FINRA

RESPONDENT GAUL FAILED TO COMPLY WITH AN ARBITRATION AWARD OR SETTLEMENT AGREEMENT OR TO SATISFACTORILY RESPOND TO A FINRA REQUEST TO PROVIDE INFORMATION CONCERNING THE STATUS OF COMPLIANCE.

LETTER

Suspension

ANY CAPACITY

N/A

5/9/2012

PURSUANT TO ARTICLE VI, SECTION 3 OF FINRA BY-LAWS AND FINRA RULE 9554, RESPONDENT GAUL IS SUSPENDED FOR FAILURE TO COMPLY WITH AN ARBITRATION AWARD OR SETTLEMENT AGREEMENT OR TO SATISFACTORILY RESPOND TO A FINRA REQUEST TO PROVIDE INFORMATION CONCERNING THE STATUS OF COMPLIANCE.

FINRA

RESPONDENT GAUL FAILED TO PAY FINES AND/OR COSTS OF $10,000 IN FINRA CASE #2010021058402.

LETTER

Revocation

PURSUANT TO FINRA RULE 8320, RESPONDENT GAUL'S FINRA REGISTRATION IS REVOKED FOR FAILURE TO PAY FINES AND/OR COSTS.

FINRA

RESPONDENT GAUL FAILED TO COMPLY WITH AN ARBITRATION AWARD OR SETTLEMENT AGREEMENT OR TO SATISFACTORILY RESPOND TO A FINRA REQUEST TO PROVIDE INFORMATION CONCERNING THE STATUS OF COMPLIANCE.

LETTER

Suspension

ANY CAPACITY

N/A

1/9/2012

PURSUANT TO ARTICLE VI, SECTION 3 OF FINRA BY-LAWS AND FINRA RULE 9554, RESPONDENT GAUL IS SUSPENDED FOR FAILURE TO COMPLY WITH AN ARBITRATION AWARD OR SETTLEMENT AGREEMENT OR TO SATISFACTORILY RESPOND TO A FINRA REQUEST TO PROVIDE INFORMATION CONCERNING THE STATUS OF COMPLIANCE.

