Michigan

In accordance with section 412(6) of the Securities Act, MCL 451.2412(6), the INVESTMENT ADVISER REPRESENTATIVE REGISTRATION OF ANTHONY G. MANAIA IS SUMMARILY SUSPENDED pending the final determination of the administrative proceedings.

Consent

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

$5,000.00

Administrative Consent Agreement and Order

Michigan

1. Respondent Anthony G. Manaia failed to promptly update his Form U4 investment adviser representative registration application to reflect a judgment or lien, contrary to section 406(2) of the Securities Act, MCL 451.2406(2). Manaia became subject to a judgment or lien on or around November 7, 2014, acknowledged the existence of the judgment or lien in a letter dated December 1, 2014, and then failed to disclose the judgment or lien on his Form U4 until April 8, 2016. 2.Respondent Anthony G. Manaia filed false or misleading information with the Bureau, in violation of section 505 of the Securities Act, MCL 451.2505, by engaging in the following activities: a.Respondent Anthony G. submitted a required balance sheet with required quarterly reports that did not disclose an unsatisfied judgment or lien. The judgment or lien has existed since in or around November 2014; however, the most recent quarterly balance sheet filed in or around January 2016 did not disclose the unsatisfied judgment or lien. b.Respondent Anthony G. Manaia submitted correspondence, through counsel, which identified that Respondent had not been aware of the judgment or lien until April of 2016, when in fact, Respondent had submitted correspondence to the court that issued the order in or around December 2014 that acknowledged the existence of the judgment, even if Respondent disputed the judgment's validity. c.Respondent Anthony G. Manaia represented in a January 2016 quarterly report that his Form U4 investment adviser representative registration was accurate and current, which it was not, as is discussed in paragraph I.B.4 and I.B.8, herein.

Consent

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

$5,000.00

Administrative Consent Agreement and Order

Michigan

The Administrator intends TO REVOKE THE INVESTMENT ADVISER REPRESENTATIVE REGISTRATION OF ANTHONY G. MANAIA under section 412(2) of the Securities Act, MCL 451.2412(2), because he is subject to a cease and desist order and because he engaged in dishonest and unethical behaviors in the securities industry, which support the revocation of his investment adviser representative registration under the above-cited provisions of the Michigan Uniform Securities Act (2002), 2008 PA 551, MCL 451.2101 et seq.

Consent

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

$5,000.00

Administrative Consent Agreement and Order

CLAIMANT ALLEGES BREACH OF FIDUCIARY DUTY; NEGLIGENCE AND GROSS NEGLIGENCE; MALPRACTICE; PROMISSORY ESTOPPEL; NON-SUITABLE INVESTMENTS; COMMON LAW FRAUD, BREACH OF MICHIGAN SECURITIES LAW, AND BREACH OF CONTRACT. CLAIMANT ALLEGES THAT MR. MANAIA REPEATEDLY RECOMMENDED AND PURCHASED UNSUITABLE INVESTMENT PRODUCTS FOR THE CLAIMANT'S ACCOUNTS INCLUDING THE FOLLOWING PRIVATE INVESTMENT PRODUCTS: MAMMOTH HORIZON; MEDICAL CAPITAL FUNDING V SERIES 1; AND MAMMOTH DESTINY. CLAIMANT FURTHER ALLEGES CONCEALMENT AND MISREPRESENTATION OF THE RISKS ASSOCIATED WITH THESE INVESTMENTS BEYOND THE RISK TOLERANCE OF THE CLAIMANT AND THAT THE CLAIMANT DID NOT QUALIFY FOR THESE INVESTMENTS UNDER THE ISSUER'S GUIDELINES AND BY LAW.

