UNITED STATES SECURITIES AND EXCHANGE COMMISSION

SEC ADMIN RELEASE 34-70743, IA RELEASE 3704, OCTOBER 23, 2013: THE SECURITIES AND EXCHANGE COMMISSION (THE "COMMISSION") DEEMED IT APPROPRIATE AND IN THE PUBLIC INTEREST THAT PUBLIC ADMINISTRATIVE AND CEASE-AND-DESIST PROCEEDINGS BE INSTITUTED PURSUANT TO SECTIONS 203(E) AND 203(K) OF THE INVESTMENT ADVISERS ACT OF 1940 (THE "ADVISERS ACT") AGAINST TWO INVESTMENT ADVISERS, AND PURSUANT TO SECTIONS 203(F) AND 203(K) OF THE ADVISERS ACT AND SECTION 15(B)(6) OF THE SECURITIES EXCHANGE ACT OF 1934 ("EXCHANGE ACT") AGAINST DAVID S. THOMAS, JR. ("THOMAS") AND ANOTHER INDIVIDUAL (COLLECTIVELY, "RESPONDENTS"). THE COMMISSION FOUND THAT THE PROCEEDINGS CONCERN VIOLATIONS OF THE ADVISERS ACT BY A REGISTERED INVESTMENT ADVISER, ARISING FROM THE ADVISER'S INADVERTENT OVER BILLING AND UNDER BILLING OF CERTAIN CLIENTS AND ITS NEGLIGENTLY MAKING FALSE AND MISLEADING DISCLOSURES TO CLIENTS AND POTENTIAL CLIENTS ABOUT THE ADVISER'S HISTORICAL PERFORMANCE, COMPENSATION, CONFLICTS OF INTEREST, AND PRIOR EXAMINATION DEFICIENCIES. THE ADVISER ALSO VIOLATED THE COMPLIANCE-RELATED RULES UNDER THE ADVISERS ACT, AS DID ANOTHER REGISTERED INVESTMENT ADVISER UNDER COMMON CONTROL WITH THE ADVISER, BY FAILING TO CONDUCT THE REQUIRED ANNUAL COMPLIANCE REVIEWS, AND, IN THE CASE OF THE ADVISER, BY FAILING TO MAINTAIN WRITTEN COMPLIANCE POLICIES AND PROCEDURES REASONABLY DESIGNED TO PREVENT VIOLATIONS OF THE ADVISERS ACT AND ITS RULES. THEIR PRINCIPAL AND CHIEF EXECUTIVE OFFICER ("CEO"), DAVID THOMAS, AIDED, ABETTED, AND CAUSED THE ADVERTISING VIOLATIONS, WHILE HE AND THE FIRMS' CHIEF COMPLIANCE OFFICER ("CCO") AIDED, ABETTED, AND CAUSED THE COMPLIANCE-RELATED VIOLATIONS. THESE VIOLATIONS OCCURRED DESPITE WARNINGS BY THE STAFF OF THE COMMISSION'S OFFICE OF COMPLIANCE INSPECTIONS AND EXAMINATIONS ("OCIE") IN CONNECTION WITH ITS EXAMINATIONS OF THE ADVISERS IN 2005, 2008, AND 2011. AS A RESULT OF THE CONDUCT, THOMAS WILLFULLY AIDED AND ABETTED AND CAUSED THE ADVISERS' VIOLATIONS OF, SECTION 206(4) OF THE ADVISERS ACT AND RULE 206(4)-7 THEREUNDER.

Order

Cease and Desist

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

$35,000.00

Undertaking

IN ANTICIPATION OF THE INSTITUTION OF THE PROCEEDINGS, RESPONDENTS SUBMITTED OFFERS OF SETTLEMENT (THE "OFFERS") WHICH THE COMMISSION DETERMINED TO ACCEPT. SOLELY FOR THE PURPOSE OF THE PROCEEDINGS AND ANY OTHER PROCEEDINGS BROUGHT BY OR ON BEHALF OF THE COMMISSION, OR TO WHICH THE COMMISSION IS A PARTY, AND WITHOUT ADMITTING OR DENYING THE FINDINGS, EXCEPT AS TO THE COMMISSION'S JURISDICTION OVER RESPONDENTS AND THE SUBJECT MATTER OF THE PROCEEDINGS, WHICH ARE ADMITTED, RESPONDENTS CONSENTED TO THE ENTRY OF THE ORDER INSTITUTING ADMINISTRATIVE AND CEASE-AND-DESIST PROCEEDINGS PURSUANT TO SECTIONS 203(E), 203(F), AND 203(K) OF THE INVESTMENT ADVISERS ACT OF 1940 AND SECTION 15(B)(6) OF THE EXCHANGE ACT, MAKING FINDINGS, AND IMPOSING REMEDIAL SANCTIONS AND A CEASE-AND-DESIST ORDER (THE "ORDER"). THE COMMISSION DEEMED IT APPROPRIATE, IN THE PUBLIC INTEREST, AND FOR THE PROTECTION OF INVESTORS TO IMPOSE THE SANCTIONS AGREED TO IN EACH OF RESPONDENTS' OFFERS. ACCORDINGLY, PURSUANT TO SECTIONS 203(E) AND 203(K) OF THE ADVISERS ACT WITH RESPECT TO THOMAS, IT IS HEREBY ORDERED THAT RESPONDENT THOMAS CEASE AND DESIST FROM COMMITTING OR CAUSING ANY VIOLATIONS AND ANY FUTURE VIOLATIONS OF SECTIONS 206(4) OF THE ADVISERS ACT AND RULES 206(4)-1 AND 206(4)-7 PROMULGATED THEREUNDER. RESPONDENT THOMAS SHALL PAY A CIVIL MONEY PENALTY IN THE AMOUNT OF $35,000. RESPONDENT THOMAS SHALL COMPLY WITH THE UNDERTAKINGS ENUMERATED IN THE ORDER.

PLANTIFFS ALLEGED UNSUITABLE, BREACH OF FIDUCIOUS DUTY + MISREPRESENTATION OF PLANTIFFS` OBJECTIVES WITH RESPECT TO PURCHASE OF JUNK BONDS + LIMITED PARTNERSHIPS IN THEIR PAINEWEBBER ACCOUNTS DURING 1986-1989 PERIOD. DAMAGES UNSPECIFIED.

$43,750.00

PAINEWEBBER SETTLED THIS MATTER FOR $43,750.00 TO AVOID COST OF LITIGATION. Not Provided

PLAINTIFFS ALLEGE UNSUITABILITY, BREACH OF FID DT + MISREPRESENTATION OF PLANTIFFS` OBJECTIVES WITH RESPECT TO PURCHASE OF JUNK BONDS + LPS DURING 86-89; + DAMAGES IN EXCESS $300K

$16,455.50

THE MATTER WAS SETTLED BY PAINEWEBBER PAYING CLAIMANTS $16,455.50 + RECEIVING A COMPLETE RELEASE. Not Provided

CLIENT ALLEGES BREACH OF CONTRACT, BREACH OF FIDUCIARY DUTY AND VIOLATION OF BLUE SKY LAWS. ALLEGED DAMAGES OVER $160,000.

$160,000.00

$2,000.00

PAINE WEBBER SETTLED THE MATTER FOR $2,000.00.