FINRA

WILLFUL VIOLATION OF SECTION 10(B) OF THE SECURITIES EXCHANGE ACT OF 1934 AND RULE 10B-5, AND VIOLATION OF FINRA RULES 2010, 2020, 2150, 3270, 8210, NASD RULES 2110, 2330, 3030: DANZ BECAME THE TREASURER OF A HUMANE SOCIETY, A CHARITABLE ORGANIZATION, WHICH WAS A CUSTOMER OF HIS MEMBER FIRM, HIS ACTIVITIES AT THE HUMANE SOCIETY WERE NOT DISCLOSED TO HIS FIRM AND DANZ FAILED TO PROVIDE WRITTEN NOTICE TO HIS FIRM THAT HE WAS TREASURER OF THE HUMANE SOCIETY. AS TREASURER, DANZ PARTICIPATED IN THE HUMANE SOCIETY'S OPERATIONS, DIRECTED ITS FINANCIAL AFFAIRS, AND HAD SOLE CONTROL OF AND ACCESS TO ITS FINANCIAL RECORDS, BROKERAGE ACCOUNT, AND BANK ACCOUNT. THE FUNDS OF THE HUMANE SOCIETY BROKERAGE ACCOUNT AT DANZ'S FIRM WERE PLACED IN A BOND FUND AND DANZ CONVERTED THOSE FUNDS IN AT LEAST THREE SEPARATE WAYS. FIRST, DANZ SOLD SECURITIES IN THE HUMANE SOCIETY'S BROKERAGE ACCOUNT AND TRANSFERRED THE PROCEEDS TO THE HUMANE SOCIETY'S BANK ACCOUNT, WHEREUPON DANZ WROTE CHECKS TOTALING $260,308 PAYABLE TO ANOTHER ENTITY THAT HE CONTROLLED. THE FUNDS WERE NOT USED FOR THE BENEFIT OF THE HUMANE SOCIETY, BUT INSTEAD WERE CONVERTED FOR DANZ'S PERSONAL USE. DANZ'S SALE OF THE SECURITIES WAS CONTRARY TO HIS REPRESENTATIONS TO THE HUMANE SOCIETY THAT THE FUNDS WOULD STAY INVESTED IN SECURITIES. DANZ COMMUNICATED WITH HIS FIRM BOTH BY TELEPHONE AND BY EMAIL IN FURTHERANCE OF THE SCHEME. THEREBY, DANZ, IN CONNECTION WITH THE PURCHASE OR SALE OF A SECURITY, WILLFULLY VIOLATED OF SECTION 10(B) OF THE SECURITIES EXCHANGE ACT OF 1934 AND RULE 10B-5 PROMULGATED THEREUNDER. SECOND, DANZ USED HUMANE SOCIETY FUNDS TO PURCHASE A CERTIFICATE OF DEPOSIT (CD) AWAY FROM HIS FIRM IN THE AMOUNT OF $105,000, AND HE WITHDREW FUNDS FROM THE CD FOR HIMSELF OR FOR ANOTHER ENTITY THAT HE CONTROLLED, IN THE AMOUNT OF $26,239.81. THE FUNDS WERE NOT USED FOR THE BENEFIT OF THE HUMANE SOCIETY, BUT INSTEAD WERE CONVERTED FOR DANZ'S PERSONAL USE. THIRD, DANZ OPENED A LINE OF CREDIT AWAY FROM HIS FIRM UNDER THE NAME OF THE HUMANE SOCIETY WITHOUT ITS KNOWLEDGE OR APPROVAL AND MADE CHARGES IN THE AMOUNT OF $2,529.58 THAT WERE NOT FOR THE BENEFIT OF THE HUMANE SOCIETY, BUT WERE INSTEAD CONVERTED FOR DANZ'S PERSONAL USE. AN ELDERLY CUSTOMER AND ANOTHER CUSTOMER DELIVERED CHECKS TO DANZ TOTALING $21,000 BASED ON DANZ'S REPRESENTATION THAT HE WOULD USE THE FUNDS TO PURCHASE SECURITIES FOR THEM IN THEIR SEPARATE ACCOUNTS AT THE FIRM. DANZ COMMUNICATED WITH THESE CUSTOMERS ABOUT THE PURPORTED INVESTMENTS USING THE TELEPHONE. CONTRARY TO DANZ'S REPRESENTATIONS, THE FUNDS WERE NOT USED TO PURCHASE SECURITIES FOR THE CUSTOMERS AND WERE NOT DEPOSITED INTO THEIR ACCOUNTS AT THE FIRM. INSTEAD, DANZ DEPOSITED THE FUNDS INTO THE BANK ACCOUNT OF AN ENTITY HE CONTROLLED AND CONVERTED THE FUNDS FOR HIS PERSONAL USE. THEREBY, DANZ, IN CONNECTION WITH THE PURCHASE OR SALE OF A SECURITY, WILLFULLY VIOLATED OF SECTION 10(B) OF THE SECURITIES EXCHANGE ACT OF 1934 AND RULE 10B-5 PROMULGATED THEREUNDER. IN FURTHERANCE OF ITS INVESTIGATION INTO THIS MATTER, FINRA REQUESTED FOR INFORMATION AND DOCUMENTS FROM DANZ AND HE FAILED TO RESPOND TO THE REQUESTS FOR INFORMATION AND DOCUMENTS.

Acceptance, Waiver & Consent(AWC)

Bar (Permanent)

All Capacities

8/6/2013

WITHOUT ADMITTING OR DENYING THE FINDINGS, DANZ CONSENTED TO THE DESCRIBED SANCTION AND TO THE ENTRY OF FINDINGS; THEREFORE, HE IS BARRED FROM ASSOCIATION WITH ANY FINRA MEMBER IN ALL CAPACITIES. RESPONDENT UNDERSTANDS THAT THIS SETTLEMENT INCLUDES A FINDING THAT HE WILLFULLY VIOLATED SECTIONS 10(B) OF THE SECURITIES EXCHANGE ACT OF 1934 AND RULE 10B-5 PROMULGATED THEREUNDER. PURSUANT TO ARTICLE III, SECTION 4 OF FINRA'S BY-LAWS, THIS MAKES HIM SUBJECT TO A STATUTORY DISQUALIFICATION WITH RESPECT TO ASSOCIATION WITH A MEMBER.

CLIENT ALLEGED MISAPPROPRIATION OF FUNDS.

$289,077.39

$414,649.39