ILLINOIS

ON 10/21/2011 FINRA ENTERED ORDER ACCEPTING OFFER OF SETTLEMENT("ORDER") SUBMITTED BY RESPONDENT REGARDING DISCIPLINARY PROCEEDING NO. 2007008935009.RESPONDENT'S REGISTRATION AS A SALESPERSON AND INVESTMENT ADVISER REPRESENTATIVE IN THE STATE OF ILLINOIS IS SUBJECT TO REVOCATION PURSUANT TO SECTION 8.E (1)(J) OF THE ACT.

Order

Revocation

THE REGISTRATION OF RESPONDENT RAYMOND T. BLUNK AS A SALESPERSON/INVESTMENT ADVISER REPRESENTATIVE IN THE STATE OF ILLINOIS IS REVOKED

MR. BLUNK REQUESTED THAT HIS REGISTRATIONS WITH THE STATE OF ILLINOIS BE TERMINATED ON JANUARY 31, 2012. HE WAS NOTIFIED OF THE HEARING ON FEBRUARY 17, 2012.

THE CLIENT ALLEGES THAT THE VARIABLE ANNUITY SHE PURHASED IN OCTOBER, 2010 WAS NOT THE BEST OPTION AND DID NOT SUIT HER NEEDS.

$44,757.30

FINRA

NASD RULES 2110, 2310 - RAYMOND BLUNK RECOMMENDED THAT CUSTOMERS PARTICIPATE IN A "STOCK TO CASH" PROGRAM UNDER WHICH CUSTOMERS PLEDGED STOCK TO OBTAIN LOANS TO PURCHASE OTHER PRODUCTS; BLUNK'S CUSTOMERS OBTAINED LOANS TOTALING APPROXIMATELY $1.7 MILLION. THE PLEDGED STOCK WOULD BE TRANSFERRED TO THE LOANING ENTITY'S SECURITIES ACCOUNT MAINTAINED AT A CLEARING FIRM. THE LOANS WERE TYPICALLY FOR THREE YEARS UP TO 90% OF THE VALUE OF THE STOCK WITH NO PAYMENTS REQUIRED DURING THE TERM OF THE LOAN BUT CUSTOMERS WERE REQUIRED TO PAY THE FULL PRINCIPAL AND INTEREST DUE AT THE END OF THE LOAN TERM. DOCUMENTATION USED BY THE LOANING ENTITY MADE IT APPEAR IT WAS RETAINING THE SECURITIES PLEDGED AND MIGHT USE THEM TO ENTER INTO HEDGING TRANSACTIONS BUT IN REALITY THE CUSTOMERS CONVEYED FULL OWNERSHIP TO THE ENTITY WHICH ROUTINELY SOLD THE SECURITIES UPON RECEIPT AND MOVED THE MONEY INTO ITS OWN BANK ACCOUNT. THE ENTITY BECAME UNABLE TO MAKE COMPLETE PAYMENTS TO CUSTOMERS WITH PROFITABLE PORTFOLIOS AND USED THE PROCEEDS FROM THE SALE OF SECURITIES PLEDGED BY NEW CUSTOMERS TO PAY OFF ITS OBLIGATIONS TO EXISTING CUSTOMERS AND MONEY WAS ALSO DIVERTED TO PAY FOR EXPENSES NOT RELATED TO ITS OPERATION. BLUNK FAILED TO FIND OUT WHAT HAPPENED TO STOCK CONVEYED TO THE LENDER AND ASSUMED THE LENDER WAS A BROKER DEALER HOLDING THE STOCK FOR HIS CUSTOMERS IN CUSTODIAL ACCOUNTS. WHEN BLUNK TRIED TO FIND OUT MORE INFORMATION, INTERMEDIARIES REFUSED TO PROVIDE MORE INFORMATION BUT BLUNK STILL ENTRUSTED HIS CLIENTS' SECURITIES TO THE LENDER. BLUNK FAILED TO CONDUCT DUE DILIGENCE AND VIOLATED THE REQUIREMENT OF HAVING A REASONABLE BASIS FOR RECOMMENDING THE STOCK TO CASH PROGRAM TO CUSTOMERS AND POTENTIAL CUSTOMERS.