$350,000.00

$40,000.00

[CUSTOMERS] WERE CLIENTS OF MINE FOR OVER A DECADE. [CUSTOMER] WAS ONE OF MANY CHRYSLER EXECUTIVE CLIENTS THAT I WORKED WITH. [CUSTOMER] WAS VERY ANALYTICAL AND PREFERRED HIGHER RISK INVESTMENTS. HE HAD BEEN MANAGING HIS OWN MONEY PRIOR TO MY INVOLVEMENT AND ADMITTEDLY SAID HE DID A VERY POOR JOB OF IT. IN FACT, OVER THE DECADE HE THANKED ME PROFUSELY AND SENT MANY, MANY OTHER CLIENTS TO ME AS A RESULT. HE TRACKED HIS PERSONAL PORTFOLIO'S PERFORMANCE AND HIS 401K WHICH I ASSISTED WITH, AND IT WAS ALWAYS IN THE 14-16% ANNUAL RANGE, WHICH NEEDLESS TO SAY, QUITE PLEASED HIM. WHEN THINGS GOT DIFFICULT IN THE AMERICAN ECONOMY IN 2007-2009 DUE TO THE REAL ESTATE BUBBLE BURSTING, [CUSTOMER] SOUGHT OUT ALTERNATIVE INVESTMENTS. THESE INCLUDED REAL ESTATE IN AZ FROM A COLLEAGUE OF HIS, MEDICAL CAPITAL FIXED RATE NOTES AND MAMMOTH, A NATURAL GAS EXPLORATION LP THAT INVERVEST INTRODUCED HIM TO. [CUSTOMER] LOVED THE IDEA OF A FIXED RATE OF RETURN ON MED CAP AND UNDERSTOOD IT AS HIS WIFE WORKED IN MANAGEMENT AT SEVERAL LOCAL HOSPITALS. THE NATURAL GAS OPPORTUNITY IN MAMMOTH ALSO APPEALED TO HIM FOR SEVERAL REASONS. ONE IT BEING A CLEANER FUEL THAN OIL. TWO, THE LOW PRICE OF NATURAL GAS MADE IT MORE ECONOMICAL THAN OIL. AS A "CAR GUY", [CUSTOMER] BELIEVED THE FUTURE OF THE AUTOMOTIVE INDUSTRY WAS TO CONVERT CARS TO RUN ON NATURAL GAS VS. OIL BASED PETROLEUM. AND LAST, BUT NOT LEAST, MAMMOTH OFFERED A SIGNIFICANT TAX DEDUCTION FOR INVESTORS IN THE FIRST YEAR OF OWNERSHIP. THIS, IN MY OPINION WAS THE MOTIVATION [CUSTOMER] HAD TO MAKE A SECOND, UNSOLICITED INVESTMENT IN MAMMOTH. HE RAVED ABOUT IT AND ALSO REFERRED OTHER CLIENTS TO MY FIRM TO INQUIRE ABOUT IT. SOMETIME EARLY IN 2010 SURPRISINGLY [CUSTOMER] CONTACTED MY B/D INTERVEST AND ASKED FOR HIS ACCOUNTS TO BE REMOVED FROM MY CONTROL AND PLACED WITH MY THEN CURRENT A/A [THIRD PARTY]. [THIRD PARTY] WAS A NEWBIE AND THIS CAME AS QUITE A SHOCK. I ADVISED BOTH HIM AND INVERVEST AGAINST IT. HIS REQUEST WAS HONORED. [THIRD PARTY] DID NOT LAST LONG AND IS NOW BANNED BY F?INRA FOR THE REST OF HIS LIFE. I SUSPECT SOMETHING HAPPENED WITH [CUSTOMER] AND [THIRD PARTY] WHICH CONTRIBUTED TO THIS UNFOUNDED COMPLAINT. 2010 WAS THE LAST TIME I HAVE SPOKEN WITH [CUSTOMER] AND HIS FRIVOLOUS COMPLAINT COMING 6 YEARS AFTER THESE INVESTMENTS WERE MADE COMES AS QUITE A SHOCK. ?WITH RESPECT TO HIS ALLEGATION THAT THESE WERE UNSUITABLE INVESTMENTS, THE [CUSTOMERS'] NET WORTH EXCEEDED $2 MILLION WHEN THESE INVESTMENTS WERE ADDED TO HIS PORTFOLIO. THE $150,000 IN TOTAL INVESTMENTS RECOMMENDED (EXCLUDING THE ADDITIONAL NON-SOLICITED ADDITION TO MAMMOTH REPRESENTED ONLY A SMALL PORTION OF THE INVESTABLE ASSETS.

