Citizens Securities, Inc.

Allegations: CITIZENS SECURITIES DID NOT ADEQUATELY DISCLOSE THEIR RELATIONSHIPS WITH CITIZENS BANK OR WITH ENVESTNET, YIELDING INVESTOR CONFUSION. CITIZENS SECURITIES ALSO FAILED TO ADEQUATELY DISCLOSE THE RISKS ASSOCIATED WITH THE PRODUCTS PURCHASED BY A SENIOR INVESTOR, ULTIMATELY LEADING HER TO LIQUIDATE HER PORTFOLIO AT A LOSS. Status: Final Sanction Detail: RESPONDENT WILL BE CENSURED BY THE DIVISION; RESPONDENT SHALL MAKE OFFER OF RESCISSION OF MARKET LINKED CERTIFICATE OF DEPOSIT SOLD TO SENIOR INVESTOR; IN ADDITION TO RESCISSION, RESPONDENT SHALL MAKE PAYMENT OF INTEREST AT A RATE OF 6% PER ANNUM CALCULATED FROM THE DATE OF JANUARY 7, 2017 UNTIL THE DATE ON WHICH THE OFFER OF RESCISSION IS ACCEPTED; AND RESPONDENT SHALL REIMBURSE SENIOR INVESTOR FOR ALL LOSSES AND FEES SUSTAINED IN THE CONNECTION OF THE SALE OF THE PORTFOLIO OFF RUSSELL FUNDS, PLUS 6% INTEREST PER ANNUM ON THE PRINCIPAL BALANCE INVESTED IN THE FUNDS, CALCULATED FORM THE DATE OF JANUARY 7, 2016 UNTIL ACCEPTANCE OF THE OFFER. Summary: CONSENT ORDER SUBMITTER FOR SERVICE FEBRUARY 16, 2016. ORDER STIPULATES THE FOLLOWING: RESPONDENT WILL BE CENSURED BY THE DIVISION; RESPONDENT SHALL MAKE OFFER OF RESCISSION OF MARKET LINKED CERTIFICATE OF DEPOSIT SOLD TO SENIOR INVESTOR; IN ADDITION TO RESCISSION, RESPONDENT SHALL MAKE PAYMENT OF INTEREST AT A RATE OF 6% PER ANNUM CALCULATED FROM THE DATE OF JANUARY 7, 2017 UNTIL THE DATE ON WHICH THE OFFER OF RESCISSION IS ACCEPTED; AND RESPONDENT SHALL REIMBURSE SENIOR INVESTOR FOR ALL LOSSES AND FEES SUSTAINED IN THE CONNECTION OF THE SALE OF THE PORTFOLIO OFF RUSSELL FUNDS, PLUS 6% INTEREST PER ANNUM ON THE PRINCIPAL BALANCE INVESTED IN THE FUNDS, CALCULATED FORM THE DATE OF JANUARY 7, 2016 UNTIL ACCEPTANCE OF THE OFFER.

Allegations: DURING THE PERIOD BEGINNING OCT. 25 2003 THROUGH MARCH 29, 2005, CCO FAILED TO ESTABLISH, MAINTAIN AND ENFORCE A SUPERVISORY SYSTEM AND WRITTEN PROCEDURES THAT WERE REASONABLY DESIGNED TO ACHIEVE COMPLIANCE WITH NASD RULES AND FEDERAL SECURITIES LAWS AND REGULATIONS RELATING TO CUSTOMER SUITABILITY REVIEWS, TELEMARKETING, INTERNAL INSPECTIONS, PRE-REGISTRATION WEB CRD SEARCHES, REVIEW OF WRITTEN CORRESPONDENCE, REGISTRATION OF OFFICES, AND REVIEW AND APPROVAL OF FUND-DIRECT 529 PLAN BUSINESS. Status: Final Sanction Detail: FINE AMOUNT: $850,000, PORTIONS LEVIED AGAINST APPLICANT: $850,000, DATE PAID: OCTOBER 30, 2006; CENSURE; AGREEMENT TO CONDUCT A REVIEW OF CERTAIN SUPERVISORY SYSTEMS AND PROCEDURES. Summary: ON OCTOBER 16,2006, THE NASD ACCEPTED AN ACCEPTANCE, WAIVER & CONSENT (AWC) IMPOSING A FINE OF $850,000 AND A CENSURE. THE FIRM AGREED TO CONDUCT A REVIEW OF ITS SUPERVISORY SYSTEMS AND PROCEDURES IN SPECIFIC AREAS. THE FIRM NEITHER ADMITTED NOR DENIED THE FINDINGS IN THE AWC AND CONSENTED TO THE DESCRIBED SANCTIONS.

