FINRA

FINRA RULES 2010 AND 3270; NASD RULE 3030 AND 3040: RYAN, WHILE REGISTERED WITH A MEMBER FIRM, MET AND BEGAN WORKING WITH AN INDIVIDUAL WHO, AMONG OTHER THINGS, INVESTED IN STARTUP AND PUBLIC SHELL COMPANIES. RYAN STARTED RECEIVING COMPENSATION FROM ENTITIES CONTROLLED BY THE INDIVIDUAL, INCLUDING FROM A PUBLICLY TRADED COMPANY AND FOUR PRIVATE ENTITIES. RYAN WAS AN OFFICER AND BOARD MEMBER OF THE PUBLICLY TRADED COMPANY AND ONE OF THE PRIVATE ENTITIES AND ALSO BECAME A SALARIED EMPLOYEE OF ONE OF THE PRIVATE ENTITIES. RYAN RECEIVED MORE THAN $400,000 FROM THE VARIOUS ENTITIES CONTROLLED BY THE INDIVIDUAL FOR SERVICES HE PROVIDED. RYAN'S FIRM REQUIRED REGISTERED REPRESENTATIVES TO REPORT, AND OBTAIN APPROVAL FOR, ALL OUTSIDE BUSINESS ACTIVITIES (OBAS) PRIOR TO ENGAGING IN THEM. THE FIRM'S REPRESENTATIVES WERE TO NOTIFY THE FIRM OF PROPOSED OBAS BY COMPLETING AND SUBMITTING A FORM THROUGH AN INTERNAL ELECTRONIC REPORTING SYSTEM. RYAN DID NOT TIMELY, FULLY, OR ACCURATELY NOTIFY HIS FIRM OF HIS OBAS, NOR DID HE UPDATE THE INFORMATION PROVIDED TO THE FIRM AS HIS ROLE IN THE OTHER ENTITIES CHANGED, AND HE NEVER NOTIFIED HIS FIRM OF THE PAYMENTS HE RECEIVED FROM THE OTHER ENTITIES. RYAN PARTICIPATED IN PRIVATE SALES OF APPROXIMATELY $1.5 MILLION IN RESTRICTED STOCK TO FIRM CUSTOMERS AND OTHER INDIVIDUALS. RYAN DID NOT PROVIDE WRITTEN NOTICE OF THE SALES TO HIS FIRM, AND DID NOT RECEIVE THIS FIRM'S APPROVAL TO ENGAGE IN THEM. THE FIRM LEARNED OF RYAN'S PARTICIPATION AS THE RESULT OF AN INVESTIGATION CONDUCTED AFTER HE LEFT THE FIRM.

Acceptance, Waiver & Consent(AWC)

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

$40,000.00

Restitution

$55,000.00

Suspension

ANY CAPACITY

TWO YEARS

12/16/2013

12/15/2015

WITHOUT ADMITTING OR DENYING THE FINDINGS, RYAN CONSENTED TO THE DESCRIBED SANCTIONS AND TO THE ENTRY OF FINDINGS, THEREFORE HE IS FINED $40,000, ORDERED TO PAY $55,000, PLUS INTEREST, RESTITUTION TO CUSTOMERS, AND SUSPENDED FROM ASSOCIATION WITH ANY FINRA MEMBER IN ANY CAPACITY FOR TWO YEARS. THE FINE AND RESTITUTION SHALL BE DUE AND PAYABLE PRIOR TO 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 PROCEEDING, WHICHEVER IS EARLIER. IF FOR ANY REASON RESPONDENT CANNOT LOCATE THE CUSTOMERS AFTER REASONABLE AND DOCUMENTED EFFORTS, WITHIN A REASONABLE TIME PERIOD, THE RESPONDENT SHALL FORWARD ANY UNDISTRIBUTED RESTITUTION AND INTEREST TO THE APPROPRIATE ESCHEAT, UNCLAIMED PROPERTY, OR ABANDONED PROPERTY FUNDS FOR THE STATE IN WHICH THE CUSTOMER IS LAST KNOWN TO HAVE RESIDED. THE SUSPENSION IS IN EFFECT FROM DECEMBER 16, 2013, THROUGH DECEMBER 15, 2015.

WITHOUT ADMITTING OR DENYING THE FINDINGS, RYAN CONSENTED TO THE DESCRIBED SANCTIONS AND TO THE ENTRY OF FINDINGS, THEREFORE HE IS FINED $40,000, ORDERED TO PAY $55,000, PLUS INTEREST, RESTITUTION TO CUSTOMERS, AND SUSPENDED FROM ASSOCIATION WITH ANY FINRA MEMBER IN ANY CAPACITY FOR TWO YEARS. THE FINE AND RESTITUTION SHALL BE DUE AND PAYABLE PRIOR TO 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 PROCEEDING, WICHEVER IS EARLIER. IF FOR ANY REASON RESPONDENT CANNOT LOCATE THE CUSTOMERS AFTER REASONALBE AND DOCUMENTED EFFORTS, WHITHIN A REASONABLE TIME PERIOD, THE RESPONDENT SHALL FORWARD ANY UNDISTRIBUTED RESTITUTION AND INTEREST TO THE APPROPRIATE ESCHEAT, UNCLIAMED PROPERTY, OR ABANDONED PROPERTY FUNDS FOR THE STATE IN WHICH THE CUSTOMER IS LAST KNOWN TO HAVE RESIDED. THE SUSPENSION IS IN EFFECT FROM DECEMBER 16, 2013, THROUGH DECEMBER 15, 2015.

ALLLEGED MISREPRESENTATION

$5,000.00

CLIENT ALLEGES THAT MEDICAL CAPITAL INVESTMENT WAS MISREPRESENTATED AS SAFE.

$121,937.50

$24,727.54

IN CONNECTION WITH THE RECOMMENDATION AND SALE OF MEDICAL CAPITAL AND PROVIDENT SHALE, CLAIMANTS ALLEGATIONS AGAINST RESPONDENTS INCLUDE UNSUITABILITY, NEGLIGENT MISREPRESENTATION AND OMISSIONS OF FACT, AND BREACH OF FIDUCIARY DUTY.

$1,246,000.00

$900,072.28

MICHAEL RYAN IS NOT A NAMED RESPONDENT IN THIS MATTER. THIS CLAIM WAS PART OF A GLOBAL SETTLEMENT BY SECURITIES AMERICA, INC. THIS CLIENTS SETTLEMENT AMOUNT WAS $20,000.