FINRA

FINRA BY-LAWS ARTICLE V, SECTION 2(C), FINRA RULES 1122, 2010, 8210, NASD RULES 2110, 2310: HOLZER MADE UNSUITABLE RECOMMENDATIONS TO CUSTOMERS THAT THEY INVEST IN THE OFFERING OF PRIVATE PLACEMENT SECURITIES WITHOUT HAVING A REASONABLE BASIS TO BELIEVE THAT THE SECURITY WAS SUITABLE FOR THE CUSTOMERS IN LIGHT OF THE CUSTOMERS' FINANCIAL NEEDS AND SITUATION. THE SPECULATIVE AND ILLIQUID INVESTMENT WAS UNSUITABLE IN LIGHT OF THE CUSTOMERS' NEED FOR LIQUIDITY, INCOME AND SAFETY OF PRINCIPAL. HOLZER'S RECOMMENDATIONS TO THE CUSTOMERS EXPOSED THE CUSTOMERS TO AN UNDUE RISK OF LOSS OF PRINCIPAL AND INCOME AND UNDULY CONCENTRATED THEIR ASSETS IN SPECULATIVE AND ILLIQUID SECURITIES. HOLZER'S MEMBER FIRM ENTERED INTO A SELLING AGREEMENT WITH THE ISSUER, AND, IN OR ABOUT THAT TIME, HOLZER, WITH KNOWLEDGE OF THE RISKS, BEGAN RECOMMENDING THE PRIVATE PLACEMENT SECURITIES TO CUSTOMERS. FOR EACH PRIVATE PLACEMENT SECURITIES TRANSACTION, THE ISSUER PAID THE FIRM A COMMISSION OF 8 PERCENT AND A DUE DILIGENCE FEE OF 1 PERCENT OF THE TOTAL INVESTMENT, OF WHICH THE FIRM PAID HOLZER 100 PERCENT OF THE COMMISSION. SUBSEQUENTLY, THE ISSUER CEASED PAYING DIVIDENDS ON ITS PREFERRED SHARES, INCLUDING THE PRIVATE SECURITIES RECOMMENDED BY HOLZER. LATER ON, THE U.S. DISTRICT COURT FOR THE NORTHERN DISTRICT OF TEXAS GRANTED A TEMPORARY RESTRAINING ORDER SOUGHT BY THE SECURITIES AND EXCHANGE COMMISSION AGAINST THE ISSUER'S PARENT ORGANIZATION AND ITS AFFILIATED ENTITIES, BASED ON ALLEGATIONS THAT THE ISSUER WAS COMMINGLING ASSETS AND INVESTOR FUNDS. THEN, THE ISSUER AND ITS RELATED ENTITIES FILED FOR BANKRUPTCY PROTECTION UNDER CHAPTER 11 OF THE U.S. BANKRUPTCY CODE. AS A RESULT, THE CUSTOMERS' INVESTMENTS MADE IN THE PRIVATE SECURITIES UPON HOLZER'S RECOMMENDATION BECAME WORTHLESS. HOLZER SUBMITTED OR CAUSED TO BE SUBMITTED TO HER MEMBER FIRM PRIVATE PLACEMENT SECURITIES DISCLOSURE DOCUMENTS FOR CUSTOMERS THAT HOLZER KNEW OR SHOULD HAVE KNOWN REFLECTED FALSE AND INACCURATE INFORMATION CONCERNING THE CUSTOMERS' NET WORTH AND LIQUID NET WORTH, OR LIQUID NET WORTH, AS WELL AS INVESTMENT OBJECTIVES UPON WHICH THE FIRM WOULD RELY IN REVIEWING THE PROPOSED TRANSACTIONS. BASED ON THE INFORMATION REFLECTED IN THE DISCLOSURE DOCUMENTS, THE FIRM REDUCED HOLZER'S RECOMMENDED INVESTMENT FOR A CUSTOMER OR APPROVED CUSTOMERS' INVESTMENTS IN THE PRIVATE PLACEMENT SECURITIES. HOLZER'S ALSO MADE UNSUITABLE RECOMMENDATION TO AN ELDERLY CUSTOMER FOR THE PURCHASE OF THE PRIVATE PLACEMENT SECURITIES THAT RESULTED IN UNDUE CONCENTRATION OF ILLIQUID INVESTMENTS IN HER PORTFOLIO. HOLZER RECEIVED A $98,000 COMMISSION ON THE SALE OF THE PRIVATE PLACEMENT SECURITIES. THE CALIFORNIA DEPARTMENT OF INSURANCE (DOI) INITIATED A REGULATORY ACTION AND ISSUED AN ACCUSATION IN A MATTER AGAINST HOLZER. HOLZER RECEIVED THE RELATED DOCUMENTS. IN ADDITION, THE DOI SERVED HOLZER WITH A FIRST AMENDED AND A SECOND AMENDED ACCUSATIONS. THE DOI ACTION, INCLUDING THE ACCUSATION AND THE AMENDED ACCUSATIONS, COMPRISED MATERIAL INFORMATION THAT HOLZER WILLFULLY FAILED TO DISCLOSE ON FORM U4 AT ANY TIME DURING HER ASSOCIATION WITH THE MEMBER FIRM, DURING THE EVENT. HOLZER FAILED TO DISCLOSE THIS MATERIAL INFORMATION ON HER INITIAL FORM U4 SUBMITTED TO ANOTHER MEMBER FIRM, AND FAILED TO DISCLOSE IT IN A TIMELY MANNER ON FORM U4 WHILE REGISTERED WITH THIS FIRM. FURTHERMORE, A CUSTOMER'S INVESTMENT-RELATED ARBITRATION AWARD AND JUDGMENT AGAINST HOLZER COMPRISED MATERIAL INFORMATION THAT HOLZER WILLFULLY FAILED TO DISCLOSE IN A TIMELY MANNER ON FORM U4 WHILE REGISTERED WITH THIS SECOND FIRM. IN ADDITION, DURING THE COURSE OF FINRA'S INVESTIGATION OF THE CONDUCT, HOLZER PROVIDED FALSE TESTIMONY DURING ON-THE-RECORD INTERVIEWS (OTRS). THE TESTIMONY WAS FALSE BECAUSE HOLZER HAD FAILED TO DISCLOSE THE DOI ACTION TO HER FIRM. HOLZER FURTHER FAILED TO DISCLOSE THE DOI ACTION TO ANOTHER FIRM AT OR ABOUT THE TIME SHE WAS HIRED OR IN A TIMELY MANNER UPON RECEIVING THE AMENDED ACCUSATIONS.