Allegations: FROM JAN. 1, 2003 THROUGH DEC. 31, 2004 CCO'S COMPLIANCE DEPARTMENT FAILED TO ADEQUATELY MONITOR FOR POTENTIAL SALES ABUSES AND SUITABILITY ISSUES WITH RESPECT TO VARIABLE ANNUITY SALES TO CUSTOMERS AGE 75 YEARS AND OVER, SOME OF WHICH LIQUIDATED, TRANSFERRED, OR EXCHANGED A SECURITY TO PURCHASE A VARIABLE ANNUITY. FURTHER, CCO DURING THE SAME TIME PERIOD, FAILED TO ADEQUATELY RETAIN E-MAIL COMMUNICATIONS AS IS REQUIRED BY BROKER-DEALER RULES AND REGULATIONS. Status: Final Sanction Detail: THE COMPANY AGREED TO CONDUCT AUDITS RELATED TO THE ISSUES AT HAND, IN EACH NEW HAMPSHIRE BRANCH. FURTHER, TO PROVIDE A REPORT AND CERTIFICATION OF SUCH TO THE DEPARTMENT WITHIN 30 DAYS OF THE ONE-YEAR ANNIVERSARY OF THE AGREEMENT. THE COMPANY PAID THE FINE ON JULY 3, 2007.

Allegations: IN MARCH 2017, WE ENTERED INTO A CONSENT ORDER WITH THE RHODE ISLAND DIVISION OF INSURANCE FOR FAILURE TO DISCLOSE DISCIPLINARY MATTERS OF AFFILIATES DURING THE RENEWAL APPLICATION PROCESS AND WITHIN 30 DAYS OF SUCH MATTERS BEING SETTLED. Status: Final Sanction Detail: ON 3/16/2017 CITIZENS SECURITIES, INC. ENTERED INTO A CONSENT AGREEMENT WITH THE STATE OF RHODE ISLAND DEPARTMENT OF BUSINESS REGULATION INSURANCE DIVISION AND AGREED TO PAY AN ADMINISTRATIVE FINE IN THE AMOUNT OF $5,000.00 Summary: ON 3/16/2017 CITIZENS SECURITIES, INC. ENTERED INTO A CONSENT AGREEMENT WITH THE STATE OF RHODE ISLAND DEPARTMENT OF BUSINESS REGULATION INSURANCE DIVISION AND AGREED TO PAY AN ADMINISTRATIVE FINE IN THE AMOUNT OF $5,000.00

Allegations: WITHOUT ADMITTING OR DENYING THE FINDINGS, THE FIRM CONSENTED TO THE SANCTIONS AND TO THE ENTRY OF FINDINGS THAT IT FAILED TO TIMELY DISCLOSE 45 CUSTOMER COMPLAINTS AND SETTLEMENTS ON ITS ASSOCIATED PERSONS' FORMS U4 AND U5. THE FINDINGS STATED THAT IN ADDITION, 22 INDIVIDUALS ASSOCIATED WITH THE FIRM REPORTED DISCLOSABLE EVENTS SUCH AS OUTSIDE BUSINESS ACTIVITIES OR BANKRUPTCIES ON THEIR ANNUAL COMPLIANCE QUESTIONNAIRES, YET THE FIRM DID NOT TIMELY AMEND THE INDIVIDUALS' FORMS U4. THE FINDINGS ALSO STATED THAT THE FIRM FAILED TO IMPLEMENT AN ADEQUATE SUPERVISORY SYSTEM TO ENSURE THAT THE FIRM REPORTED CUSTOMER COMPLAINTS AND SETTLEMENTS ON ASSOCIATED PERSONS' FORMS U4 AND U5. SPECIFICALLY, THE INDIVIDUALS AT THE FIRM WHO WERE RESPONSIBLE FOR REVIEWING CUSTOMER COMPLAINTS LACKED SUFFICIENT TRAINING ABOUT THE CRITERIA THAT REQUIRED THE FIRM TO REPORT CUSTOMER COMPLAINTS ON ASSOCIATED PERSONS' FORMS U4 AND U5 AND THE DEADLINES FOR DOING SO. IN ADDITION, THE FIRM FAILED TO ENSURE THAT ASSOCIATED PERSONS' ANNUAL COMPLIANCE QUESTIONNAIRES RESPONSES WERE TIMELY REVIEWED. Status: Final Sanction Detail: THE FIRM WAS CENSURED AND FINED $300,000. Summary: AWC WAS EXECUTED AND ACCEPTED. THE FIRM PAID A FINE IN THE AMOUNT OF $300,000.00.

