Received a letter from client's attorney requesting we negotiate a settlement or they will file an arbitration claim.

$60,000.00

$64,500.00

Customer alleged negligence, unsuitable recommendations, negligent supervision, breach of fiduciary duty and breach of contract.

$250,000.00

$145,000.00

Refute all claims. Customer is High Net Worth, sophisticated Investor with a history of investing in small/mid cap Speculative Securities and stated that he could withstand extreme volatility. While he gave Limited Power of Attorney, he was advised of all trades before or shortly after they were made. He was updated in person (over lunch) or by phone monthly on the status of his accounts. When the Market was under duress he was called. When there was an adverse price move in his Investments he was called, several times. He had me sell at a loss investments that were meant to be held longer term while stating that he didn't care what happened with his Investments as they were off limits. Additionally, he was very aware of his loss in Energy caused by an unforeseen change in a Company's Dividend Policy, stating he could deal with it as it could help his tax situation from the sale of a personal business.

CUSTOMER ALLEGED THAT THE REGISTERED REPRESENTATIVE DID NOT HANDLE ACCOUNT APPROPRIATELY AND CUSTOMER LOST MONEY. IN ADDITION, CLIENT HAD TAX PENALTY FROM DISTRIBUTION FROM IRA. Clients were customers of the Registered Representative at the firm from August 2012 until February 2013, the time frame of the alleged activity.

$5,000.00

$37,500.00

CLIENT ALLEGES THAT THE REGISTERED REPRESENTATIVE MISHANDLED THE ACCOUNT AND THE ACCOUNT VALUE WENT DOWN. THE FIRM REVIEWED THE CLIENTS ALLEGATIONS AND FOUND THAT THE REGISTERED REPRESENTATIVE HANDLED THE ACCOUNT APPROPRIATELY AND HAD INVESTED THE CLIENT WITHIN THEIR STATED INVESTMENT OBJECTIVES. THE CLIENT DID TAKE OUT EARLY DISTRIBUTIONS FROM HIS IRA. THE SIGNED IRA DISTRIBUTION FORM WHICH WENT TO OUR CLEARING FIRM INDICATED A PREMATURE DISTRIBUTION AND NOT A 72T DISTRIBUTION. THE REGISTERED REPRESENTATIVE DID NOT CATCH THAT ERROR SO THE FIRM IS WILLING TO REIMBURSE THE CLIENT FOR THE PENALTY THAT THEY INCURRED.

CLIENT EMAILED THE REGISTERED REPRESENTATIVE AND ASKED WHY ACCOUNT(S)ARE DOWN IN VALUE.

$18,000.00

CLIENT EMAILED THE REGISTERED REPRESENTATIVE AND ASKED WHY ACCOUNT(S) WERE DOWN IN VALUE. THE FIRM INVESTIGATED AND DID NOT FIND THAT THE REGISTERED REPRESENTATIVE HANDLED THE CLIENTS ACCOUNTS IMPROPERLY. THE FIRM BELIEVES THE REGISTERED REPRESENTATIVE MADE SUITABLE RECOMMENDATIONS IN LIGHT OF THE CLIENTS STATED INVESTMENT OBJECTIVES AND RISK TOLERANCE AND RESPONDED AS SUCH TO THE CLIENT.

CLIENT CLAIMS BROKER CHARGED HER MORE FEES THEN WERE DISCUSSED

$10,000.00

$10,000.00

CLIENT CLAIMS BROKER CHARGED HER MORE FEES THEN WERE DISCUSSED. THERE WAS NO WRITTEN AGREEMENT IN PLACE BETWEEN CLIENT AND MR. ARNOLD. THE FIRM BELIEVES MR. ARNOLD DID NOTHING WRONG BUT WISHED TO ACCOMODATE THE CLIENT.

