FINRA

FINRA RULES 2010, 8210, NASD RULES 2110, 2330, 3040: BALDWIN RAISED $2,940,000 FROM INVESTORS THROUGH THE SALE OF SECURITIES IN THE FORM OF LIMITED PARTNERSHIP INTERESTS, WITHOUT PROVIDING PRIOR WRITTEN NOTICE TO, OR OBTAINING WRITTEN APPROVAL FROM, HIS MEMBER FIRM. BALDWIN FORMED AN INVESTMENT CAPITAL FUND FOR WHICH HIS INVESTMENT ADVISER FIRM SERVED AS GENERAL PARTNER; BALDWIN FILED A FORM D FOR THE INVESTMENT CAPITAL FUND; THE INVESTMENT CAPITAL FUND WAS A REGULATION D RULE 506 OFFERING FOR $100,000,000. BALDWIN RAISED APPROXIMATELY $2,940,000 FROM HIS SALE OF LIMITED PARTNERSHIP INTERESTS IN THE FUND TO INVESTORS IN TRANSACTIONS. BALDWIN ENGAGED IN THE PRIVATE SECURITIES TRANSACTIONS WHILE AT HIS FIRM; BALDWIN DID NOT PROVIDE ANY NOTICE TO THE FIRM HIS PARTICIPATION IN THE PRIVATE SECURITIES TRANSACTIONS, NOR DID THE FIRM APPROVE HIS PARTICIPATION IN THESE TRANSACTIONS; IN ANNUAL ATTESTATIONS THAT BALDWIN COMPLETED HE ACKNOWLEDGED THE REQUIREMENT THAT HE NOTIFY THE FIRM PRIOR TO ENGAGING IN ANY PRIVATE SECURITIES TRANSACTION AWAY FROM THE FIRM. BALDWIN RECEIVED SELLING COMPENSATION, AS THAT TERM IS DEFINED IN NASD CONDUCT RULE 3040, AS A RESULT OF THE INVESTMENTS IN THE CAPITAL FUND; BALDWIN AND/OR HIS INVESTMENT ADVISER FIRM WERE REIMBURSED FOR VARIOUS EXPENSES AND BALDWIN RECEIVED FEES IN HIS CAPACITY AS GENERAL PARTNER OF THE LIMITED PARTNERSHIP. BALDWIN SOLICITED THESE INVESTMENTS PURSUANT TO A PRIVATE PLACEMENT MEMORANDUM THAT PROVIDED FOR THE PAYMENT OF MANAGEMENT FEES TO THE GENERAL PARTNER IN THE AMOUNT OF 1/4 OF 2% PER ANNUM OF EACH LIMITED PARTNER'S CAPITAL ACCOUNT BALANCE, CALCULATED AND PAID QUARTERLY IN ADVANCE. THERE WERE WIRE TRANSFERS FROM BALDWIN'S INVESTMENT ADVISER FIRM BANK ACCOUNT TO BALDWIN'S PERSONAL ACCOUNT AT A BANK TOTALING $156,925.53; IN ADDITION, THERE WERE WIRE TRANSFERS TOTALING $6,100 TO ANOTHER ACCOUNT IN BALDWIN'S NAME; MOREOVER, THERE WERE WIRE TRANSFERS IN THE AMOUNTS OF $35,000 AND $40,000, RESPECTIVELY, FROM THE INVESTMENT CAPITAL FUND'S BANK ACCOUNT TO BALDWIN'S PERSONAL INVESTMENT ACCOUNT AT HIS FIRM, A FINRA MEMBER FIRM; IN ADDITION, MONEY FROM THE FUND'S BANK ACCOUNT WAS USED TO PAY BALDWIN'S PERSONAL CREDIT CARD EXPENDITURES OF $48,231.32. BALDWIN BY RETAINING FUNDS THAT SHOULD HAVE BEEN REMITTED TO A CUSTOMER, BALDWIN MADE IMPROPER USE OF CUSTOMER'S FUNDS. BALDWIN'S CUSTOMER INSTRUCTED HIM TO LIQUIDATE ALL OF HIS SHARES FOR AN ENTITY AND TO SEND HIM A CHECK FOR THE PROCEEDS OF THE SALE; BALDWIN AGREED TO LIQUIDATE THE SHARES AND TO SEND THE CUSTOMER A CHECK FOR THE SALE PROCEEDS. THE CUSTOMER FOLLOWED UP WITH BALDWIN AFTER NOT HEARING FROM HIM OR RECEIVING A CHECK FOR THE SALE OF THE SHARES; BALDWIN TOLD THE CUSTOMER THAT HE WAS NOT YET ABLE TO LIQUIDATE THE SECURITIES AS THE FIRM WAS GIVING HIM A HARD TIME. INSTEAD OF FOLLOWING THE CUSTOMER'S INSTRUCTIONS AND LIQUIDATING THE SHARES, BALDWIN TRANSFERRED THE SHARES TO AN ACCOUNT HE CONTROLLED; HOWEVER, BALDWIN CAUSED THE CUSTOMER'S SHARES OF AN ENTITY'S STOCK TO BE TRANSFERRED INTO BALDWIN'S CAPITAL FUND ACCOUNT AT BALDWIN'S FIRM, A FINRA MEMBER FIRM, WITHOUT THE CUSTOMER'S KNOWLEDGE OR AUTHORIZATION; BY TRANSFERRING THE SHARES TO HIS OWN POSSESSION AND CONTROL INSTEAD OF SELLING THEM, BALDWIN MADE IMPROPER USE THEREOF. BALDWIN INFORMED HIS FIRM THAT THE CUSTOMER WAS ALREADY AN INVESTOR IN THE FUND AND WANTED TO ADD HIS OTHER SECURITIES TO HIS ALREADY EXISTING INVESTMENT; THEREFORE HIS FIRM APPROVED THE TRANSFER OF THE SECURITIES TO THE FUND'S ACCOUNT. BALDWIN SUBSEQUENTLY INFORMED THE CUSTOMER THAT HE HAD LIQUIDATED THE SECURITIES, RECEIVING $366,000 FOR THE SALE; WHEN THE CUSTOMER REQUESTED THE SALE PROCEEDS, BALDWIN TOLD HIM HE HAD INVESTED THE CUSTOMER'S MONIES IN THE CAPITAL FUND AND THAT HE COULD NOT DISBURSE FUNDS AT THAT TIME BECAUSE THE FUNDS WERE COMMINGLED WITH OTHER INVESTORS' MONIES. AFTER THE CUSTOMER EXPRESSED HIS DISSATISFACTION AND NEED FOR FUNDS, BALDWIN SENT HIM $50,000; (CONT. IN COMMENT SECTION)

