FINRA

RESPONDENT RACHLIN FAILED TO COMPLY WITH AN ARBITRATION AWARD OR SETTLEMENT AGREEMENT OR TO SATISFACTORILY RESPOND TO A FINRA REQUEST TO PROVIDE INFORMATION CONCERNING THE STATUS OF COMPLIANCE.

LETTER

Suspension

ANY CAPACITY

N/A

2/5/2014

PURSUANT TO ARTICLE VI, SECTION 3 OF FINRA BY-LAWS, AND FINRA RULE 9554, RESPONDENT RACHLIN IS SUSPENDED FEBRUARY 5, 2014 FOR FAILURE TO COMPLY WITH AN ARBITRATION AWARD OR SETTLEMENT AGREEMENT OR TO SATISFACTORILY RESPOND TO A FINRA REQUEST TO PROVIDE INFORMATION CONCERNING THE STATUS OF COMPLIANCE.

FINRA

RESPONDENT RACHLIN FAILED TO COMPLY WITH AN ARBITRATION AWARD OR SETTLEMENT AGREEMENT OR TO SATISFACTORILY RESPOND TO A FINRA REQUEST TO PROVIDE INFORMATION CONCERNING THE STATUS OF COMPLIANCE.

LETTER

Suspension

ANY CAPACITY

N/A

1/6/2014

PURSUANT TO ARTICLE VI, SECTION 3 OF FINRA BY-LAWS, AND FINRA RULE 9554, RESPONDENT RACHLIN IS SUSPENDED JANUARY 6, 2014 FOR FAILURE TO COMPLY WITH AN ARBITRATION AWARD OR SETTLEMENT AGREEMENT OR TO SATISFACTORILY RESPOND TO A FINRA REQUEST TO PROVIDE INFORMATION CONCERNING THE STATUS OF COMPLIANCE.

FINRA

RESPONDENT RACHLIN FAILED TO RESPOND TO FINRA REQUEST FOR INFORMATION.

LETTER

Bar (Permanent)

All Capacities

Indefinite

9/4/2012

PURSUANT TO FINRA RULE 9552(H) AND IN ACCORDANCE WITH FINRA'S NOTICE OF SUSPENSION AND SUSPENSION FROM ASSOCIATION LETTERS DATED MAY 29, 2012 AND JUNE 22, 2012, RESPECTIVELY, ON SEPTEMBER 4, 2012, RACHLIN IS BARRED FROM ASSOCIATION WITH ANY FINRA MEMBER IN ANY CAPACITY. RESPONDENT FAILED TO REQUEST TERMINATION OF HIS SUSPENSION WITHIN THREE MONTHS OF THE DATE OF THE NOTICE OF SUSPENSION, THEREFORE, HE IS AUTOMATICALLY BARRED FROM ASSOCIATION WITH ANY FINRA MEMBER IN ANY CAPACITY.

FINRA

RESPONDENT RACHLIN FAILED TO COMPLY WITH AN ARBITRATION AWARD OR SETTLEMENT AGREEMENT OR TO SATISFACTORILY RESPOND TO A FINRA REQUEST TO PROVIDE INFORMATION CONCERNING THE STATUS OF COMPLIANCE.

LETTER

Suspension

ANY CAPACITY

N/A

5/9/2012

PURSUANT TO ARTICLE VI, SECTION 3 OF FINRA BY-LAWS AND FINRA RULE 9554, RESPONDENT RACHLIN IS SUSPENDED FOR FAILURE TO COMPLY WITH AN ARBITRATION AWARD OR SETTLEMENT AGREEMENT OR TO SATISFACTORILY RESPOND TO A FINRA REQUEST TO PROVIDE INFORMATION CONCERNING THE STATUS OF COMPLIANCE.

FINRA

RESPONDENT RACHLIN FAILED TO COMPLY WITH AN ARBITRATION AWARD OR SETTLEMENT AGREEMENT OR TO SATISFACTORILY RESPOND TO A FINRA REQUEST TO PROVIDE INFORMATION CONCERNING THE STATUS OF COMPLIANCE.

LETTER

Suspension

ANY CAPACITY

N/A

1/9/2012

PURSUANT TO ARTICLE VI, SECTION 3 OF FINRA BY-LAWS AND FINRA RULE 9554, RESPONDENT RACHLIN IS SUSPENDED FOR FAILURE TO COMPLY WITH AN ARBITRATION AWARD OR SETTLEMENT AGREEMENT OR TO SATISFACTORILY RESPOND TO A FINRA REQUEST TO PROVIDE INFORMATION CONCERNING THE STATUS OF COMPLIANCE.

FRAUDULENT INDUCEMENT; MATERIAL MISREPRESENTATIONS; SUITABILITY; FAILURE TO DISCLOSE MATERIAL FACTS; BREACH OF FIDUCIARY DUTY; VIOLATION OF SECURITIES EXCHANGE ACT OF 1934

$397,755.92

The Award has not been paid.