UNAUTHORIZED EXCESSIVE TRADING

$260,000.00

$169,000.00

CUSTOMER ALLEGES THAT HER ACCT WAS MISMANANGED AND SHE LOST MONEY FROM 06/00 TO 10/01 WHEN SHE LIQUIDATED HER ACCT FOLLOWING 9/11/01 MARKET CLOSING.CUST. SETUP AN SPECULATIVE TRADING ACCT ON 01/04/00, CUST. & HER CPA RECD ALL CONFIRMATIONS & MTHLY STATEMENTS. CUST HAD 20YRS INVESTMENTS EXPERIENCE. DOLLARS INVESTED REPRESENTED LESS AGGRESSIVE, THAN 3% OF STATED LIQUID NET WORTH. CUSTOMER HAD PRIOR EXPERIENCE INVESTING IN SMALL COMPANY STOCKS & HAD PREVIOUSLY LOST MONEY WITH A FORMER BROKER.

$50,000.00

$9,000.00

ILLINOIS SECURITIES DEPARTMENT

RESPONDENT'S SALESPERSON REGISTRATION IN ILLINOIS IS SUBJECT TO REVOCATION PURSUANT TO A NATIONAL ASSOCIATION OF SECURITIES DEALERS REGULATIONS, INC. ACCEPTED LETTER OF ACCEPTANCE, WAIVER AND CONSENT, FILE NO. C0400003.

Consent

Monetary/Fine

$500.00

WITHRAW HIS REGISTRATION AS A SALESPERSON IN ILLINOIS

RESPONDENT SHALL CAUSE TO HAVE HIS REGISTRATION AS A SALESPEROSN IN ILLINOIS WITHDRAWN WITHIN 3 DAYS FROM ENTRY OF THIS CONSENT ORDER. RESPONDENT WILL NOT REAPPLY FOR REGISTRATION FOR A PERIOD OF 2 YEARS FROM ENTRY OF THIS CONSENT ORDER. RESPONDENT SHALL PAY A FINE IN THE AMOUNT OF $500, FOR COST OF INVESTIGATION.

NATIONAL ASSOCIATION OF SECURITIES DEALERS, INC.

NASD RULES 2110- AND 2310 - RESPONDENT RECOMMENDED NUMEROUS PURCHASES AND SALES OF SECURITIES TO PUBLIC CUSTOMERS WITHOUT HAVING A REASONABLE BASIS FOR BELIEVING THAT SUCH RECOMMENDATIONS WERE SUITABLE FOR THE CUSTOMER IN VIEW OF THE CUSTOMERS' INVESTMENT OBJECTIVES AND FINANCIAL RESOURCES, FREQUENCY OF THE TRANSACTIONS, AND THE TYPE OF SECURITIES.

Acceptance, Waiver & Consent(AWC)

Monetary/Fine

$7,500.00

Suspension

WITHOUT ADMITTING OR DENYING THE ALLEGATIONS, ARNOLD CONSENTED TO THE DESCRIBED SANCTIONS AND TO THE ENTRY OF FINDINGS,THEREFORE, HE IS FINED $7,500, SUSPENDED FROM ASSOCIATION WITH ANY NASD MEMBER IN ANY PRINCIPAL CAPACITY FOR 30 DAYS. FOR ONE YEAR AFTER THE DATE OF THE AWC'S ACCEPTANCE, RESPONDENT MUST REFRAIN FROM ACCEPTING OR MAINTAINING EMPLOYMENT IN A SALES COPACITY WITH ANY NASD MEMBER FIRM UNLESS THE FIRM HAS FORMULATED SPECIAL SUPRVISORY PROCEDURES TO OVERSEE AND MONITOR HIS SALES PRACTICES WITH CUSTOMERS *** THE SUSPENSION WILL COMMENCE WITH THE OPENING OF BUSINESS ON MARCH 20, 2000, AND WILL CONCLUDE AT THE CLOSE OF BUSINESS ON APRIL 18, 2000.

