UNITED STATES SECURITIES AND EXCHANGE COMMISSION

SEC Admin Release 34-77649, IA Release 40-4372, Investment Company Act Release 40-32076 / April 19, 2016: The Securities and Exchange Commission ("Commission") deems it appropriate and in the public interest that public administrative and cease-and-desist proceedings be, and hereby are, instituted pursuant to Sections 15(b)(6) and 21C of the Securities Exchange Act of 1934 ("Exchange Act"), Sections 203(e), 203(f) and 203(k) of the Investment Advisers Act of 1940 ("Advisers Act"), and Section 9(b) of the Investment Company Act of 1940 ("Investment Company Act") against Larry M. Phillips ("Phillips") ("Respondent"). After an investigation, the Division of Enforcement alleges that: Phillips, the sole owner and principal of his firm, an investment adviser registered with the Commission, engaged in fraudulent trade allocations - "cherry-picking." From at least January 2010 to at least August 2014, Phillips, the firm's principal unfairly and systematically allocated profitable trades to a set of accounts while other accounts were harmed by the allocation of unprofitable trades. By this conduct Phillips willfully violated Section 10(b) of the Exchange Act and Rule 10b-5 thereunder, and in the alternative, Phillips willfully aided and abetted and caused the firm's violations. Phillips willfully violated Sections 206(1) and 206(2) of the Advisers Act, and in the alternative, Phillips willfully aided and abetted and caused the firm's violations. Phillips willfully violated Section 207 of the Advisers Act, and in the alternative, Phillips willfully aided and abetted and caused the firm's violations.

Order

Bar (Permanent)

association with a broker, dealer, investment adviser, municipal securities dealer, municipal advisor, transfer agent, or NRSRO

Indefinite

12/15/2016

participating in any offering of a penny stock

Indefinite

12/15/2016

Cease and Desist

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

$300,000.00

Disgorgement

$25,295.00

Monetary Penalty other than Fines

$3,142.69

Prohibition

NEW YORK STATE DEPARTMENT OF FINANCIAL SERVICES

IT IS ALLEGED THAT MR. PHILLIPS PROVIDED UNTRUE AND INCORRECT INFORMATION ON HIS INITIAL AND RENEWAL APPLICATION FORM TO ACT AS A LIFE AND/OR ACCIDENT HEALTH AGENT.

FINRA

WITHOUT ADMITTING OR DENYING THE FINDINGS, PHILLIPS CONSENTED TO THE SANCTIONS AND TO THE ENTRY OF FINDINGS THAT HE OVERCHARGED CERTAIN CUSTOMERS BY CHARGING BOTH A MARKUP AND INVESTMENT ADVISORY FEES ON THE SAME PRODUCTS.

Acceptance, Waiver & Consent(AWC)

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

$7,500.00

Restitution

$3,436.81

Suspension

ANY AND ALL CAPACITIES

45 CALENDAR DAYS

5/18/2015

7/1/2015

ATTORNEY ON BEHALF OF CA RESIDENT WROTE TO CLIENT'S INSURANCE COMPANY STATING HIS CLIENT'S FA MISREPRESENTED THE FEATURES OF THE MINIMUM GUARANTEED INCOME BENEFIT (MGIB) OF HIS ING VARIABLE ANNUITY PURCHASED IN 12/00. ATTORNEY STATES FA TOLD CLIENT THAT IF ANNUITY DECLINED IN VALUE, THE MGIB WOULD PROTECT AGAINST LOSSES BY GUARANTEEING A 7% RETURN UNTIL THE EXERCISE DATE OF 12/2010. NOW THE CUSTOMER HAS LEARNED THAT MGIB CAPS WHEN HE IS 80 YEARS OLD. ATTORNEY HAS REQUESTED FOR ING TO HONOR THE MGIB FOR 10 YEARS OR RETURN THE ORIGINAL INVESTMENT WITH INTEREST, AND DAMAGES ARE EXTIMATED TO BE $8,000 PLUS INTEREST

$130,000.00

$25,000.00

U5 FILING BY WACHOVIA INDICATED THAT THIS COMPLAINT PREVIOUSLY THOUGHT BY MR. PHILLIPS TO BE CLOSED, WAS SETTLED FOR $25,000.00

ILLINOIS

DISQUALIFICATION UNDER SECTION 8.E(1)(J) BASED ON NASD ORDER.