FINRA

FINRA RULE 2010, NASD RULES 2110, 2210(D)(1)(A), 2210(D)(1)(B), 2711(H)(1)(A): A MEMBER FIRM, ACTING THROUGH RACHLIN AND ANOTHER FIRM PRINCIPAL, NEGLIGENTLY OMITTED MATERIAL FACTS IN CONNECTION WITH ITS SALES OF PROMISSORY NOTES. THE NOTES WERE ISSUED BY AN ENTITY WHICH WAS CONTROLLED BY A REAL ESTATE DEVELOPER. THE FIRM, ACTING THROUGH RACHLIN AND ANOTHER FIRM PRINCIPAL, NEGLIGENTLY FAILED TO DISCLOSE TO INVESTORS THAT THE ENTITY HAD BEEN EXPERIENCING CASH FLOW PROBLEMS AND THAT THE ENTITY AND OTHER COMPANIES AFFILIATED WITH THE REAL ESTATE DEVELOPER HAD FAILED TO MAKE REQUIRED INTEREST PAYMENTS TO INVESTORS. IN ADDITION, THE FIRM, ACTING THROUGH RACHLIN AND ANOTHER FIRM PRINCIPAL, NEGLIGENTLY FAILED TO DISCLOSE THAT IT WAS UNLIKELY THAT THE ENTITY'S AFFILIATED COMPANY WOULD BE ABLE TO MAKE ITS SCHEDULED PRINCIPAL PAYMENTS TOTALING $10 MILLION THAT WERE DUE TO ITS NOTE HOLDERS. RACHLIN HELPED PREPARE A DOCUMENT CALLED "INVESTOR LETTER" FOR A COMPANY THAT WAS LATER DISTRIBUTED BY HIS FIRM. THE INVESTOR LETTER CONSTITUTED A RESEARCH REPORT, BUT IT FAILED TO DISCLOSE A FIRM REPRESENTATIVE'S OWNERSHIP INTEREST IN THE COMPANY AND HIS RECEIPT OF COMPENSATION FROM THE COMPANY. RACHLIN HELPED PREPARE POWERPOINT PRESENTATIONS REGARDING THE COMPANY THAT WERE USED BY THE FIRM'S REGISTERED REPRESENTATIVES TO SOLICIT POTENTIAL INVESTORS AT SEMINARS. THE PRESENTATIONS CONTAINED STATEMENTS AND PROJECTIONS THAT WERE WITHOUT BASIS, FALSE, EXAGGERATED, UNWARRANTED AND/OR MISLEADING. THEY ALSO FAILED TO PROVIDE A BALANCED PRESENTATION BY OMITTING MATERIAL INFORMATION REGARDING THE SIGNIFICANT RISKS ASSOCIATED WITH AN INVESTMENT IN THE COMPANY.

Acceptance, Waiver & Consent(AWC)

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

$10,000.00

Suspension

ALL CAPACITIES

30 BUSINESS DAYS

11/7/2011

12/19/2011

ANY PRINCIPAL CAPACITY

18 MONTHS

11/7/2011

5/6/2013

WITHOUT ADMITTING OR DENYING THE FINDINGS, RACHLIN CONSENTED TO THE DESCRIBED SANCTIONS AND TO THE ENTRY OF FINDINGS; THEREFORE HE IS FINED $10,000, SUSPENDED FROM ASSOCIATION WITH ANY FINRA MEMBER IN ANY CAPACITY FOR 30 BUSINESS DAYS, AND SUSPENDED FROM ASSOCIATION WITH ANY FINRA MEMBER IN ANY PRINCIPAL CAPACITY FOR 18 MONTHS. THE FINE SHALL BE DUE AND PAYABLE EITHER IMMEDIATELY UPON REASSOCIATION WITH A MEMBER FIRM FOLLOWING THE 30 BUSINESS DAY SUSPENSION, OR PRIOR TO ANY APPLICATION OR REQUEST FOR RELIEF FROM ANY STATUTORY DISQUALIFICATION RESULTING FROM THIS OR ANY OTHER EVENT OR PROCEEDING, WHICHEVER IS EARLIER. THE SUSPENSION IN ANY CAPACITY IS IN EFFECT NOVEMBER 7, 2011 THROUGH DECEMBER 19, 2011. THE SUSPENSION IS ANY PRINCIPAL CAPACITY IS IN EFFECT FROM NOVEMBER 7, 2011 THROUGH MAY 6, 2013.

NEW JERSEY BUREAU OF SECURITIES

RACHLIN IS THE SUBJECT OF AN ORDER OF A SELF-REGULATORY ORGANIZATION SUSPENDING HIM FROM A NATIONAL SECURITIES ASSOCIATION N.J.S.A. 49:3-58(A)(1); N.J.S.A. 49:3-58(A)(2)(VI).

Order

Revocation

unsuitability, failure to supervise, breach of fiduciary duty, misrepresentation/omission amounting to securities fraud, negligence and comparative negligence, breach of contract, respondeat superior, and apparent authority.

The Award has not been paid.