FINRA

SECTION 10(B) OF THE SECURITIES EXCHANGE ACT OF 1934 AND RULE 10B-5 THEREUNDER, NASD RULES 2110, 2330(A), 8210 - RESPONDENT SOLD UNREGISTERED SECURITIES IN THE FORM OF PROMISSORY NOTES TO PUBLIC CUSTOMERS AND THE SECURITIES DID NOT HAVE THE REPRESENTED PURPOSE OF GENERATING EXTRAORDINARILY PROFITABLE RETURNS FOR INVESTORS BUT RATHER HAD THE PURPOSE OF PROMOTING AN ILLEGAL "PONZI" SCHEME AND SUPPORTING HIS PERSONAL DEBT AND EXPENSES. THE FINDINGS STATED THAT DANIELS' FAILED TO RESPOND TO FINRA REQUESTS FOR INFORMATION.

Acceptance, Waiver & Consent(AWC)

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

OHIO DIVISION OF SECURITIES

THE MISAPPROPRIATION OF APPROX. $2.1 MILLION FROM NINE INDIVIDUALS FROM 1998 THROUGH 2005 BY DEFAULTING ON THE PROMISSORY NOTES SOLD TO THEM AND/OR EMBEZZLING MANY FROM THEIR ACCOUNTS.

Order

Revocation/Expulsion/Denial

NA

NA

CONSPIRACY- FELONY, NOT GUILTY, MAIL FRAUD- TWO COUNTS, FELONY, GUILTY ITSP- FELONY, NOT GUILTY FRAUD W/SECURITIE- FELONY, NOT GUILTY

FELONY

FOUND GUILTY AND CONVICTED AS CHARGED OF THE OFFENSE OF THE USE OF THE MAILS IN INTERSTATE COMMERCE TO SELL UNREGISTERED SECURITIES). SENTENCED TO FIVE YEARS PROBATION ON EACH OF THE TWO COUNTS OF MAIL FRAUD AND FINED $5000/PAID. OTHER CHARGES WERE DISMISSED BY THE COURT.

NATIONAL ASSOCIATION OF SECURITIES DEALERS, INC.

FAILED TO PAY THE $500 FINE

Other

Revocation/Expulsion/Denial

PURSUANT TO ARTICEL V, SECTION 2 OF THE NASD'S RULES OF FAIR PRACTICE, NASD REGISTRATION REVOKED 1/28/80 FOR FAILURE TO PAY FINES AND/OR COSTS IN NASD CASE #C-190. NASD REVOCATION OF REGISTRATION RESCINDED 10/20/87 DUE TO PAYMENT OF $500 FINE.

SECURITIES AND EXCHANGE COMMISSION

SEC ADMINISTRATIVE RELEASE 34-16164, SEPTEMBER 6, 1979: ADMINISTRATIVE ACTION IS BASED ON A PERMANENT INJUNCTION ISSUED ON 07/19/1978 BY THE US DISTRICT COURT FOR THE NORTHERN DISTRICT OF OHIO, ENJOINING DANIELS FROM VIOLATING SECTIONS 5(A) AND 5(C) OF THE SECURITIES ACT AND SECTION 10(B) OF THE EXCHANGE ACT AND RULE 10B-5 THEREUNDER; THAT DANIELS WILFULLY AIDED AND ABETTED VIOLATIONS OF SECTIONS 5(A) AND 5(C) OF THE SECURITIES ACT AND SECTIONS 15(C)(3) AND 17(A) OF THE EXCHANGE ACT AND RULES 15C3-1, 17A-3, 17A-5 AND 17A-11 THEREUNDER; AND WILFULLY VIOLATED AND WILFULLY AIDED AND ABETTED VIOLATIONS OF SECTION 17(A) OF THE SECURITIES ACT AND SECTION 10(B) OF THE EXCHANGE ACT AND RULE 10B-5 THEREUNDER.