[CUSTOMER] PURCHASED ON 1/3/2008 $50,000 OF MAMMOTH HORIZON, $100,000 ON 4/28/2008 MEDICAL CAPITAL FUNDING V SERIES ONE, $50,000 ON 12/22/2009 MAMMOTH DESTINY. CUSTOMER ALLEGES THAT BROKER CONCEALED AND MISREPRESENTATED THE RISK ASSOCIATED WITH THESE INVESTMENTS

$350,000.00

$40,000.00

[CUSTOMERS] WERE CLIENTS OF MINE FOR OVER A DECADE. [CUSTOMER] WAS ONE OF MANY CHRYSLER EXECUTIVE CLIENTS THAT I WORKED WITH. [CUSTOMER] WAS VERY ANALYTICAL AND PREFERRED HIGHER RISK INVESTMENTS. HE HAD BEEN MANAGING HIS OWN MONEY PRIOR TO MY INVOLVEMENT AND ADMITTEDLY SAID HE DID A VERY POOR JOB OF IT. IN FACT, OVER THE DECADE HE THANKED ME PROFUSELY AND SENT MANY, MANY OTHER CLIENTS TO ME AS A RESULT. HE TRACKED HIS PERSONAL PORTFOLIO'S PERFORMANCE AND HIS 401K WHICH I ASSISTED WITH, AND IT WAS ALWAYS IN THE 14-16% ANNUAL RANGE, WHICH NEEDLESS TO SAY, QUITE PLEASED HIM. WHEN THINGS GOT DIFFICULT IN THE AMERICAN ECONOMY IN 2007-2009 DUE TO THE REAL ESTATE BUBBLE BURSTING, [CUSTOMER] SOUGHT OUT ALTERNATIVE INVESTMENTS. THESE INCLUDED REAL ESTATE IN AZ FROM A COLLEAGUE OF HIS, MEDICAL CAPITAL FIXED RATE NOTES AND MAMMOTH, A NATURAL GAS EXPLORATION LP THAT INVERVEST INTRODUCED HIM TO. [CUSTOMER] LOVED THE IDEA OF A FIXED RATE OF RETURN ON MED CAP AND UNDERSTOOD IT AS HIS WIFE WORKED IN MANAGEMENT AT SEVERAL LOCAL HOSPITALS. THE NATURAL GAS OPPORTUNITY IN MAMMOTH ALSO APPEALED TO HIM FOR SEVERAL REASONS. ONE IT BEING A CLEANER FUEL THAN OIL. TWO, THE LOW PRICE OF NAT?URAL? GAS MADE IT MORE ECONOMICAL THAN OIL. AS A "CAR GUY"?,? [CUSTOMER] BELIEVED THE FUTURE OF THE AUTOMOTIVE INDUSTRY WAS TO CONVERT CARS TO RUN ON NAT?URAL? GAS VS. OIL BASED PETROLEUM. AND LAST, BUT NOT LEAST, MAMMOTH OFFERED A SIGNIFICANT TAX DEDUCTION FOR INVESTORS IN THE FIRST YEAR OF OWNERSHIP. THIS, IN MY OPINION WAS THE MOTIVATION [CUSTOMER] HAD TO MAKE A SECOND, UNSOLICITED INVESTMENT IN MAMMOTH. HE RAVED ABOUT IT AND ALSO REFERRED OTHER CLIENTS TO MY FIRM TO INQUIRE ABOUT IT. SOMETIME EARLY IN 2010 SURPRISINGLY [CUSTOMER] CONTACTED MY B/D INTERVEST AND ASKED FOR HIS ACCOUNTS TO BE REMOVED FROM MY CONTROL AND PLACED WITH MY THEN CURRENT A/A [THIRD PARTY]. [THIRD PARTY] WAS A NEWBIE AND THIS CAME AS QUITE A SHOCK. I ADVISED BOTH HIM AND INVERVEST AGAINST IT. HIS REQUEST WAS HONORED. [THIRD PARTY] DID NOT LAST LONG AND IS NOW BANNED BY F?INRA FOR THE REST OF HIS LIFE. I SUSPECT SOMETHING HAPPENED WITH [CUSTOMER] AND [THIRD PARTY] WHICH CONTRIBUTED TO THIS UNFOUNDED COMPLAINT. 2010 WAS THE LAST TIME I HAVE SPOKEN WITH [CUSTOMER] AND HIS FRIVOLOUS COMPLAINT COMING 6 YEARS AFTER THESE INVESTMENTS WERE MADE COMES AS QUITE A SHOCK. ?WITH RESPECT TO HIS ALLEGATION THAT THESE WERE UNSUITABLE INVESTMENTS, THE [CUSTOMERS'] NET WORTH EXCEEDED $2 MILLION WHEN THESE INVESTMENTS WERE ADDED TO HIS PORTFOLIO. THE $150,000 IN TOTAL INVESTMENTS RECOMMENDED (EXCLUDING THE ADDITIONAL NON-SOLICITED ADDITION TO MAMMOTH REPRESENTED ONLY A SMALL PORTION OF THE INVESTABLE ASSETS.