Allegations: WITHOUT ADMITTING OR DENYING THE FINDINGS, THE FIRM CONSENTED TO THE SANCTIONS AND TO THE ENTRY OF FINDINGS THAT IT DISADVANTAGED CERTAIN RETIREMENT PLAN AND CHARITABLE ORGANIZATION CUSTOMERS THAT WERE ELIGIBLE TO PURCHASE CLASS A SHARES IN CERTAIN MUTUAL FUNDS WITHOUT A FRONT-END SALES CHARGE. THE FINDINGS STATED THAT SOME OF THE MUTUAL FUNDS AVAILABLE ON THE FIRM'S RETAIL PLATFORM OFFERED SUCH WAIVERS AND DISCLOSED THOSE WAIVERS IN THEIR PROSPECTUSES. NOTWITHSTANDING THE AVAILABILITY OF THE WAIVERS, THE FIRM FAILED TO APPLY THE WAIVERS TO MUTUAL FUND PURCHASES MADE BY ELIGIBLE CUSTOMERS AND INSTEAD SOLD THEM CLASS A SHARES WITH A FRONT-END SALES CHARGE OR CLASS B OR C SHARES WITH BACK-END SALES CHARGES AND HIGHER ONGOING FEES AND EXPENSES. THESE SALES DISADVANTAGED ELIGIBLE CUSTOMERS BY CAUSING SUCH CUSTOMERS TO PAY HIGHER FEES THAN THEY WERE ACTUALLY REQUIRED TO PAY. THE FINDINGS ALSO STATED THAT THE FIRM FAILED TO REASONABLY SUPERVISE THE APPLICATION OF SALES CHARGE WAIVERS TO ELIGIBLE MUTUAL FUND SALES. THE FIRM RELIED ON ITS FINANCIAL ADVISORS TO DETERMINE THE APPLICABILITY OF SALES CHARGE WAIVERS, BUT FAILED TO MAINTAIN ADEQUATE WRITTEN POLICIES OR PROCEDURES TO ASSIST FINANCIAL ADVISORS IN MAKING THIS DETERMINATION. THE FIRM FAILED TO ESTABLISH AND MAINTAIN WRITTEN PROCEDURES TO IDENTIFY APPLICABLE SALES CHARGE WAIVERS IN FUND PROSPECTUSES FOR ELIGIBLE CUSTOMERS. IN ADDITION, THE FIRM FAILED TO ADEQUATELY NOTIFY AND TRAIN ITS FINANCIAL ADVISORS REGARDING THE AVAILABILITY OF MUTUAL FUND SALES CHARGE WAIVERS FOR ELIGIBLE CUSTOMERS. THE FIRM ALSO FAILED TO ADOPT ADEQUATE CONTROLS TO DETECT INSTANCES IN WHICH THEY DID NOT PROVIDE SALES CHARGE WAIVERS TO ELIGIBLE CUSTOMERS IN CONNECTION WITH THEIR MUTUAL FUND PURCHASES. AS A RESULT OF THE FAILURE OF THE FIRM TO APPLY AVAILABLE SALES CHARGE WAIVERS, THE FIRM ESTIMATES THAT ELIGIBLE CUSTOMERS WERE OVERCHARGED BY APPROXIMATELY $59,627 FOR MUTUAL FUND PURCHASES MADE SINCE JANUARY 1, 2011. Status: Final Sanction Detail: THE FIRM WAS CENSURED, FINED $50,000.00 AND REQUIRED TO PROVIDE FINRA WITH A REMEDIATION PLAN TO REMEDIATE ELIGIBLE CUSTOMERS WHO QUALIFIED FOR, BUT DID NOT RECEIVE, THE APPLICABLE MUTUAL FUND SALES-CHARGE WAIVER. Summary: AS PART OF THIS SETTLEMENT, THE FIRM AGREES TO PAY RESTITUTION TO ELIGIBLE CUSTOMERS, WHICH IS ESTIMATED TO TOTAL $64,023 (THE AMOUNT ELIGIBLE CUSTOMERS WERE OVERCHARGED, INCLUSIVE OF INTEREST). THE FIRM WILL ALSO ENSURE THAT RETIREMENT AND CHARITABLE WAIVERS ARE APPROPRIATELY APPLIED TO ALL FUTURE TRANSACTIONS.