FINRA

FINRA RULES 2010, 3130, NASD RULES 2110, 3010, 3012, MSRB RULE G-27: A MEMBER FIRM, ACTING THROUGH GAUL AND ANOTHER FIRM PRINCIPAL, NEGLIGENTLY OMITTED MATERIAL FACTS IN CONNECTION WITH ITS SALES OF PROMISSORY NOTES. THE NOTES WERE ISSUED BY AN ENTITY WHICH WAS CONTROLLED BY A REAL ESTATE DEVELOPER. THE FIRM, ACTING THROUGH GAUL AND ANOTHER FIRM PRINCIPAL, NEGLIGENTLY FAILED TO DISCLOSE TO INVESTORS THAT THE ENTITY HAD BEEN EXPERIENCING CASH FLOW PROBLEMS AND THAT THE ENTITY AND OTHER COMPANIES AFFILIATED WITH THE REAL ESTATE DEVELOPER HAD FAILED TO MAKE REQUIRED INTEREST PAYMENTS TO INVESTORS. IN ADDITION, THE FIRM, ACTING THROUGH GAUL AND ANOTHER FIRM PRINCIPAL, NEGLIGENTLY FAILED TO DISCLOSE THAT IT WAS UNLIKELY THAT THE ENTITY'S AFFILIATED COMPANY WOULD BE ABLE TO MAKE ITS SCHEDULED PRINCIPAL PAYMENTS TOTALING $10 MILLION THAT WERE DUE TO ITS NOTE HOLDERS. THE FIRM, ACTING THROUGH GAUL, FAILED TO ESTABLISH, MAINTAIN AND ENFORCE A SYSTEM OF SUPERVISORY CONTROL POLICIES AND PROCEDURES THAT (A) TESTED AND VERIFIED THAT ITS SUPERVISORY PROCEDURES WERE REASONABLY DESIGNED WITH RESPECT TO THE ACTIVITIES OF THE FIRM AND ITS REGISTERED REPRESENTATIVES AND ASSOCIATED PERSONS TO ACHIEVE COMPLIANCE WITH APPLICABLE SECURITIES LAWS AND REGULATIONS AND (B) CREATE ADDITIONAL OR AMENDED SUPERVISORY PROCEDURES WHERE THE NEED WAS IDENTIFIED BY SUCH TESTING AND VERIFICATION. THE FIRM'S SUPERVISORY CONTROL POLICIES AND PROCEDURES FAILED TO IDENTIFY PRODUCING MANAGERS AND ASSIGN QUALIFIED PRINCIPALS TO SUPERVISE SUCH MANAGERS. THE FIRM ALSO FAILED TO ELECTRONICALLY NOTIFY FINRA OF ITS RELIANCE ON THE "LIMITED SIZE AND RESOURCES" EXCEPTION. FOR THE YEAR-END 2008, THE FIRM, ACTING THROUGH GAUL, FAILED TO PREPARE AN ANNUAL CERTIFICATION FROM ITS CHIEF EXECUTIVE OFFICER (CEO) (OR EQUIVALENT OFFICER) THAT IT HAD IN PLACE PROCESSES TO ESTABLISH, MAINTAIN, REVIEW, TEST AND MODIFY WRITTEN COMPLIANCE POLICIES AND WRITTEN SUPERVISORY PROCEDURES REASONABLY DESIGNED TO ACHIEVE COMPLIANCE WITH APPLICABLE FINRA RULES, MSRB RULES AND FEDERAL SECURITIES LAWS AND REGULATIONS, AND THAT THE CEO HAD CONDUCTED ONE OR MORE MEETINGS WITH THE FIRM'S CHIEF COMPLIANCE OFFICER IN THE PRECEDING TWELVE MONTHS TO DISCUSS SUCH PROCESSES. IN ADDITION, FOR THE YEAR-END 2009, THE FIRM, ACTING THROUGH GAUL, FILED AN ANNUAL CERTIFICATION THAT DID NOT FULLY COMPLY WITH FINRA RULE 3130(C). THE FIRM, ACTING THROUGH GAUL, ALSO FAILED TO ESTABLISH, MAINTAIN AND/OR ENFORCE WRITTEN SUPERVISORY PROCEDURES REASONABLY DESIGNED TO ACHIEVE COMPLIANCE WITH THE LAWS AND REGULATIONS APPLICABLE TO ITS BUSINESS IN CONDUCTING PRIVATE PLACEMENT OFFERINGS (INCLUDING TRAINING REPRESENTATIVES REGARDING THE RISKS FOR THESE OFFERINGS AND ESTABLISHING STANDARDS FOR DETERMINING THE SUITABILITY OF THESE OFFERINGS FOR INVESTORS), THE REVIEW OF ELECTRONIC CORRESPONDENCE, AND THE REVIEW AND APPROVAL OF ADVERTISING MATERIALS.

Acceptance, Waiver & Consent(AWC)

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

$10,000.00

Suspension

ALL CAPACITIES

30 BUSINESS DAYS

11/7/2011

12/19/2011

ANY PRINCIPAL CAPACITY

18 MONTHS

11/7/2011

5/6/2013

WITHOUT ADMITTING OR DENYING THE FINDINGS, GAUL CONSENTED TO THE DESCRIBED SANCTIONS AND TO THE ENTRY OF FINDINGS; THEREFORE HE IS FINED $10,000, SUSPENDED FROM ASSOCIATION WITH ANY FINRA MEMBER IN ANY CAPACITY FOR 30 BUSINESS DAYS, AND SUSPENDED FROM ASSOCIATION WITH ANY FINRA MEMBER IN ANY PRINCIPAL CAPACITY FOR 18 MONTHS. THE FINE SHALL BE DUE AND PAYABLE EITHER IMMEDIATELY UPON REASSOCIATION WITH A MEMBER FIRM FOLLOWING THE 30 BUSINESS DAY SUSPENSION, OR PRIOR TO ANY APPLICATION OR REQUEST FOR RELIEF FROM ANY STATUTORY DISQUALIFICATION RESULTING FROM THIS OR ANY OTHER EVENT OR PROCEEDING, WHICHEVER IS EARLIER. THE SUSPENSION IN ANY CAPACITY IS IN EFFECT NOVEMBER 7, 2011 THROUGH DECEMBER 19, 2011. THE SUSPENSION IN ANY PRINCIPAL CAPACITY IS IN EFFECT NOVEMBER 7, 2011 THROUGH MAY 6, 2013.