MICHIGAN CORPORATIONS, SECURITIES & COMMERCIAL LICENSING

THE APPLICANT CONDUCTED BUSINESS IN THE STATE OF MICHIGAN AS AN INVESTMENT ADVISOR REPRESENTATIVE WITHOUT HAVING A CURRENT REGISTRATION OR AN EXEMPTION FROM REGISTRATION.

STIPULATION & ORDER APPROVING CONDITIONAL REGISTRATION

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

$5,000.00

REQUIRED REPORTING & OVERSIGHT REQUIREMENTS FOR AT LEAST TWO YEARS.

FINRA

SEC SECTION 10(B) OF THE SECURITIES EXCHANGE ACT OF 1934, SEC RULE 10B-5, FINRA RULE 2010, NASD RULES 2110, 2120: ANTHONY GERARD MANAIA MADE MATERIAL MISREPRESENTATIONS AND OMITTED FACTS TO CUSTOMERS IN CONNECTION WITH INVESTMENTS IN PRIVATE PLACEMENTS. MANAIA ALSO NEGLIGENTLY OMITTED TO DISCLOSE TO THE INVESTORS MATERIAL INFORMATION NECESSARY FOR CERTAIN AFFIRMATIVE REPRESENTATIONS NOT TO BE MISLEADING. AFTER THE FIRM SUSPENDED THE SALES OF ONE PRIVATE PLACEMENT FOR DELINQUENT PRINCIPAL PAYMENTS, IT DECIDED THAT TO LET CUSTOMERS INVEST, THEY WOULD HAVE TO SIGN HOLD-HARMLESS LETTERS THAT WOULD HOLD THE FIRM, MANAIA AND HIS INVESTOR ADVISER HARMLESS FOR ANY LOSS INCURRED IN INVESTING IN THE PRIVATE PLACEMENT. MANAIA INSTRUCTED HIS ASSISTANT TO MAIL THE HOLD-HARMLESS LETTERS TO THE FIRM'S CUSTOMERS WHO HAD SIGNED SUBSCRIPTION AGREEMENTS. CERTAIN OF THE CUSTOMERS WHO RECEIVED MANAIA'S COVER LETTER HAD ALREADY COMPLETED A SUBSCRIPTION AGREEMENT FOR THE PURCHASE OF THE OFFERING NOTES, AND THE HOLD-HARMLESS LETTER CLEARLY PROVIDED THAT NOTES COULD NOT BE PURCHASED THROUGH MANAIA'S FIRM UNLESS THE INVESTORS SIGNED AND RETURNED THE LETTER. AS A RESULT, THE CUSTOMERS WERE REQUIRED TO REAFFIRM THEIR INVESTMENT DECISION OR DECLINE TO INVEST IN LIGHT OF THE DISCLOSURE IN THE HOLD-HARMLESS LETTER THAT PREVIOUS OFFERINGS BY THE ISSUER WERE IN DEFAULT. BY ATTACHING THE COVER LETTER TO THE HOLD-HARMLESS LETTER, MANAIA DEMONSTRATED HIS INTENTION THAT THE CUSTOMERS CONSIDER THE CONTENT OF THE COVER LETTER IN CONNECTION WITH THEIR DECISIONS TO PROCEED WITH OR CANCEL THEIR SUBSCRIPTIONS. MANAIA MADE VARIOUS MISLEADING REPRESENTATIONS ABOUT THE ISSUER AND THE OFFERING IN THE COVER LETTER, WHICH HE HAD RECEIVED FROM THE ISSUER. MANAIA MADE MATERIAL MISREPRESENTATIONS AND OMITTED TO DISCLOSE MATERIAL INFORMATION IN ELECTRONIC COMMUNICATIONS SENT TO INDIVIDUALS WHO INVESTED, OR WERE SOLICITED TO INVEST, IN PRIVATE PLACEMENTS BY CHARACTERIZING THE INVESTMENT AS SAFE. AT THE TIME MANAIA MADE THE REPRESENTATIONS, HE KNEW, OR SHOULD HAVE KNOWN, THAT THEY WERE INACCURATE OR WERE MISLEADING WITHOUT ADDITIONAL DISCLOSURES.