Decision & Order of Offer of Settlement

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ON OR ABOUT 9/6/79, THE U.S. SECURITIES AND EXCHANGE COMMISSION ISSUED ITS FINDINGS AND ORDER IMPOSING REMEDIAL SANCTIONS. ON THE BASIS OF THE ORDER FOR PROCEEDINGS AND THE OFFERS OF SETTLEMENT SUBMITTED BY ALL THE NAMED RESPONDENTS, THE COMMISSION ORDERED THAT RICHARD A. DANIELS IS BARRED FROM BEING ASSOCIATED WITH ANY BROKER, DEALER, INVESTMENT COMPANY, OR INVESTMENT ADVISER, OR ANY AFFILIATE THEREOF.

ON 7/18/78, A COMPLAINT (CIVIL ACTION FILE NO. C78-268) WAS FILED BY THE SECURITIES AND EXCHANGE COMMISSION IN THE U.S. DISTRICT COURT FOR THE NORTHERN DISTRICT OF OHIO, EASTERN DIVISION, IN THE MATTER AGAINST PRICE, ALLEN & STEVENS, INCORPORATED, FIRST GUARANTY LEASING CORPORATION, PRICE, ALLEN & STEVENS SECURITIES CORPORATION, THOMAS PRICE FLYNN, RICHARD ALLEN DANIELS, AND JOHN STEVENS KACKLOUDIS. THE COMPLAINT ALLEGED THAT THE DEFENDANTS HAVE ENGAGED, ARE ENGAGED AND ARE ABOUT TO ENGAGE IN ACTS AND PRACTICES WHICH CONSTITUTED AND WILL CONSTITUTE VIOLATIONS OF SECTIONS 5(A), 5(C) AND 17(A) OF THE SECURITIES ACT OF 1933, AS AMENDED ("SECURITIES ACT") [15 USC SECTION 77E(A), 77E(C) AND 77Q(A)], AND SECTION 10(B) OF THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED ("EXCHANGE ACT") [15 USC SECTION 78J(B), AND RULE 10B-5 [17 CFR 240.10B-5] PROMULGATED THEREUNDER, WHICH RULE WAS PRESCRIBED BY THE COMMISSION PURSUANT TO THE EXCHANGE ACT AND WAS IN EFFECT AT ALL TIMES HEREIN ALLEGED, AND IS NOW IN EFFECT. THE ALLEGATIONS OF THE COMPLAINT STATES: SINCE ON OR ABOUT 1/2/75, TO THE DATE OF COMPLAINT, THE DEFENDANTS, WHO TRANSACTED BUSINESS IN AND WHO HAVE DIRECTLY AND INDIRECTLY OFFERED FOR SALE AND SOLD SECURITIES IN THE NORTHERN DISTRICT OF OHIO, EASTERN DIVISION, AND ELSEWHERE, HAVE BEEN DIRECTLY AND INDIRECTLY SELLING AND OFFERING CERTAIN SECURITIES, NAMELY, INVESTMENT CONTRACTS IN THE FORM OF FURNITURE AND OFFICE EQUIPMENT LEASE AGREEMENTS, PAS, INC. AND OTHERS. IN THE OFFER FOR AND SALE OF SUCH SECURITIES, THE DEFENDANTS HAVE BEEN DIRECTLY AND INDIRECTLY MAKING USE OF MEANS AND INSTRUMENTS OF TRANSPORTATION AND COMMUNICATION IN INTERSTATE COMMERCE AND OF THE MAILS TO SELL AND OFFER TO SELL SUCH SECURITIES THROUGH THE USE AND MEDIUM OF PROSPECTUSES *SEE FAQ #1*

SECURITIES AND EXCHANGE COMMISSION

SEC LITIGATION RELEASE ND 78-148 LR-8481: SEC CIVIL ACTION FILED AGAINST DEFENDANT ALLEGES VIOLATING SECTIONS 5(A) AND 5(C) OF THE SECURITIES ACT AND SECTION 10(B) OF THE EXCHANGE ACT AND RULE 10B-5 THEREUNDER; DANIELS WILFULLY AIDED AND ABETTED VIOLATIONS OF SECTIONS 5(A) AND 5(C) OF THE SECURITIES ACT AND SECTIONS 15(C)(3) AND 17(A) OF THE EXCHANGE ACT AND RULES 15C3-1, 17A-3, 17A-5 AND 17A-11 THEREUNDER; AND WILFULLY VIOLATED AND WILFULLY AIDED AND ABETTED VIOLATIONS OF SECTION 17(A) OF THE SECURITIES ACT AND SECTION 10(B) OF THE EXCHANGE ACT AND RULE 10B-5 THEREUNDER.

