James I. Black & Company

Allegations: THE FIRM VIOLATED SEC RULES 10B-10 , 10B-16, 17A-3(A)(9), 17A-3(A)(17), 17A-4, SECTIONS 220.4, 220.8 OF REGULATION T, NASD RULES 2110, 3010, 3110, IN THAT JAMES I. BLACK & COMPANY, ACTING THROUGH AN INDIVIDUAL: FAILED TO RETAIN THE FIRM'S INSTANT MESSAGES; AND FAILED TO ISSUE MARGIN CALLS WITH REGARD TO SECURITY TRANSACTIONS, FAILED TO OBTAIN PAYMENT BY THE REGULATION T DATE, AND TO OBTAIN REGULATION T EXTENSION REQUESTS, AND REGULATION T EXTENSION REQUESTS WITH REGARD TO TRANSACTIONS IN PUBLIC CUSTOMER CASH ACCOUNTS. THE FIRM FAILED TO IMPOSE A NINETY DAY FREEZE PERIOD ON SOME PUBLIC CUSTOMER CASH ACCOUNTS AND ALLOWED THESE PUBLIC CUSTOMERS TO EFFECT A PURCHASE OF SECURITIES. THE FIRM FAILED TO PROVIDE WRITTEN NOTIFICATION TO CUSTOMERS OF THE AMOUNT OF ANY REMUNERATION RECEIVED OR TO BE RECEIVED BY THE FIRM IN CONNECTION WITH TRANSACTIONS INVOLVING SHARES OF INVESTMENT COMPANIES AND FAILED TO ENSURE THAT FOR EACH ACCOUNT TO WHICH CREDIT HAD BEEN EXTENDED THAT SUCH ACCOUNT RECEIVED A WRITTEN STATEMENT DISCLOSING INTEREST PERIOD INFORMATION AND ANNUAL INTEREST RATE OR RATES OF INTEREST CHARGED INFORMATION, AS WELL AS, INFORMATION ON THE INTEREST CHARGE FOR EACH DIFFERENT ANNUAL RATE OF INTEREST. JAMES I. BLACK & COMPANY FAILED TO ENSURE THAT PUBLIC CUSTOMER NEW ACCOUNT FORMS CONTAINED ALL OR SOME OF THE NEEDED RELEVANT INFORMATION. THE FIRM FAILED TO ESTABLISH AND MAINTAIN A SUPERVISORY SYSTEM, INCLUDING WRITTEN PROCEDURES, REASONABLY DESIGNED TO ENSURE COMPLIANCE WITH THE SEC AND FINRA RULES. Status: Final Sanction Detail: CASE RESOLVED BY ACCEPTANCE, WAIVER & CONSENT(AWC) ORDER - FINE AND EMPLOYEE SUSPENSION: EMPLOYEE (NON-INVESTMENT ADVISER AFFILIATE) SUSPENDED AS A SUPERVISOR AND PRINCIPAL FOR THREE MONTHS. JAMES I. BLACK AND JESS TUCKER WERE FINED, JOINTLY AND SEVERALLY, $70,000.00. FINE PAID IN FULL ON 10/16/2008. Summary: WITHOUT ADMITTING OR DENYING THE FINDINGS, JAMES I. BLACK & COMPANY CONSENTED TO THE DESCRIBED SANCTIONS AND TO THE ENTRY OF FINDINGS: THEREFORE THE FIRM IS CENSURED AND FINED $70,000 JOINTLY AND SEVERALLY.