Decision

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

$54,472.00

Monetary Penalty other than Fines

$6,427.65

Suspension

ANY CAPACITY

30 BUSINESS DAYS

8/19/2013

9/30/2013

HEARING PANEL DECISION RENDERED JUNE 28, 2013 WHEREIN MANAIA IS FINED $54,472, ORDERED TO PAY THE COSTS IN THE AMOUNT $6,427.65, INCLUDING AN ADMINISTRATIVE FEE OF $750 AND THE COST OF THE TRANSCRIPT, AND SUSPENDED FROM ASSOCIATION WITH ANY FINRA MEMBER IN ANY CAPACITY FOR 30 BUSINESS DAYS. THE SANCTIONS ARE FOR MAKING NEGLIGENT MISREPRESENTATIONS AND OMISSIONS OF MATERIAL FACT IN A COVER LETTER AND IN EMAIL COMMUNICATIONS TO CUSTOMERS, IN VIOLATION OF NASD RULE 2110 AND FINRA RULE 2010. THE HEARING PANEL DECISION RENDERED THAT MANAIA DID NOT FRAUDULENTLY OR RECKLESSLY MAKE MISREPRESENTATIONS OR OMISSIONS OF MATERIAL FACT, AS ALLEGED IN THE COMPLAINT, THEREFORE THE HEARING PANEL DISMISSED THE CAUSE OF ACTION ALLEGING THAT HE VIOLATED SECTION 10(B) OF THE SECURITIES EXCHANGE ACT OF 1934 AND RULE 10B-5, AND NASD RULES 2120 AND 2110. THE FINE AND COSTS SHALL BE DUE AND PAYABLE ON MANAIA'S RETURN TO THE SECURITIES INDUSTRY. THE SUSPENSION IS IN EFFECT FROM AUGUST 19, 2013, THROUGH SEPTEMBER 30, 2013. DECISION BECAME FINAL AUGUST 15, 2013.