Decision & Order of Offer of Settlement

Bar (Permanent)

All Capacities

Indefinite

12/19/2013

WITHOUT ADMITTING OR DENYING THE ALLEGATIONS, HOLZER CONSENTED TO THE DESCRIBED SANCTIONS AND TO THE ENTRY OF FINDINGS THAT SHE MADE UNSUITABLE RECOMMENDATIONS IN VIOLATION OF NASD RULES 2110 AND 2310, OVERSTATED AND THEREBY FALSELY REFLECTED THE CUSTOMERS' NET WORTH IN DISCLOSURE DOCUMENTS SUBMITTED TO HER FIRM, AND WILLFULLY FAILED TO DISCLOSE ON FORM U4 AND WILLFULLY FAILED TO TIMELY UPDATE FORM U4 IN VIOLATION OF ARTICLE V, SECTION 2(C), AND FINRA RULES 1122 AND 2010, THEREFORE SHE IS BARRED FROM ASSOCIATION WITH ANY FINRA MEMBER IN ANY CAPACITY. THIS SETTLEMENT INCLUDES A FINDING THAT HOLZER WILLFULLY OMITTED TO STATE A MATERIAL FACT ON A FORM U4, AND THAT UNDER SECTION 3(A)(39)(F) OF THE SECURITIES EXCHANGE ACT OF 1934 AND ARTICLE III, SECTION 4 OF FINRA'S BY-LAWS, THIS OMISSION MAKES HER SUBJECT TO A STATUTORY DISQUALIFICATION WITH RESPECT TO ASSOCIATION WITH A MEMBER.