Allegations: THE FIRM VIOLATED NASD MARKETPLACE RULE 6130(B) AND NASD CONDUCT RULE 2110- RESPONDENT FIRM FAILED TO ACCEPT OR DECLINE IN NASDAQ MARKET CENTER 120 TRANSACTIONS IN ELIGIBLE SECURITIES WITHIN TWENTY MINUTES AFTER EXECUTION. Status: Final Sanction Detail: WITHOUT ADMITTING OR DENYING THE ALLEGATIONS, RESPONDENT FIRM CONSENTED TO THE DESCRIBED SANCTIONS AND TO THE ENTRY OF FINDINGS; THEREFORE, FIRM WAS CENSURED AND PAID $6,000.00 FINE. Summary: CASE RESOLVED ON 10/31/2005 BY ACCEPTANCE, WAIVER & CONSENT (AWC) ORDER AND MONETARY/FINE OF $6,000.00. WITHOUT ADMITTING OR DENYING THE ALLEGATIONS, RESPONDENT FIRM CONSENTED TO THE DESCRIBED SANCTIONS AND TO THE ENTRY OF FINDINGS; THEREFORE, FIRM IS CENSURED AND FINED $6,000.00. FAILED TO ACCEPT TRADES THROUGH NASDAQ ACT SYSTEM WITHIN TWENTY MINUTES. THE ORDER DOES NOT CONSTITUTE A FINAL ORDER BASED ON VIOLATIONS OF ANY LAWS OR REGULATIONS THAT PROHIBIT FRAUDULENT, MANIPULATIVE, OR DECEPTIVE CONDUCT.

Allegations: THE FIRM VIOLATED NASD RULES 2110, 3011, 3011(A), (B), (C) AND (E), MSRB RULE G-41: THE FIRM PROCEDURES REQUIRED TO LOOK FOR SUSPICIOUS ACTIVITIES AND RED FLAGS AND TO NOTIFY REGULATORY ORGANIZATIONS AND/OR LAW ENFORCEMENT OF SUSPICIOUS ACTIVITIES BY FILING SUSPICIOUS ACTIVITY REPORTS. HOWEVER, THE FIRM, ACTING THROUGH AN INDIVIDUAL, FAILED TO ADEQUATELY ENFORCE ITS OWN PROCEDURES OR OTHERWISE COMPLY WITH THE REQUIREMENTS OF NASD RULE 3011. THE FIRM, ACTING THROUGH AN INDIVIDUAL, FAILED TO ADEQUATELY IMPLEMENT ITS ANTI-MONEY LAUNDERING COMPLIANCE PROGRAM (AML), IN THAT IT FAILED TO ADEQUATELY DETECT, INVESTIGATE, ANALYZE OR REPORT POTENTIALLY SUSPICIOUS ACTIVITY; CONDUCT SUFFICIENT INDEPENDENT TESTS OF ITS AML PROGRAM ON AN ANNUAL BASIS AND CONDUCT ANNUAL AML TRAINING FOR ITS PERSONNEL. BY FAILING TO ADEQUATELY IMPLEMENT ITS AML COMPLIANCE PROGRAM, RESPONDENT PERMITTED THE STOCK PROMOTERS AND OTHER CUSTOMERS, SOME OF WHOM HAD REGULATORY AND/OR CRIMINAL HISTORIES, TO OPEN ACCOUNTS AT THE FIRM, IN WHICH THE STOCK CERTIFICATES FOLLOWED BY EITHER THIRD PARTY JOURNALS OR LIQUIDATIONS AND WIRES TO UNRELATED ACCOUNTS, ACTIVITY WHICH, WITHOUT ADDITIONAL EXPLANATION, MAY BE CONSISTENT WITH THE SALE OF UNREGISTERED SECURITIES OR POSSIBLY MARKET MANIPULATION. Status: Final Sanction Detail: JIB AND TUCKER WERE FINED, JOINTLY AND SEVERALLY, $125,000.00. 16 HOURS OF AML EMPLOYEE TRAINING FOR EACH EMPLOYEE TO BE COMPLETED WITHIN 6 MONTHS OF THE AWC DATE. FINE PAID ON OR ABOUT 6/3/2008 AND AML TRAINING REQUIREMENT HAS SINCE BEEN COMPLETED. Summary: CASE RESOLVED ON 05/09/2008 BY ACCEPTANCE, WAIVER & CONSENT(AWC) ORDER OF CENSURE AND MONETARY/FINE $125,000.00 WITH UNDERTAKINGS. THE ORDER DOES NOT CONSTITUTE A FINAL ORDER BASED ON VIOLATIONS OF ANY LAWS OR REGULATIONS THAT PROHIBIT FRAUDULENT, MANIPULATIVE, OR DECEPTIVE CONDUCT. WITHOUT ADMITTING OR DENYING THE FINDINGS, RESPONDENT MEMBER FIRM CONSENTED TO THE DESCRIBED SANCTION AND TO THE ENTRY OF FINDINGS; THEREFORE, FIRM IS CENSURED AND FINED $125,000 JOINTLY AND SEVERALLY AND REQUIRED TO HAVE ALL OF ITS PERSONNEL REGISTER FOR, WITHIN 60 DAYS, 16 HOURS OF TRAINING RE: ANTI-MONEY LAUNDERING PROGRAM AND PROVIDE FINRA WITH EVIDENCE OF THE REGISTRATION WITHIN 10 DAYS OF REGISTRATION. THE FIRM'S PERSONNEL SHALL COMPLETE SUCH TRAINING WITHIN SIX MONTHS AND PROVIDE FINRA WITH EVIDENCE OF COMPLETION OF THE PROGRAM.