Judgment Rendered

Cease and Desist/Injunction

7-19-78 PERMANENT INJUNCTION BY CONSENT WITHOUT ADMITTING OR DENYING ALLEGATIONS.

ON 7/18/78, A COMPLAINT (CIVIL ACTION FILE NO. C78-268) WAS FILED BY THE SECURITIES AND EXCHANGE COMMISSION IN THE U.S. DISTRICT COURT FOR THE NORTHERN DISTRICT OF OHIO, EASTERN DIVISION, IN THE MATTER AGAINST PRICE, ALLEN & STEVENS, INCORPORATED, FIRST GUARANTY LEASING CORPORATION, PRICE, ALLEN & STEVENS SECURITIES CORPORATION, THOMAS PRICE FLYNN, RICHARD ALLEN DANIELS, AND JOHN STEVENS KACKLOUDIS. THE COMPLAINT ALLEGED THAT THE DEFENDANTS HAVE ENGAGED, ARE ENGAGED AND ARE ABOUT TO ENGAGE IN ACTS AND PRACTICES WHICH CONSTITUTED AND WILL CONSTITUTE VIOLATIONS OF SECTIONS 5(A), 5(C) AND 17(A) OF THE SECURITIES ACT OF 1933, AS AMENDED ("SECURITIES ACT") [15 USC SECTION 77E(A), 77E(C) AND 77Q(A)], AND SECTION 10(B) OF THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED ("EXCHANGE ACT") [15 USC SECTION 78J(B), AND RULE 10B-5 [17 CFR 240.10B-5] PROMULGATED THEREUNDER, WHICH RULE WAS PRESCRIBED BY THE COMMISSION PURSUANT TO THE EXCHANGE ACT AND WAS IN EFFECT AT ALL TIMES HEREIN ALLEGED, AND IS NOW IN EFFECT. THE ALLEGATIONS OF THE COMPLAINT STATES: SINCE ON OR ABOUT 1/2/75, TO THE DATE OF COMPLAINT, THE DEFENDANTS, WHO TRANSACTED BUSINESS IN AND WHO HAVE DIRECTLY AND INDIRECTLY OFFERED FOR SALE AND SOLD SECURITIES IN THE NORTHERN DISTRICT OF OHIO, EASTERN DIVISION, AND ELSEWHERE, HAVE BEEN DIRECTLY AND INDIRECTLY SELLING AND OFFERING CERTAIN SECURITIES, NAMELY, INVESTMENT CONTRACTS IN THE FORM OF FURNITURE AND OFFICE EQUIPMENT LEASE AGREEMENTS, PAS, INC. AND OTHERS. IN THE OFFER FOR AND SALE OF SUCH SECURITIES, THE DEFENDANTS HAVE BEEN DIRECTLY AND INDIRECTLY MAKING USE OF MEANS AND INSTRUMENTS OF TRANSPORTATION AND COMMUNICATION IN INTERSTATE COMMERCE AND OF THE MAILS TO SELL AND OFFER TO SELL SUCH SECURITIES THROUGH THE USE AND MEDIUM OF PROSPECTUSES

NATIONAL ASSOCIATION OF SECURITIES DEALERS, INC.

ARTICLE III, SECTION 1, NASD RULES OF FAIR PRACTICE - RESPONDENT VIOLATED THE SEC NET CAPITAL RULE FROM JULY 1 THROUGH SEPTEMBER 3, 1976

Decision & Order of Offer of Settlement

Monetary/Fine

$500.00

Censure

CENSURED, FINED $500