Allegations: IN MAY 2017 WE ENTERED INTO A VOLUNTARY SETTLEMENT AGREEMENT WITH THE NORTH CAROLINA DEPARTMENT OF INSURANCE FOR FAILURE TO DISCLOSE DISCIPLINARY MATTERS DURING THE RENEWAL APPLICATION PROCESS FOR THE YEARS 2010, 2011, 2012 AND 2013, AS WELL AS NOT DISCLOSING DISCIPLINARY MATTERS WITHIN 30 DAYS OF SUCH MATTERS BEING SETTLED BY THE FIRM. Status: Final Sanction Detail: MONETARY FINE IN THE AMOUNT OF $1,500.00 WAS PAID ON MAY 4, 2017. Summary: ON MAY 5, 2017 CITIZENS SECURITIES, INC. ENTERED INTO A VOLUNTARY SETTLEMENT AGREEMENT WITH THE STATE OF NORTH CAROLINA DEPARTMENT OF INSURANCE AND AGREED TO PAY A FINE IN THE AMOUNT OF $1,500.00.

Allegations: THE DEPARTMENT FOUND THAT CSI HAD BEEN ENGAGING IN THE BUSINESS OF INSURANCE WITHOUT A LICENSE AFTER OCTOBER 1, 2006 OR HAD BEEN TRANSACTING BUSINESS AFTER THE DATE OF THE EXPIRATION OF THEIR AGENCY LICENSE. Status: Final Sanction Detail: THE CONSENT ORDER IMPOSED A MONETARY FINE IN THE AMOUNT OF $500.00. Summary: UPON PAYMENT OF THE $500.00 FINE, CSI'S APPLICATION FOR THE FLORIDA INSURANCE LICENSE HAD BEEN ACCEPTED.