FINRA HAS TAKEN THE POSITION THAT ALL REGISTERED REPRESENTATIVES AND BROKER-DEALERS WHO WERE INVOLVED IN THE SALE OF MEDICAL CAPITAL VI DID SOMETHING WRONG. FINRA SUGGEST THAT SOMEHOW THE REGISTERED REPRESENTATIVE SHOULD HAVE KNOWN THAT THE COMPANY WAS RUNNING A PONZI SCHEME, DESPITE THE SEC INVESTIGATING THEM A YEAR EARLIER AND FINDING NOTHING WRONG. CLIENTS WERE ADVISED BY MED CAP THAT THE COMPANY WAS EXPERIENCING CASH FLOW ISSUES DUE TO THE FREEZING OF CREDIT MARKETS DURING THE GREAT RECESSION OF 2007-2009. I SHARED THIS INFORMATION WITH CLIENTS AND FURTHER SUGGESTED THAT IF A CLIENT WANTED TO INVEST, THEY WOULD NEED TO SIGN A HOLD HARMLESS LETTER (APPROVED BY INTERVEST) INDICATING THAT THEY WERE AWARE OF THE ISSUES AND STILL CHOSE TO MAKE THE INVESTMENT. FINRA HAS TAKEN THE POSITION THAT WE SHOULD HAVE DONE MORE. MORE THAN EVEN THE REGULATORS COULD DO. SOMEHOW WE SHOULD HAVE KNOWN THINGS THAT WERE UNKNOWABLE AT THE TIME, AND THEREBY PREVENTED OUR CLIENTS FROM MAKING AN INVESTMENT OF THEIR CHOICE. WE HAVE DEFENDED VIGOROUSLY AGAINST THESE CHARGES. I COMPLETELY DISAGREE WITH THE FINRA ENFORCEMENT POSITION. THERE WAS NO WAY TO KNOW THAT MED CAP WAS RUNNING A PONZI SCHEME. EVEN THE SEC WHO INVESTIGATED THEM AND WERE IN THEIR OFFICES A YEAR BEFORE, COULD FIND NOTHING WRONG. IT IS COMPLETELY UNREALISTIC AND UNFAIR TO PUNISH THE BROKERS FOR A FRAUD THAT WENT UNDETECTED BY EVERYONE FOR 15 YEARS.

STATE OF MICHIGAN, OFIR

RESPONDENT ANTHONY G. MANAIA, ATTEMPTED TO DIRECT SECURITY TRANSACTIONS ON BEHALF OF CLIENTS IN AUGUST, 2010, WHILE NOT AFFILIATED WITH A BROKER-DEALER.

Stipulation and Consent

Cease and Desist

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

$2,500.00

I ENTERED INTO A STIPULATION AND CONSENT WITH THE STATE OF MICHIGAN OFFICE OF FINANCIAL AND INSURANCE REGULATION TO CLOSE THIS MATTER AS A STIPULATION TO THE APPROVAL OF MY FIRM AND ADVISORY REPRESENTATIVE REGISTRATIONS. BEFORE RESIGNED FROM INTERVEST BEFORE I RESIGNED FROM INTERVEST INTERNATIONAL EQUITIES (IIEC) I CALLED MY CUSTODIAN; PERSHING LLC AND ASKED THEM HOW TO HANDLE ANY CLIENT REQUEST WHILE I RELOCATED MY BUSINESS TO ANOTHER FIRM. THE DIRECTED ME TO THEIR WEB PAGE: HTTP://WWW.PERSHING.COM/CUSTOMER_SUPPORT.HTML WHICH INSTRUCTED TO FAX THEM ANY CLIENT REQUESTS. THUS, WHEN A FEW CLIENTS HAD CHECK REQUESTS I FOLLOWED PERSHING'S SPECIFIC DIRECTIONS AND FAXED TO THEM MY CLIENTS REQUESTS. IIEC, WHO WAS ALSO SEEKING TO SOLICIT AND RETAIN MY CLIENTS AND DISRUPT MY PLANS TO START MY NEW FIRM, CONTACTED THE STATE TO SUGGEST I WAS PROVIDING ADVISORY SERVICES WITHOUT LICENSING. I ENTERED INTO A STIPULATION AND CONSENT WITH THE STATE AS A CONDITION OF APPROVAL OF MY NEW FIRM.