Dismissed

RESPONDENT SHALL NOT SERVE HIS DEALER IN THE CAPACITY OF DESIGNATED PRINCIPAL FOR THE OFFER OF SALE OF SECURITIES IN ILLINOIS UNTIL 10/31/2008. RESPONDENT IS LEVIED COSTS OF THE INVESTIGATION IN THE AMOUNT OF $1,000.

NASD

NASD CONDUCT RULES 2110, 2210(D)(1)(A), 2210(D)(1)(B), IM-2210-2 - LARRY PHILLIPS ACTING ON BEHALF OF HIS MEMBER FIRM, CREATED AND DISTRIBUTED WRITTEN COMMUNICATIONS THAT FAILED TO DISCLOSE ADEQUATELY MATERIAL FACTS REGARDING INVESTMENT PRODUCTS AND STRATEGIES, OR MADE EXAGGERATED, UNWARRANTED OR MISLEADING STATEMENTS OR CLAIMS REGARDING THOSE PRODUCTS, OR BOTH.

Acceptance, Waiver & Consent(AWC)

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

Suspension

WITHOUT ADMITTING OR DENYING THE ALLEGATIONS, PHILLIPS CONSENTED TO THE DESCRIBED SANCTIONS AND TO THE ENTRY OF FINDINGS THEREFORE, HE IS SUSPENDED FROM ASSOCIATION WITH ANY NASD MEMBER IN ANY CAPACITY FOR 10 BUSINESS DAYS AND FINED $20,000. THE SUSPENSION WIL BEGIN JUNE 6, 2005 AND CONCLUDE JUNE 17, 2005. FINES PAID.

PRUDENTIAL SECURITIES INCORPORATED

Permitted to Resign

NOT PROVIDED IMPROPERLY HIRING AS SUPPORT PERSONNEL THROUGH A TEMPORARY AGENCY ONE EMPLOYED WHO WAS TERMINATED BY THE FIRM.

PERMITTED TO RESIGN THE EMPLOYEE HAD COME TO PRUDENTIAL WITH A $3 MILLION PRODUCER AS HIS SALES ASST. WHILE WAITING TO MOVE INTO PERMANENT OFFICES IT WAS DISCOVERED THAT SHE HAD NOT TOLD THE TRUTH ON HER EMPLOYMENT APPLICATION. AFTER A DISCUSSION WITH HE REGIONAL DIRECTOR, I WAS TOLD TO TERMINATE HER FROM THE PRUDENTIAL PAYROLL AND REHIRE HER THROUGH A TEMPORARY AGENCY. THIS WAS A SHORT TERM PLAN TO FACILITATE THE TRANSFER OF THE PRODUCER'S $200 MILLION ASSET BASE.

1983 CLIENT ALLEGED UNAUTHORIZED AND UNSUITABLE TRANSACTIONS.

$70,000.00

$20,500.00

$20,500 PAID BY DEAN WITTER TO [CUSTOMER]. NO MONETARY OR DISCIPLINARY ACTION TAKEN AGAINST ME. NO ADMISSION OF WRONGDOING WAS GIVEN. [CUSTOMER] CAME IN MY OFFICE DAILY AND MADE STOCK AND OPTIONS TRANSACTIONS WHICH WERE ALWAYS DISCUSSED IN ADVANCE. THE SUITABILITY DISCREPANCY CENTERED AROUND [CUSTOMER]'S STATEMENT OF INCOME TO ME VERSUS HIS TAX RETURN.