California Department of Insurance

On October 27, 2016, FINRA issued an AWC imposing a $10,000 fine and a two year suspension from association with any FINRA member firm in any capacity due to Mr. Gross' participation in a private securities transaction for compensation, submitting an annual certification containing false information and failing to disclose a tax lien on his Form U4.

Order of Summary Suspension

Suspension

Insurance license, prohibited from transacting insurance in the State of California during the three month suspension.

3 months

2/1/2018

4/30/2018

Florida Department of Financial Services, Bureau of Investigation

The Florida Department of Financial Services conducted an investigation as a result of allegations that on October 27, 2016, FINRA issued an AWC imposing a $10,000 fine and a two year suspension from association with any FINRA member firm in any capacity due to Mr. Gross' participation in a private securities transaction for compensation, submitting an annual certification containing false information and failing to disclose a tax lien on his Form U4.

Stipulation and Consent

Suspension

Insurance licenses and eligibility for lincensure and appointments

3 months

7/24/2017

10/24/2017

FINRA

Without admitting or denying the findings, Gross consented to the sanctions and to the entry of findings that he participated in a private securities transaction for compensation by selling approximately $6.2 million in limited partnership interests in a hedge fund that traded options, to investors, all of whom were his member firm's customers, without providing the required notice to or obtaining permission from the firm. The findings stated that the hedge fund collapsed, and investors lost approximately 95 percent of their investments. Also, the firm's policies and procedures prohibited registered representatives from participating in private securities transactions without the firm's prior written approval. Further, the firm required that registered representatives disclose all private securities transactions on their annual compliance certifications. The findings also stated that Gross submitted an annual compliance certification to the firm containing false information. Specifically, in listing Gross' private securities transactions, Gross failed to disclose his participation in the hedge fund offering, which was ongoing at the time. The findings also included that Gross willfully failed to timely disclose on his Form U4 a federal tax lien of $438,991 that was filed against him.

Acceptance, Waiver & Consent(AWC)

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

$10,000.00

Suspension

Any capacity

two years

11/21/2016

11/20/2018

Respondent understands that this settlement includes a finding that he willfully omitted to state a material fact on a Form U4, and that under Section 3(a)(39)(F) of the Securities Exchange Act of 1934 and Article III, Section 4 of FINRA's By-Laws, this omission makes Respondent subject to a statutory disqualification with respect to association with a member.

Summit Equities, Inc.

Permitted to Resign

Mr. Gross was permitted to resign in in connection with a FINRA Letter of Acceptance, Waiver and Consent (AWC) for various rule violations.

EIGHT LIMITED PARTNERS IN ILLUME FUND, LP ("ILLUME") FILED TWO SEPARATE ARBITRATIONS (13-03396 AND 13-03722) AGAINST SUMMIT, WHICH WERE COMBINED PRIOR TO SETTLEMENT. THE STATEMENTS OF CLAIM ALLEGED MISCONDUCT BY MR. GROSS IN 2011 IN CONNECTION WITH THE SALE OF THE ILLUME LIMITED PARTNERSHIP INTERESTS. MR. GROSS SOLD THOSE LIMITED PARTNERSHIP INTERESTS THROUGH GEH, HIS OWN BROKER-DEALER WHICH WAS NOT AFFILIATED WITH SUMMIT. THE CLIENTS, WHO WERE ALL SOPHISTICATED AND EXPERIENCED, ALL ACKNOWLEDGED IN WRITING AT THE TIME OF THE INVESTMENTS THAT SUMMIT HAD NOTHING TO DO WITH THE INVESTMENTS. HOWEVER, CLAIMANTS ALLEGED THAT MR. GROSS MISREPRESENTED ILLUME AND THAT SUMMIT HAD A DUTY TO SUPERVISE MR. GROSS IN CONNECTION WITH THE SALES OF THE ILLUME INVESTMENTS THROUGH GEH. GEH AND GROSS WERE INITIALLY NAMED AS RESPONDENTS IN 13-03396 BUT WERE DISMISSED FROM THAT CASE AFTER GROSS AND GEH FILED BANKRUPTCY PETITIONS FOR REASONS UNRELATED TO ILLUME AND PRIOR TO SETTLEMENT. GEH AND GROSS WERE NEVER NAMED AS RESPONDENTS IN 13-3722. SUMMIT SETTLED WITH CLAIMANTS WHO, AMONG OTHER THINGS, ASSIGNED ALL OF THEIR CLAIMS AGAINST ILLUME AND ITS MANAGER TO SUMMIT.

$4,514,299.00

$2,000,000.00

THE ILLUME INVESTMENTS WERE SUITABLE FOR CLAIMANTS AND NO MISREPRESENTATIONS WERE MADE CONCERNING ILLUME. LOSSES SUFFERED BY THE LIMITED PARTNERS, INCLUDING ME, WERE CAUSED BY THE GENERAL PARTNER AND INVESTMENT MANAGER FOR ILLUME IN AUGUST 2011. I WAS NOT REPRESENTED IN THE MEDIATION THAT LED TO THE SETTLEMENT BY SUMMIT.