Decision & Order of Offer of Settlement

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

$15,000.00

Suspension

ANY

25 DAYS

11/21/2011

12/15/2011

WITHOUT ADMITTING OR DENYING THE ALLEGATIONS, BLUNK CONSENTED TO THE DESCRIBED SANCTIONS AND ENTRY OF FINDINGS THE HE FAILED TO CONDUCT ADEQUATE DUE DILIGENCE OR RESEARCH REGARDING THE LENDER BEFORE RECOMMENDING THE STOCK TO CASH PROGRAM FOR NINE LOANS TOTALING APPROXIMATELY $1.8 MILLION, THEREFORE HE IS FINED $15,000 AND SUSPENDED FROM ASSOCIATION WITH ANY FINRA MEMBER IN ANY CAPACITY FOR 25 DAYS. THE SUSPENSION IS IN EFFECT NOVEMBER 21, 2011, THROUGH DECEMBER 15, 2011. FINE PAID IN FULL ON 10/07/13.

WITHOUT ADMITTING OR DENYING THE ALLEGATIONS, BLUNK CONSENTED TO THE DESCRIBED SANCTIONS AND ENTRY OF FINDINGS THAT HE FAILED TO CONDUCT ADEQUATE DUE DILIGENCE OR RESEARCH REGARDING THE LENDER BEFORE RECOMMENDING THE STOCK TO CASH PROGRAM FOR NINE LOANS TOTALLING APPROXIMATELY $1.8 MILLION; THEREFORE, HE IS FINED $15,000 AND SUSPENDED FROM ASSOCIATION WITH ANY FINRA MEMBER IN ANY CAPACITY FOR 25 DAYS. THE SUSPENSION IS IN EFFECT NOVEMBER 21, 2011 THROUGH DECEMBER 15, 2011.

CLIENTS ALLEGE REP CHURNED THEIR ACCOUNTS. COMPENSATORY DAMAGES WERE NOT INITIALLY SPECIFIED.

$1,700,000.00

$138,250.00

NASD ARBITRATION SETTLED.

AL

ORDER OF DENIAL - PURSUANT TO THE PROVISIONS OF SECTION 8-6-3(j)(1) AND 8-6-3(j)(2)

Decision

Revocation/Expulsion/Denial

SAME AS ALLEGATIONS

THE STATE OF ALABAMA NEVER NOTIFIED ME OR CHUBB SECURITIES ABOUT ANY CONFLICT UNTIL THE ORDER WAS ISSUED. THE MATTER OF CONCERN WAS FULLY DISCLOSED ON MY PREVIOUS U-4 THIS MATTER ALSO WAS IN 1979 SOME 15 YEARS AGO. YES IT WAS A MATTER OF POOR JUDGEMENT ON MY PART, HOWEVER MY RECORDS HAS BEEN SPOTLESS SINCE.'

CHARGE 1-RECEIVING STOLEN PROPERTY OVER $100, CLASS D FELONY, NO PLEA, THE CASE WAS THROWN OUT

FELONY

DISMISSED, 03/20/1980,NO SENTENCE

I WAS WITH A FRIEND THAT WAS GETTING MARRIED AND WE WERE IN A RESTAURANT/BAR. AFTER SEVERAL DRINKS AND A MEAL WE WERE LEAVING, I WAS DRIVING. I WENT TO GET THE CAR AND HE CAME OUT WITH A FLOWER PLANTER. THE SECURITY POLICE HELD BOTH UNTIL THE POLICE CAME. THEY ARRESTED BOTH US AND CHARGED US WITH RECEIVING PROPERTY OVER $100.00. MY CHARGE WAS DISMISSED IMMEDIATELY. ATTACHED IS A LETTER DATED 3/2/90, FROM THE OFFICE OF FORD, KLAPHEKE & MEYER, ATTORNEYS AT LAW, WHICH DISCLOSES THE FOLLOWING DETAILS: PLEASE BE ADVISED THAT RECENTLY I HAD SOMEONE FROM MY OFFICE GO OVER TO THE JEFFERSON COUNTY COURT AND REVIEW A CHARGE PREVIOUSLY RECORDED AGAINST RAYMOND T. BLUNK. THE CHARGE WAS DATED 3/20/80, LISTED AS AGENCY CASE #229981JT, AND REFLECTED A CHARGE OF RECEIVING STOLEN PROPERTY OVER $100.00. IN AN ATTEMPT TO OBTAIN A COPY OF THE DETAILS OF THIS MATTER , WE WERE INFORMED THAT THEY WERE NOT AVAILABLE AND THAT THE CASE HAD BEEN DISMISSED AND THE ONLY REFERENCE GIVEN WAS A FRANKFORT CASE, DM80F001782D (LETTER SIGNED BY DONALD E. MEYER).