Allegations: THE FIRM VIOLATED SEC RULES 10B-10 , 10B-16, 17A-3(A)(9), 17A-3(A)(17), 17A-4, SECTIONS 220.4, 220.8 OF REGULATION T, NASD RULES 2110, 3010, 3110, IN THAT JAMES I. BLACK & COMPANY, ACTING THROUGH AN INDIVIDUAL: FAILED TO RETAIN THE FIRM'S INSTANT MESSAGES; AND FAILED TO ISSUE MARGIN CALLS WITH REGARD TO SECURITY TRANSACTIONS, FAILED TO OBTAIN PAYMENT BY THE REGULATION T DATE, AND TO OBTAIN REGULATION T EXTENSION REQUESTS, AND REGULATION T EXTENSION REQUESTS WITH REGARD TO TRANSACTIONS IN PUBLIC CUSTOMER CASH ACCOUNTS. THE FIRM FAILED TO IMPOSE A NINETY DAY FREEZE PERIOD ON SOME PUBLIC CUSTOMER CASH ACCOUNTS AND ALLOWED THESE PUBLIC CUSTOMERS TO EFFECT A PURCHASE OF SECURITIES. THE FIRM FAILED TO PROVIDE WRITTEN NOTIFICATION TO CUSTOMERS OF THE AMOUNT OF ANY REMUNERATION RECEIVED OR TO BE RECEIVED BY THE FIRM IN CONNECTION WITH TRANSACTIONS INVOLVING SHARES OF INVESTMENT COMPANIES AND FAILED TO ENSURE THAT FOR EACH ACCOUNT TO WHICH CREDIT HAD BEEN EXTENDED THAT SUCH ACCOUNT RECEIVED A WRITTEN STATEMENT DISCLOSING INTEREST PERIOD INFORMATION AND ANNUAL INTEREST RATE OR RATES OF INTEREST CHARGED INFORMATION, AS WELL AS, INFORMATION ON THE INTEREST CHARGE FOR EACH DIFFERENT ANNUAL RATE OF INTEREST. JAMES I. BLACK & COMPANY FAILED TO ENSURE THAT PUBLIC CUSTOMER NEW ACCOUNT FORMS CONTAINED ALL OR SOME OF THE NEEDED RELEVANT INFORMATION. THE FIRM FAILED TO ESTABLISH AND MAINTAIN A SUPERVISORY SYSTEM, INCLUDING WRITTEN PROCEDURES, REASONABLY DESIGNED TO ENSURE COMPLIANCE WITH THE SEC AND FINRA RULES. Status: Final Sanction Detail: CASE RESOLVED BY ACCEPTANCE, WAIVER & CONSENT(AWC) ORDER - FINE AND EMPLOYEE SUSPENSION: EMPLOYEE (NON-INVESTMENT ADVISER AFFILIATE) SUSPENDED AS A SUPERVISOR AND PRINCIPAL FOR THREE MONTHS. JAMES I. BLACK AND JESS TUCKER WERE FINED, JOINTLY AND SEVERALLY, $70,000.00. FINE PAID IN FULL ON 10/16/2008. Summary: CASE RESOLVED BY ACCEPTANCE, WAIVER & CONSENT(AWC) ORDER FOR A MONETARY FINE OF $70,000 ON 10/10/2008. THE ORDER DID NOT CONSTITUTE FINAL ORDER BASED ON VIOLATIONS OF ANY LAWS OR REGULATIONS THAT PROHIBIT FRAUDULENT, MANIPULATIVE, OR DECEPTIVE CONDUCT MONETARY/FINE $70,000.00