Decision

Bar (Permanent)

All Capacities

12/5/2011

Restitution

$273,656.29

OTHER THAN THESE FUNDS, THE CUSTOMER NEVER RECEIVED THE PROCEEDS OF THE SALE OF HIS SECURITIES. WHEN BALDWIN CAUSED THE SALE OF AN ENTITY'S SHARES FROM THE CAPITAL FUND ACCOUNT THAT HE CONTROLLED, BALDWIN RETAINED THE PROCEEDS IN THAT ACCOUNT AND FAILED TO REMIT ANY FURTHER PORTION THEREOF TO THE CUSTOMER. BALDWIN FAILED TO RESPOND TO FINRA REQUESTS FOR DOCUMENTS AND INFORMATION AND TO APPEAR FOR FINRA ON-THE-RECORD TESTIMONY. DEFAULT DECISION RENDERED NOVEMBER 7, 2011 WHEREIN BALDWIN WAS ORDERED TO PAY RESTITUTION IN THE AMOUNT OF $273,656.29, PLUS INTEREST, TO A CUSTOMER AND BARRED FROM ASSOCIATION WITH ANY FINRA MEMBER IN ANY CAPACITY FOR ENGAGING IN PRIVATE SECURITIES TRANSACTIONS WITHOUT PROVIDING HIS MEMBER FIRM PRIOR WRITTEN NOTICE; IMPROPERLY USING CUSTOMER SECURITIES AND FUNDS; FAILING TO RESPOND TO FINRA REQUESTS FOR INFORMATION AND TESTIMONY. DECISION BECAME FINAL DECEMBER 5, 2011.