EMBEZZLEMENT BY BANK OFFICER,10 COUNTS, FELONY, PLEADED NOLO CONTENDERE,

FELONY

CONVICTED IN 10 COUNTS, 4/27/1979, SENTENCE 3YEARS, 90 DAY CONFINEMENT, AND REMAINDER 33 MOS. SUSPENDED. SENTENCED ON COUNT #1 ALL OTHER COUNTS SUSPENDED.

I PLEADED NOLO CONTENDERE RE: 09/29/78 CHARGE. THIS MATTER INVOLVED A DISPUTE AND PERSONALITY CONFLICT BETWEEN MYSELF AND THE BANK PRESIDENT IN 1977. THE BANK APPROACHED ME ABOUT MERGING MY INSURANCE AGENCY INTO THEIRS AND APPOINTED ME AS V.P. OF AGENCY. THE FINANCIAL RECORDS THEY SHOWED ME REGARDING PREVIOUS INSURANCE INCOME AND PROFITS WERE PROVEN BOGUS. HOWEVER, MY CONTRACT INDICATED I WOULD RECEIVE 50% OF THE PROFITS OF THE AGENCY. THE FIRST YEAR OF MY EMPLOYMENT I DISCOVERED SEVERAL ABSOLUTE FRAUDULENT ACTIVITIES BEING CARRIED ON BY THE BANK PRESIDENT AND THE BOARD. HOWEVER, IN FEBRUARY OF 1979, UPON RECEIPT OF PROFIT-SHARING CHECKS RECEIVED BY THE AGENCY (WHICH HAPPENED TO BE THE FIRST EVER THAT THEY RECEIVED) I DID SIGNED AND DEPOSITED IN AN ACCOUNT IN THE BANK MENTIONED TO BE HELD IN ESCROW. I THEN, AT THE NEXT BOARD MEETING NOTIFIED THE MEMBERS AND BANK PRESIDENT WHAT I HAD DONE. I REALIZE THIS WAS NOT THE PROPER WAY TO HANDLE THIS IN RETROSPECT. HOWEVER, I SIGNED HUNDREDS OF CHECKS MADE OUT TO THE AGENCY IN THE PROCEEDING TWO YEARS. THIS TIME THE PRESIDENT WAS GOING TO END MY ANTAGONISM ONCE AND FOR ALL. THE AMOUNT WAS $17,413.00. THE RESTITUTION THE COURT GAVE WAS $8,500.00 WHICH WAS IN AGREEMENT WITH MY INITIAL 50% CONTRACT. TWO GRAVE ERRORS ON MY PART 1) THE PLEA OF NOLO CONTENDERE - I SIMPLY WAS TOLD THAT THIS WAS A PLEA - THAT I DID IT NOT THAT I WAS GUILTY; 2) THE APPROACH I TOOK TO OBTAIN MY DUE MONIES. THIS PERIOD OF MY LIFE 1977 TO 1980 WAS A PERIOD OF ABSOLUTE DEPRESSION AND DESTRUCTION. NOW 10 YEARS LATER, I HAVE NOT HAD ABSOLUTELY ANY QUESTIONS ABOUT MY INTEGRITY. I WOULD HOPE FOR A SECOND CHANCE BY YOUR ORGANIZATION. ATTACHED IS A LETTER DATED 3/2/90, FROM THE OFFICE OF FORD, KLAPHEKE & MEYER, ATTORNEYS AT LAW, WHICH DISCLOSES THE FOLLOWING DETAILS: THIS LETTER IS TO ADVISE THAT I AM FAMILIAR WITH THE CHARGE OF BANK EMBEZZLEMENT AGAINST RAYMOND T. BLUNK IN SEPTEMBER, 1978. THE CASE WAS NEVER TRIED *SEE FAQ #1*