Allegations: ON AUGUST 12, 2015, THE U.S. COMPTROLLER OF THE CURRENCY ("OCC") ISSUED A CONSENT ORDER AND A CONSENT ORDER FOR A CIVIL MONEY PENALTY ("OCC ORDERS") AGAINST CITIZENS BANK, NATIONAL ASSOCIATION ("CITIZENS BANK") RELATING TO DEPOSIT RECONCILIATION PRACTICES FROM JANUARY 2008 THROUGH NOVEMBER 2013. THE OCC ORDERS STATE THAT CITIZENS BANK ENGAGED IN UNFAIR AND DECEPTIVE PRACTICES IN VIOLATION OF SECTION 5 OF THE FEDERAL TRADE COMMISSION ACT ("FTC ACT") IN THAT (A) DISCREPANCIES OCCURRED BETWEEN THE AMOUNT OF FUNDS DEPOSITED BY CITIZENS BANK CUSTOMERS AND THE AMOUNT OF FUNDS ENCODED FROM CUSTOMERS' ACCOMPANYING DEPOSIT SLIPS ; (B) CITIZENS BANK EMPLOYEES FAILED TO FOLLOW CONSISTENTLY REVIEW PROCEDURES IN ORDER TO RECONCILE AND CORRECT DISCREPANCIES IN CERTAIN INSTANCES; (C) CITIZENS BANK FAILED TO NOTIFY AFFECT CUSTOMERS OF CERTAIN DISCREPANCIES AND CERTAIN CUSTOMERS MAY NOT HAVE RECEIVED CREDIT FOR CERTAIN AMOUNTS ACTUALLY DEPOSITED; AND (D) CITIZENS BANK'S DEPOSIT ACCOUNT AGREEMENTS FAILED TO DESCRIBE ACCURATELY CITIZENS BANK'S PROCESS FOR RESOLVING THESE DISCREPANCIES AND HOW RESULTING ADJUSTMENTS TO DEPOSITORS' ACCOUNTS WERE MADE. IN ADDITION, THE OCC ORDERS STATE THAT CITIZENS BANK'S FAILURE TO PERFORM APPROPRIATE RISK ASSESSMENTS AND IMPLEMENT APPROPRIATE INTERNAL CONTROLS AND STAFFING FOR DEPOSIT RECONCILIATION PRACTICES CONSTITUTED UNSAFE AND UNSOUND PRACTICES. Status: Final Sanction Detail: IN THE OCC ORDERS, CITIZENS BANK AGREED TO PAY A CIVIL MONEY PENALTY IN THE TOTAL AMOUNT OF $10 MILLION, WHICH WAS PAID ON AUGUST 12, 2015. IN THE OCC ORDERS, CITIZENS BANK AGREED: (A) THAT THE BOARD OF DIRECTORS OF CITIZENS BANK SHALL APPOINT AND MAINTAIN AN ACTIVE COMPLIANCE COMMITTEE OF AT LEAST THREE DIRECTORS THAT SHALL BE RESPONSIBLE FOR MONITORING AND OVERSEEING CITIZENS BANK'S COMPLIANCE WITH THE OCC ORDERS; (B) TO SUBMIT TO THE OCC AN ACCEPTABLE PLAN CONTAINING A COMPLETE DESCRIPTION OF THE ACTIONS THAT ARE NECESSARY AND APPROPRIATE TO ACHIEVE COMPLIANCE WITH CERTAIN PROVISIONS OF THE OCC ORDERS; (C) TO MAKE FULL REIMBURSEMENT, AS DESCRIBED IN THE OCC ORDERS, TO ALL ELIGIBLE CUSTOMERS; (D) TO DEVELOP AND SUBMIT TO THE OCC A REIMBURSEMENT PLAN APPROVED BY CITIZENS BANK'S BOARD; (E) TO RETAIN AN INDEPENDENT CONSULTANT TO REVIEW AND ASSESS COMPLIANCE WITH THE TERMS OF THE REIMBURSEMENT PLAN; (F) TO SUBMIT A WRITTEN RISK MANAGEMENT PROGRAM FOR ITS DEPOSIT RECONCILIATION PRACTICES; AND (G) TO SUBMIT THE WRITTEN PLANS, PROGRAMS, POLICIES, AND PROCEDURES REQUIRED BY THE OCC ORDERS TO THE OCC FOR REVIEW AND PROVIDE QUARTERLY WRITTEN PROGRESS REPORTS. Summary: IN SETTLEMENT OF THIS MATTER, CITIZENS BANK CONSENTED AND AGREED TO THE ISSUANCE OF THE OCC ORDERS, WHICH THE OCC HAS DETERMINED TO ACCEPT AND HAS ISSUED. THE ALLEGATIONS, DISPOSITIONS, FINDINGS AND SANCTIONS OF THE OCC ORDERS ARE DESCRIBED ABOVE IN ITEMS 7 AND 12.

