FINRA

FINRA RULE 2010, NASD RULES 1031, 2110, 2210(D)(1)(A), 2210(D)(1)(B), 2310, 3040: ELIZONDO SOLD HIS CUSTOMERS "NOTE AGREEMENTS" OFFERED BY A COMPANY WITHOUT HIS MEMBER FIRM'S PERMISSION AND WITHOUT HOLDING THE APPROPRIATE SECURITIES LICENSE. THE COMPANY'S SALES LITERATURE DESCRIBED THESE NOTE AGREEMENTS AS AN INVESTMENT OF MONEY INTO A COMMON ENTERPRISE, WITH INVESTOR FUNDS POOLED TOGETHER AND MANAGED BY A THIRD PARTY, AND WITH THE GUARANTEE OF PROFITS IN THE FORM OF INTEREST PAYMENTS. AS SUCH, THESE NOTE AGREEMENTS WERE SECURITIES, THUS REQUIRING A SELLER TO POSSESS A SERIES 7 LICENSE. ELIZONDO ENTERED INTO A WRITTEN AGREEMENT WITH THE COMPANY TO SELL THE NOTE AGREEMENTS AND TO RECEIVE COMMISSION PAYMENTS FOR THOSE SALES. ELIZONDO REQUESTED PERMISSION FROM HIS FIRM TO SELL THE NOTE AGREEMENTS BUT HIS FIRM DENIED HIS REQUEST AND INSTRUCTED HIM TO REFRAIN FROM ANY FURTHER INVOLVEMENT WITH THE COMPANY. NOTWITHSTANDING HIS FIRM'S INSTRUCTIONS, AND NOTWITHSTANDING HIS LACK OF A SERIES 7 LICENSE, ELIZONDO BEGAN RECOMMENDING THE NOTE AGREEMENTS TO HIS CUSTOMERS AND BEGAN DISTRIBUTING THE COMPANY'S SALES LITERATURE TO CUSTOMERS. ELIZONDO EVENTUALLY SOLD $562,107 WORTH OF NOTE AGREEMENTS TO FIVE CUSTOMERS AND RECEIVED $50,780 IN TOTAL COMMISSIONS. THE CUSTOMERS, MANY OF WHOM WERE INVESTING THEIR RETIREMENT FUNDS, WERE INEXPERIENCED INVESTORS WHO WERE SEEKING CAPITAL PRESERVATION. THESE CUSTOMERS INVESTED IN THE NOTE AGREEMENTS SOLELY BASED UPON ELIZONDO'S RECOMMENDATION. ELIZONDO REPRESENTED THAT THE PRODUCTS WERE SAFE, GUARANTEED A HIGH RETURN WITHIN FIVE YEARS, AND WERE SUITABLE FOR RETIREES SEEKING TO PRESERVE CAPITAL. ELIZONDO, HOWEVER, LACKED ANY FACTUAL BASIS TO MAKE THESE CLAIMS. ELIZONDO DID NOT HAVE ANY EXPERIENCE WITH THE PRODUCTS AND FAILED TO CONDUCT THE REQUIRED DUE DILIGENCE. ELIZONDO HAD NOT BEEN INTRODUCED TO THE COMPANY UNTIL 2008, HAD NEVER BEFORE SOLD A PROMISSORY NOTE PURPORTEDLY FUNDED BY LIFE SETTLEMENTS, AND WAS UNFAMILIAR WITH PROMISSORY NOTES IN GENERAL. YET, WITHOUT ANY REASONABLE BASIS TO DO SO, ELIZONDO RECOMMENDED THE NOTE AGREEMENTS TO HIS CUSTOMERS AS A SAFE INVESTMENT SUITABLE FOR RETIREMENT PLANNING AND CAPITAL PRESERVATION. FURTHER, WHILE RECOMMENDING THE INVESTMENTS TO HIS CUSTOMER, ELIZONDO PROVIDED THEM WITH SALES LITERATURE WHICH CONTAINED SEVERAL UNWARRANTED AND MISLEADING STATEMENTS, FAILED TO DISCLOSE ANY RISKS INVOLVED IN THE INVESTMENTS, AND GUARANTEED THE PRODUCTS WOULD SUCCEED. SUCH STATEMENTS HELPED FORM THE BASIS OF ELIZONDO'S RECOMMENDATIONS TO HIS CUSTOMERS, EVEN THOUGH ELIZONDO DID NOT VERIFY THESE CLAIMS PRIOR TO RECOMMENDING AND SELLING THE NOTE AGREEMENTS TO HIS CUSTOMERS.

Acceptance, Waiver & Consent(AWC)

Bar (Permanent)

All Capacities

Indefinite

11/17/2011

WITHOUT ADMITTING OR DENYING THE FINDINGS, ELIZONDO CONSENTED TO THE DESCRIBED SANCTION AND TO THE ENTRY OF FINDINGS; THEREFORE HE IS BARRED FROM ASSOCIATION WITH ANY FINRA MEMBER IN ANY CAPACITY.

TEXAS

PARTICIPATION IN UNAPPROVED OUTSIDE BUSINESS ACTIVITIES, FAILURE TO UPDATE FORM U-4, INEQUITABLE PRACTICES IN THE SALE OF SECURITIES

Order

Suspension

INVESTMENT ADVISER REPRESENTATIVE

5 YEARS

Undertaking

ACCORDING TO THE TERMS OF THE UNDERTAKING, PAYMETN OF $30,000 TO THE RECEIVER OF NATIONAL LIFE SETTLEMENTS FOR THE BENEFIT OF THE INVESTORS WHO PURCHASED THE NLS AGREEMENTS FROM RICHARD ELIZONDO.