FINRA

WILLFULLY VIOLATED SECTION 10(B) OF THE EXCHANGE ACT AND RULE 10B-5 THEREUNDER AND VIOLATED FINRA RULES 2010, 2020, NASD RULE 2110, 2310, AND INTERPRETATIVE MATERIAL-2310-2: BALCHANDANI EFFECTED UNAUTHORIZED TRADES IN CUSTOMERS' NON-DISCRETIONARY ACCOUNTS WITHOUT THE KNOWLEDGE, AUTHORIZATION, OR CONSENT OF THE CUSTOMERS OR ANY PERSONS WITH TRADING AUTHORITY OVER THE ACCOUNTS. BALCHANDANI WILLFULLY VIOLATED SECTION 10(B) OF THE EXCHANGE ACT AND RULE 10B-5 THEREUNDER WHEN HE CHURNED THE ACCOUNTS OF CUSTOMERS. BALCHANDANI CONTROLLED THE ACTIVITY IN THE ACCOUNTS OF THESE CUSTOMERS BY EXECUTING UNAUTHORIZED TRANSACTIONS IN THEIR ACCOUNTS. THE EXCESSIVE TRADING ACTIVITY IN THE ACCOUNTS OF THE CUSTOMERS, AS EVIDENCED BY THE HIGH ANNUALIZED TURNOVER RATES AND HIGH ANNUALIZED COST-TO-EQUITY RATIOS IN THE ACCOUNTS, WAS INCONSISTENT WITH THEIR RESPECTIVE FINANCIAL CIRCUMSTANCES AND/OR INVESTMENT OBJECTIVES. BALCHANDANI ACTED WITH SCIENTER. BALCHANDANI INTENTIONALLY OR AT LEAST RECKLESSLY HANDLED THE ACCOUNTS OF THE CUSTOMERS IN A MANNER IN WHICH HE PLACED HIS INTERESTS ABOVE HIS CUSTOMERS' INTERESTS. BALCHANDANI RECOMMENDED, THROUGH HIS UNAUTHORIZED TRANSACTIONS, PURCHASES AND SALES OF SECURITIES TO CUSTOMERS WITHOUT HAVING REASONABLE GROUNDS TO BELIEVE THAT HIS RECOMMENDATIONS WERE SUITABLE FOR THEM BASED ON THEIR DISCLOSED SECURITY HOLDINGS AND FINANCIAL SITUATION AND NEEDS. RATHER THAN TAILORING THE INVESTMENT STRATEGY IN THE NON-DISCRETIONARY UNIFORM TRANSFER TO MINORS ACT (UTMA) ACCOUNTS OF THE CUSTOMERS TO THEIR INVESTMENT OBJECTIVES AND FINANCIAL SITUATION AND NEEDS, BALCHANDANI IMPROPERLY TREATED THE ACCOUNTS AS IF THEY WERE SPECULATIVE TRADING ACCOUNTS. BALCHANDANI'S MEMBER FIRM IS LIABLE FOR THE UNAUTHORIZED TRADING, FRAUDULENT MISCONDUCT, AND THE UNSUITABLE INVESTMENT RECOMMENDATIONS MADE BY BALCHANDANI UNDER THE DOCTRINE OF RESPONDENT SUPERIOR AND AS A CONTROL PERSON UNDER SECTION 20(A) OF THE EXCHANGE ACT. BALCHANDANI EXCESSIVELY TRADED THE ACCOUNTS OF CUSTOMERS AND CONTROLLED THE ACTIVITY IN THE ACCOUNTS BY EXECUTING UNAUTHORIZED TRANSACTIONS IN THEIR ACCOUNTS. THE EXCESSIVE TRADING ACTIVITY IN THE ACCOUNTS OF CUSTOMERS, AS EVIDENCED BY THE HIGH ANNUALIZED TURNOVER RATES AND HIGH ANNUALIZED COST-TO-EQUITY RATIOS IN THE ACCOUNTS, WAS INCONSISTENT WITH THEIR RESPECTIVE FINANCIAL CIRCUMSTANCES AND/OR INVESTMENT OBJECTIVES. THE FIRM IS LIABLE FOR THE EXCESSIVE TRADING OF, AND QUANTITATIVELY UNSUITABLE INVESTMENT RECOMMENDATIONS MADE BY, BALCHANDANI UNDER THE DOCTRINE OF RESPONDEAT SUPERIOR AND AS A CONTROL PERSON UNDER SECTION 20(A) OF THE EXCHANGE ACT. THE FIRM, THROUGH BALCHANDANI AND OTHER REPRESENTATIVES, IMPROPERLY MADE A PRACTICE OF EFFECTING TRADES IN THE CASH ACCOUNT OF CUSTOMERS WHERE THE COST TO BUY THE SECURITIES WAS MET BY THE SALE OF THE SAME SECURITIES AND/OR ALLOWING CUSTOMERS TO MEET REGULATION T MARGIN CALLS BY LIQUIDATING THE SAME OR OTHER COMMITMENTS IN THE ACCOUNTS.