VIOLATIONS OF FINRA SUITABILITY RULE(S), NEGLIGENCE, BREACH OF FIDUCIARY DUTY, VIOLATION OF THE MICHIGAN UNIFORM SECURITIES ACT, AND FRAUD

$500,000.00

BACKGROUND INFORMATION: THE [CUSTOMERS] ARE WEALTHY, SOPHISTICATED AND EXPERIENCED INVESTORS. [CUSTOMER] AS A V.P. AT CHRYSLER WAS WELL VERSED IN FINANCIAL MATTERS. WE HAD QUARTERLY MEETINGS WHERE WE DISCUSSED THE FINANCIAL MARKETS, HIS STOCK OPTIONS, ECONOMICS, AND INVESTMENTS. DURING THIS PERIOD OF TIME, OUR MARKETS WERE FALLING DUE TO THE BURSTING OF THE HOUSING BUBBLE. [CUSTOMER'S] EMPLOYER WENT BANKRUPT AND NEEDLESS TO SAY HE WAS VERY WORRIED ABOUT HIS INVESTMENTS AND PENSION. ALL INVESTMENT OPTIONS WERE ALWAYS PRESENTED TO THEM INCLUDING STOCKS, BONDS, MUTUAL FUNDS, ETF'S, COMMODITIES AND PRIVATE PLACEMENTS. AS ALWAYS, THEY TOOK THIS INFORMATION HOME TO DISCUSS WITH THEIR ACCOUNTANT AND ATTORNEY AND OTHER ADVISORS, AS THEY INDICATED, IN WRITING, TO ME. THE [CUSTOMER'S] ALSO SIGNED A SPECIAL "HOLD HARMLESS" LETTER (APPROVED BY INTERVEST) CONFIRMING THEIR KNOWLEDGE OF ISSUES WITH MEDICAL CAPITAL OFFERINGS AND THE RISKS. DURING THE EXTREMELY DIFFICULT YEARS OF 2007-2009 MORE OFTEN THAN NOT, THEY CHOSE MEDICAL CAPITAL FIXED RATE NOTES FOR 30% OF THEIR PORTFOLIO. THIS COMPANY OFFERED SHORT TERM NOTES WITH MONTHLY INTEREST, WHICH WERE REPRESENTED BY MEDICAL CAPITAL TO BE OVER-COLLATERALIZED BY MEDICAL RECEIVABLES. IN ADDITION, THE BANK OF NY AND WELLS FARGO WERE PUT IN PLACE AS TRUSTEES TO INSURE AGAINST FRAUDULENT ACTIVITIES. MORE THAN $1 BILLION OF NOTES HAD BEEN ISSUED AND REDEEMED ON TIME AND INTEREST PAYMENTS HAD NEVER BEEN MISSED. AFTER THE SEC STEPPED IN AND CLOSED MEDICAL CAPITAL, MR. MANAIA THEN LEARNED THAT THE COMPANY WAS RUNNING A PONZI SCHEME. OVER 20,000 NOTEHOLDERS WERE AFFECTED. A CLASS AND MASS ACTION SUITS HAVE BEEN FILED AGAINST THE BANK TRUSTEES AND IS ONGOING. THE [CUSTOMERS] CHOSE TO BLAME INTERVEST AND I FOR THIS AND FILED AN ARBITRATION. SETTLEMENT: ITEMS 11.A. AND 11.B. ARBITRATION AWARD TO CLAIMANTS INCLUDED $727,287.19 AGAINST INTERVEST. INTERVEST SETTLED FOR AN UNDISCLOSED AMOUNT. MR. MANAIA HAS AGREED TO CONTRIBUTE $15,000 TO CLAIMANT'S ATTORNEYS TO CONTRIBUTION TO LEGAL, EXPERT AND OTHER COSTS. MR. MANAIA HAS PAID 50% ($7,500) WITH THE REMAINING 50% DUE BY JULY 2014. IN ORDER TO COMPLY WITH STATE THE OF MICHIGAN'S REQUEST, MR. MANIA UPDATED THIS SECTION ON MAY 13, 2014 TO DISCLOSE THE ARBITRATION FROM INTERVEST INTERNATIONAL EQUITIES CORP. INTERVEST INTERNATIONAL EQUITIES CORP SEEKS INDEMNIFICATION FROM MR. MANAIA FOR THIS SETTLEMENT. MR. MANAIA DENIES AN RESPONSIBILITY.