Proactive Advisors, Llc

Allegations: RESTRICTIVE LANGUAGE IN CONFIDENTIALITY AND NON-DISCLOSURE CLAUSE OF ACCOUNT PURCHASE CONTRACT ENTERED INTO BY AFFILIATE VIOLATED NASD MEMBER CONDUCT RULES. AFFILATE FAILED TO MAINTAIN AND FILE COMPLAINT AND NEGLECTED TO AMEND U4 TO DISCLOSE SAME. Status: Final Sanction Detail: AFFILIATE AND NASD MEMBER FIRM PAID A 10,000 MONETARY FINE IN FULL DECEMBER 2006 PURSUANT TO AWC. Summary: ALLEGATIONS REGARDING NASD MEMBER RULE VIOLATIONS ARISING FROM ACCOUNT PURCHASE CONTRACT AND COMPLAINT WERE SETTLED BY AFFILIATE AND FIRM WITH ACCEPTACE, WAIVER AND CONSENT (AWC) ON SEPTEMBER 10, 2004 WHEREBY PARTIES WERE CENSURED AND PAID A FINE OF $10,000.

Allegations: ALLEGATIONS OF INSOLVENCY, UNETHICAL PRACTICE BY ENTERING INTO AN ACCOUNT PURCHASE CONTRACT ALLEDGED TO BE A LOAN, FRAUD BY RESTRICTIVE LANGUAGE CONTAINED IN THE CONFIDENTIALITY, NON-DISCLOSURE CLAUSE, FAILURE TO MAINTAIN RECORDS. Status: Final Sanction Detail: N/A Summary: ACTION INTIATED FOLLOWING EXAMINATION OF AFFILATE WHEN LONG TERM LIABILITY FOR ACCOUNT PURCHASE CONTRACT WAS QUESTIONED ON BALANCE SHEET. ALLEGATIONS MADE AND DENIED. COMPLAINT SETTLED BY UNDERTAKING W/O FINDINGS OF FACT OR FINE. AFFILIATE HAD OFFERED RECISSION AND VOLUTARILY WITHDRAWN IA. AGREED NOT TO ACCEPT OR MAKE LOANS TO CLIENTS.