HE WOULD NOT LOSE PRINCIPAL AND HE INDICATED THE CLIENT DID NOT EXPRESS CONCERN ABOUT SAFETY OF PRINCIPAL UNTIL RECENT CONVERSATIONS. IT IS OUR OPINION MR. RUMMELLS PROVIDED AN INVESTMENT TO FIT THE CLIENT'S INCOME NEEDS AND HE WAS IN RECEIPT OF CUSTOMER ACCOUNT STATEMENTS WHICH REFLECT ACCOUNT ACTIVITY, VALUE OF THE INVESTMENT AND ASSET CATEGORY. THE REQUEST FOR REIMBURSEMENT OF LOSSES ASSOCIATED WITH THE DECLINE IN THE ACCOUNT VALUE IS RESPECTFULLY DENIED.