Decision & Order of Offer of Settlement

Bar (Permanent)

All Capacities

4/16/2014

BALCHANDANI WILLFULLY VIOLATED SECTION 10(B) OF THE SECURITIES EXCHANGE ACT OF 1934 AND RULE 10B-5 THEREUNDER.

WITHOUT ADMITTING OR DENYING THE ALLEGATIONS, BALCHANDANI CONSENTED TO THE SANCTION AND TO THE ENTRY OF FINDINGS THAT HE EFFECTED UNAUTHORIZED TRADES IN CUSTOMERS' NON-DISCRETIONARY ACCOUNTS. THE FINDINGS STATED THAT BALCHANDANI EXECUTED THE TRADES, WITHOUT THE KNOWLEDGE, AUTHORIZATION, OR CONSENT OF THE CUSTOMERS OR ANY PERSONS WITH TRADING AUTHORITY OVER THE ACCOUNTS. THE FINDINGS ALSO STATED THAT BALCHANDANI CHURNED THE ACCOUNTS OF CUSTOMERS. BALCHANDANI CONTROLLED THE ACTIVITY IN THE ACCOUNTS OF THE CUSTOMERS BY EXECUTING UNAUTHORIZED TRANSACTIONS IN THEIR ACCOUNTS. IT WAS EXCESSIVE TRADING ACTIVITY IN THE ACCOUNTS OF THE CUSTOMERS AND WAS INCONSISTENT WITH THEIR RESPECTIVE FINANCIAL CIRCUMSTANCES AND/OR INVESTMENT OBJECTIVES. BALCHANDANI ACTED WITH SCIENTER. SPECIFICALLY, BALCHANDANI HANDLED THE ACCOUNTS WITH THE INTENTION AND FOR THE PURPOSE OF GENERATING COMMISSIONS FOR HIMSELF AND HIS MEMBER FIRM, AND WITHOUT THE INTENTION OF SERVING HIS CUSTOMERS' INTERESTS. BY CHURNING THE ACCOUNTS, BALCHANDANI WILLFULLY VIOLATED SECTION 10(B) OF THE SECURITIES EXCHANGE ACT OF 1934 AND RULE 10B-5 THEREUNDER. THE FINDINGS ALSO INCLUDED THAT BALCHANDANI RECOMMENDED, THROUGH HIS UNAUTHORIZED TRANSACTIONS, PURCHASES AND SALES OF SECURITIES TO CUSTOMERS WITHOUT HAVING REASONABLE GROUNDS TO BELIEVE THAT HIS RECOMMENDATIONS WERE SUITABLE FOR THEM BASED ON THEIR DISCLOSED SECURITY HOLDINGS AND FINANCIAL SITUATION AND NEEDS. FINRA FOUND THAT BALCHANDANI EXCESSIVELY TRADED THE ACCOUNTS OF CUSTOMERS. BALCHANDANI CONTROLLED THE ACTIVITY IN THE ACCOUNTS OF THE CUSTOMERS BY EXECUTING UNAUTHORIZED TRANSACTIONS IN THEIR ACCOUNTS, AND IT WAS INCONSISTENT WITH THEIR RESPECTIVE FINANCIAL CIRCUMSTANCES AND/OR INVESTMENT OBJECTIVES. FINRA ALSO FOUND THAT BALCHANDANI IMPROPERLY MADE A PRACTICE OF EFFECTING TRADES IN THE CASH ACCOUNT OF CUSTOMERS WHERE THE COST TO BUY THE SECURITIES WAS MET BY THE SALE OF THE SAME SECURITIES AND/OR ALLOWING CUSTOMERS TO MEET REGULATION T MARGIN CALLS BY LIQUIDATING THE SAME OR OTHER COMMITMENTS IN THE ACCOUNTS, THEREBY FREE-RIDING IN CASH ACCOUNT.

FINRA

RESPONDENT BALCHANDANI 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

7/26/2012

PURSUANT TO ARTICLE VI, SECTION 3 OF FINRA BY-LAWS AND FINRA RULE 9554, RESPONDENT BALCHANDANI 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.

BREACH OF FIDUCIARY DUTY, CHURNING; MISREPRESENTATIONS, OMISSION OF MATERIAL FACTS, SUITABILITY; FRAUD; AND NEGLIGENCE. A SCHEME OF USING EXCESSIVE MARGIN CALLS AND TRADING TO GENERATE HUGE COMMISSIONS, MARK-UPS, INTEREST AND FEES FOR RESPONDENT.

$730,000.00

The Award has not been paid.

I DENY ALL CHARGES MADE BY THE CUSTOMER. THE CASE IS FRIVOLOUS AND WITHOUT MERIT. I INTEND TO VIGOROUSLY DEFEND MYSELF.