SEVERAL LONG TERM CUSTOMERS WHO DURING THE COURSE OF A MARKET AND STOCK REVERSAL IN 1997, AND WHO'S ACCOUNT DECREASED IN VALUE BECAUSE OF SAME THOUGH ALL HAD KNOWN AND APPROVED ALL TRADES FILED COMPLAINTS THROUGH SAME ATTORNEY IN 1998. ALL CLAIMS WERE SETTLED.

BETWEEN 1996-4/1998, CUSTOMER THAT LOST MONEY INVESTMENT AND SOME TRADES WERE UNAUTHORIZED, CLAIMS LOST OF $20,000 RELATIVE TO INVESTING IN AN INDEX FUND. CUSTOMER EAS EMPLOYEE WHO ENTERED ALL TRADES HERSELF AND KNEW ALL INVESTMENTS.

$200,000.00

$10,000.00

LINSCO/PRIVATE LEDGER SETTLED WITH CLIENT. I BELIEVE THAT THE CASE WAS SETTLED FOR AN AMOUNT THAT WAS EITHER $10,000 OR MORE. CLIENT WAS KNOWEDGEABLE OF ALL TRADES, AND APPROVED ALL TRADES.

IN 1997 CUSTOMERS LOST MONEY ON STOCK TRADES. CLAIMS SOME TRADES WERE UNAUTHORIZED CLAIMS LOST MONEY RELATIVES TO S&P INDEX FUND.

$100,000.00

$10,000.00

LINSCO/ PRIVATE LEDGER SETTLED WITH THE CLIENT FOR AN AMOUNT THAT WAS EITHER $10,000 OR MORE. CLIENT ARE MILLIONAIRES, BUSINESS OWNERS, WHO WERE LONG TIME CLIENTS IN PREVIOUS YEARS USING THE SAME STRATEGY MADE MONEY. WHEN LOST MONEY IN 1997, THE CLIENTS COMPLAINED. CLIENTS KNEW AND APPROVED ALL TRADES. NEW ASKED FOR ANY RECISIONS.

UNAUTHORIZED TRADING AND SPECULATIVE UNSUITABLE TRADING CLAIMING LOSSES OF $32,000.

$32,000.00

$10,000.00

CUSTOMER IN OVER 10 YEARS OF ASSOCIATION WITH ME AND HAS NEVER BEFORE COMPLAINT. ALL TRADES WERE APPROVED. I BELEIVE IN GOOD FAITH THAT LINSCO / PRIVATE LEDGER CORP. SETTLED THIS MATTER FOR $10,000 OR MORE.

ALLEGATIONS CUSTOMER LOST MONEY ON INVESTMENTS, ALLEGED UNAUTHORIZED TRADES. CLAIMED LOSS OF $32,000.

$32,000.00

$10,000.00

PAYMENT OF $10,000. CUSTOMER WAS UPSET THAT VALUE OF ACCOUNT DECLINED IN VALUE FROM 7/96 TO THE TIME THE ACCOUNT TRANSFERRED TO ANOTHER FIRM. CUSTOMER STARTED WITH AGGRESSIVE, GROWTH STRATEGY THAT WAS SUCCESSFUL THROUGH 6/96 WHEN MARKET CORRECTION HURT SMALL COMPANY STOCKS IN PORTFOLIO. CLIENT ALSO WITHDREW MONEY AND CUSTOMER KNEW ALL TRADES; ACCOUNT WAS REVIEWED WITH CUSTOMER MONTHLY AS WELL. I BELIEVE IN GOOD FAITH THAT LINSCO / PRIVATE LEDGER CORP. SETTLED THIS MATTER FOR $10,000 OR MORE.

STATE OF MINNESOTA

CHARGED INVESTMENT ADIVSOR FEES TOTALING $1340 FOR 1 MONTH PRIOR TO HAVING BEEN REGISTERED AS AN INVESTMENT ADVISOR WHILE OPERATING AS A LICENSED SECURITIES BROKER.

Consent

Monetary/Fine

$1,340.00

PAID STATE OF MN $1340 AND COMPLIED WITH RULES TO BECOME INVESTMENT ADVISOR.

NOT PROVIDED