UNITED STATES SECURITIES AND EXCHANGE COMMISSION

SEC ADMIN RELEASES 33-9455, 34-70485, IA RELEASE 3677, INVESTMENT COMPANY ACT OF 1940 RELEASE 30696, SEPTEMBER 24, 2013: THE SECURITIES AND EXCHANGE COMMISSION ("COMMISSION") DEEMED IT APPROPRIATE AND IN THE PUBLIC INTEREST THAT PUBLIC ADMINISTRATIVE AND CEASE-AND-DESIST PROCEEDINGS BE INSTITUTED PURSUANT TO SECTION 8A OF THE SECURITIES ACT OF 1933 ("SECURITIES ACT"), SECTIONS 15(B) AND 21C OF THE SECURITIES EXCHANGE ACT OF 1934 ("EXCHANGE ACT"), SECTION 203(F) OF THE INVESTMENT ADVISERS ACT OF 1940 ("ADVISERS ACT"), SECTION 9(B) OF THE INVESTMENT COMPANY ACT OF 1940 ("INVESTMENT COMPANY ACT"), SECTION 8A OF THE SECURITIES ACT AND SECTIONS 15(B) AND 21C OF THE EXCHANGE ACT, AND SECTION 8A OF THE SECURITIES ACT AND SECTION 21C OF THE EXCHANGE ACT AGAINST DIEGO F. HERNANDEZ ("HERNANDEZ"), AND FOUR FIRMS THAT HE OWNS AND CONTROLS (COLLECTIVELY "RESPONDENTS"). THE DIVISION OF ENFORCEMENT ALLEGES THAT: BETWEEN JULY 2011 AND APPROXIMATELY APRIL 2013, HERNANDEZ, THROUGH HIS FIRMS, WILLFULLY VIOLATED THE ANTIFRAUD PROVISIONS OF THE SECURITIES ACT AND THE EXCHANGE ACT BY RAISING AND MISAPPROPRIATING APPROXIMATELY $921,000 FROM 13 COLORADO INVESTORS THROUGH A FRAUDULENT OFFERING OF SECURITIES. HERNANDEZ CARRIED OUT HIS FRAUDULENT OFFERING BY MEETING WITH EACH INVESTOR AND TELLING THEM THAT HE, THROUGH HIS ENTITIES, WOULD INVEST THEIR MONEY IN CORPORATE BONDS OR ANOTHER "SAFE" INVESTMENT THAT WOULD PAY A GUARANTEED, ABOVE-MARKET ANNUAL INTEREST RATE. IN REALITY, HERNANDEZ, THROUGH HIS FIRMS, WILLFULLY MISAPPROPRIATED INVESTOR FUNDS FOR (1) PERSONAL EXPENSES, (2) BUSINESS EXPENSES, AND (3) TO REPAY OTHER INVESTORS. BETWEEN JULY 2011 AND JANUARY 2013, IN CONNECTION WITH HIS FRAUDULENT OFFERING AND THROUGH HIS FIRMS, HERNANDEZ AND HIS ENTITIES ALSO WILLFULLY OPERATED AS UNREGISTERED BROKERS. AS A RESULT OF THE CONDUCT, HERNANDEZ WILLFULLY VIOLATED SECTION 17(A) OF THE SECURITIES ACT, SECTION 10(B) OF THE EXCHANGE ACT AND RULE 10B-5 THEREUNDER; AND WILLFULLY VIOLATED SECTION 15(A) OF THE EXCHANGE ACT.

Order

Bar (Permanent)

SEE COMMENTS

Indefinite

5/1/2014

Cease and Desist

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

$710,000.00

Disgorgement

$710,000.00

Monetary Penalty other than Fines

$69,010.71

Prohibition

FINRA

FINRA RULES 2010, 3270, 8210: HERNANDEZ FAILED TO RESPOND TO NUMEROUS FINRA REQUESTS FOR INFORMATION AND DOCUMENTS. HERNANDEZ ENGAGED IN OUTSIDE BUSINESS ACTIVITIES BUT DID NOT DISCLOSE TO HIS MEMBER FIRM, OR RECEIVE PRIOR APPROVAL FROM THE FIRM, TO ENGAGE IN SUCH ACTIVITIES.

Acceptance, Waiver & Consent(AWC)

Bar (Permanent)

All Capacities

Indefinite

6/20/2013

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