NEW JERSEY BUREAU OF SECURITIES

GAUL IS THE SUBJECT OF AN ORDER OF A SELF-REGULATORY ORGANIZATION SUSPENDING HIM FROM A NATIONAL SECURITIES ASSOCIATION N.J.S.A. 49:3-58(A)(1); N.J.S.A. 49:3-58(A)(2)(VI). GAUL IS THE SUBJECT OF AN ORDER OF A SELF-REGULATORY ORGANIZATION REVOKING HIM FROM A NATIONAL SECURITIES ASSOCIATION N.J.S.A. 49:3-58(A)(1); N.J.S.A. 49:3-58(A)(2)(VI). GAUL HAS FAILED TO REASONABLY SUPERVISE THE AGENTS OF AWS, FOR WHOM HE HAD SUPERVISORY RESOPNSIBILITY N.J.S.A. 49:3-58(A)(1); N.J.S.A. 49:3-58(A)(2)(XI).

Order

Revocation

THE REVOCATION OF GAUL'S REGISTRATION AS AN AGENT AND INVESTMENT ADVISER REPRESENATIVE IS IN THE PUBLIC INTEREST, AND NECESSARY FOR THE PROTECTION OF INVESTORS.

unsuitability, failure to supervise, control person liability, breach of fiduciary duty, misrepresentation/omission amounting to securities fraud, negligence and comparative negligence, breach of contract, respondeat superior, and apparent authority.

The Award has not been paid.

FINRA

FINRA RULE 2010, NASD RULES 2110, 3010: GAUL FAILED TO ENFORCE HIS MEMBER FIRM'S WRITTEN SUPERVISORY PROCEDURES WITH RESPECT TO BRANCH OFFICE INSPECTIONS. GAUL DID NOT CONDUCT THE REQUIRED QUARTERLY BRANCH INSPECTIONS. INSTEAD, GAUL INSPECTED BRANCH OFFICES ANNUALLY, AT MOST, AND IN THE CASE OF ONE BRANCH, FAILED TO MAKE AN INSPECTION FOR ALMOST TWO YEARS. WHEN THAT BRANCH INSPECTION WAS FINALLY CONDUCTED, GAUL FAILED TO REVIEW THE BRANCH'S BANKING RECORDS. AS A RESULT, HE FAILED TO DETECT THE FACT THAT ONE OF THE REPRESENTATIVES HAD BEEN SHARING COMMISSION WITH AN INDIVIDUAL WHO HAD BEEN BARRED FROM THE SECURITIES INDUSTRY.

Acceptance, Waiver & Consent(AWC)

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

$5,000.00

WITHOUT ADMITTING OR DENYING THE FINDINGS, GAUL CONSENTED TO THE DESCRIBED SANCTION AND TO THE ENTRY OF FINDINGS; THEREFORE HE IS FINED $5,000.

WITHOUT ADMITTING OR DENYING THE FINDINGS, GAUL CONSENTED TO THE DESCRIBED SANCTION AND THE ENTRY OF FINDINGS; THEREFORE HIS IS FINED $5,000.

misrepresentation, unsuitability, sale of unregistered securities, violation of state and federal securities laws, violation of FINRA conduct rules, failure to supervise, breach of contract, breach of fiduciary duty, fraud, and common law fraud.

$157,000.00

The Award has not been paid.