FINRA

RESPONDENT HOLZER 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

9/18/2013

PURSUANT TO ARTICLE VI, SECTION 3 OF FINRA BY-LAWS, AND FINRA RULE 9554, RESPONDENT HOLZER IS SUSPENDED SEPTEMBER 18, 2013 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.

STATE OF CALIFORNIA DEPARTMENT OF INSURANCE

ALLEGED FAILURE TO NOTIFY THE DEPARTMENT OF INSURANCE OF A CHANGE IN BACKGROUND INFORMATION.

Order

Suspension

INSURANCE RIGHTS AND REGISTRATIONS

20 DAYS

20 SUSPENSION WAS STAYED. RESTRICTED LICENSE AND REGISTRATION FOR ONE YEAR WAS IMPLEMENTED.

9/30/2012

9/30/2012

RESTRICTED LICENSE AND REGISTRATIONS FOR A PERIOD OF ONE YEAR.

negligence; breach of fiduciary duty; breach of contract; and violation of California Securities Law and Elder Abuse Law.

$864,529.00

FRAUD, FAILURE TO INFORM ACTUAL VALUE OF ACCOUNT, FALSE REPRESENTATION OF FEES AND UNSUITABLE INVESTMENT

$2,000,000.00

$1,405,393.00

ILLINOIS

RESPONDENT'S REGISTRATION AS A SALESPERSON IN THE STATE OF ILLINOIS IS SUBJECT TO REVOCATION PURSUANT TO SECTION 8.E(1)(J) OF THE ILLINOIS SECURITIES LAW.

Consent

RESPONDENT WILL PARTICIPATE IN A PROGRAM OF ENHANCED AND HEIGHTENED SUPERVISION REGARDING THE RECOMMENDATION MADE TO ILLINOIS CLIENTS CONCERNING THE PURCHASE OF VARIABLE ANNUNITIES FOR A PERIOD OF ONE YEAR. COSTS $1500.00 WERE ASSESSED (THIS IS NOT A FINE).

NASD

NASD RULE 2110 - RESPONDENT MADE NEGLIGENT MISREPRESENTATIONS TO CUSTOMERS REGARDING CERTAIN PRODUCTS FEATURES IN CONNECTION WITH THE PURCHASE AND SALE OF VARIABLE ANNUITIES.

Acceptance, Waiver & Consent(AWC)

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

Suspension

Undertaking

WITHOUT ADMITTING OR DENYING THE ALLEGATIONS, HOLZER CONSENTED TO THE DESCRIBED SANCTIONS AND TO THE ENTRY OF FINDINGS, THEREFORE SHE IS SUSPENDED FROM ASSOCIATION WITH ANY NASD MEMBER IN ANY CAPACITY FOR 21 DAYS AND FINED $100,000. HOLZER SHALL RECEIVE CREDIT IN THE AMOUNT OF $80,000 FOR PAYMENTS SHE PREVIOUSLY MADE IN PARTIAL RESTITUTION. SUSPENSION WILL COMMENCE AT THE OPENING OF BUSINESS ON JULY 18, 2005 AND WILL CONCLUDE ON AUGUST 7, 2005. ATTEND AND SATISFACTORILY COMPLETE 16 HOURS OF CONTINUING EDUCATION CONCERNING VARIABLE ANNUITIES AND PROVIDE NASD WITH EVIDENCE THAT SHE SATISFACTORILY COMPLETED THE PROGRAM WITHIN 10 DAYS OF COMPLETION. FINE PAID.

FRAUD, NEGLIGENCE,. BREACH OF FIDUCIARY, CHURNING, FAILURE TO SUPERVISE. SEEKING DAMAGES OF $400,000.00

$400,000.00

$70,000.00

THIS MATTER WAS COMPELLED TO ARBITRATION. THIS MATTER WAS SETTLED FOR $70,000- BAMBI HOLZER DID NOT CONTRIBUTE TOWARD THIS SETTLEMENT- SETTLEMENT WAS BETWEEN SHEARSON AND CLAIMENT. NOT PROVIDED