Allegations: ON AUGUST 12, 2015, THE U.S. CONSUMER FINANCIAL PROTECTION BUREAU ("CFPB") ISSUED A CONSENT ORDER ("CFPB ORDER") AGAINST CITIZENS FINANCIAL GROUP, INC.; CITIZENS BANK, N.A.; AND/OR CITIZENS BANK OF PENNSYLVANIA (COLLECTIVELY, THE "BANKS") RELATING TO DEPOSIT RECONCILIATION PRACTICES FROM JANUARY 2008 THROUGH NOVEMBER 2013. THE CFPB ORDER STATES THAT: (A) THE BANKS ENGAGED IN UNFAIR ACTS OR PRACTICES IN VIOLATION OF 12 U.S.C. §§ 5531, 5536 BY PROCESSING DEPOSITS SUCH THAT CERTAIN CUSTOMERS DID NOT RECEIVE CREDIT FOR THE FULL AMOUNT OF DEPOSITED FUNDS; AND (B) THE BANKS' DISCLOSURES RELATING TO THE DEPOSIT PROCESS WERE DECEPTIVE IN VIOLATION OF 12 U.S.C. §§ 5531, 5563. CITIZENS SECURITIES, INC. WAS NOT NAMED IN THE CFPB ORDER OR SUBJECT TO IT IN ANY WAY. Status: Final Sanction Detail: IN THE CFPB ORDER, THE BANKS AGREED TO PAY REDRESS TO AFFECTED CUSTOMERS OF AN AMOUNT OF APPROXIMATELY $11 MILLION AND PAY A CIVIL MONEY PENALTY IN THE TOTAL AMOUNT OF $7.5 MILLION, WHICH WAS PAID ON AUGUST 14, 2015. IN THE CFPB ORDER, THE BANKS AGREED TO NOT VIOLATE 12 U.S.C. §§ 5531 AND 5536 IN CONNECTION WITH DEPOSIT TRANSACTIONS AND RESOLVING DEPOSIT DISCREPANCIES. IN ADDITION, THE BANKS AGREED THAT: (A) THEY MUST CORRECT ALL VIOLATIONS OF LAW DESCRIBED IN THE CFPB ORDER AND IMPLEMENT PROCEDURES TO PREVENT THEIR REOCCURRENCE; (B) THEY MUST DEVELOP A WRITTEN CONSUMER COMPLIANCE INTERNAL AUDIT PROGRAM FOR PROCESSING OF DEPOSITS AND DEPOSIT DISCREPANCIES; (C) THEY MAY NOT MISREPRESENT, OR ASSIST OTHERS IN MISREPRESENTING, EXPRESSLY OR IMPLIEDLY THEIR DEPOSIT PROCESSING PRACTICES; (D) THE BANKS' BOARD OF DIRECTORS MUST ESTABLISH A COMPLIANCE COMMITTEE OF AT LEAST THREE DIRECTORS RESPONSIBLE FOR MONITORING AND COORDINATING THE BANKS' COMPLIANCE WITH THE CFPB ORDER; (E) THE COMPLIANCE COMMITTEE WILL SUBMIT TO THE CFPB A COMPLIANCE PLAN; (F) THE BANKS' BOARD MUST (I) AUTHORIZE THE BANKS' ACTIONS TO COMPLY WITH THE CFPB ORDER; (II) REQUIRE TIMELY REPORTING BY MANAGEMENT TO THE BOARD OF THE STATUS OF COMPLIANCE OBLIGATIONS, AND (III) REQUIRE TIMELY AND APPROPRIATE CORRECTIVE ACTION TO REMEDY ANY MATERIAL NON-COMPLIANCE WITH SUCH BOARD DIRECTIVES; (G) THE BANKS MUST NOTIFY THE CFPB OF ANY DEVELOPMENT THAT MANY AFFECT COMPLIANCE OBLIGATIONS UNDER THE CFPB ORDER AND PROVIDE WRITTEN COMPLIANCE PROGRESS REPORTS; (H) THE BANKS MUST DELIVER A COPY OF THE CFPB ORDER TO THEIR BOARD MEMBERS, EXECUTIVE OFFICERS AND OTHERS WHO HAVE RESPONSIBILITIES RELATING TO THE SUBJECT MATTER OF THE CFPB ORDER; AND (I) THE BANKS MUST CREATE AND RETAIN CERTAIN BUSINESS RECORDS. Summary: IN SETTLEMENT OF THIS MATTER, THE BANKS CONSENTED AND AGREED TO THE ISSUANCE OF THE CFPB ORDER, WHICH THE CFPB HAS DETERMINED TO ACCEPT AND HAS ISSUED. THE ALLEGATIONS, DISPOSITIONS, FINDINGS AND SANCTIONS OF THE CFPB ORDER ARE DESCRIBED ABOVE IN ITEMS 7 AND 12.

Allegations: ON AUGUST 12, 2015, THE U.S. FEDERAL DEPOSIT INSURANCE CORPORATION ("FDIC") ISSUED AN ORDER FOR RESTITUTION AND ORDER TO PAY CIVIL MONEY PENALTY ("FDIC ORDER") AGAINST CITIZENS BANK OF PENNSYLVANIA (THE "BANK") RELATING TO DEPOSIT RECONCILIATION PRACTICES FROM JANUARY 2008 THROUGH NOVEMBER 2013. THE FDIC ORDER STATES THAT THE BANK ENGAGED IN VIOLATIONS OF SECTION 5 OF THE FEDERAL TRADE COMMISSION ACT ("FTC ACT") AS A RESULT OF ITS UNFAIR AND DECEPTIVE DISCLOSURE AND IMPLEMENTATION OF DEPOSIT RECONCILIATION PROCEDURES. Status: Final Sanction Detail: IN THE FDIC ORDER, THE BANK AGREED TO PROVIDE RESTITUTION TO CERTAIN INDIVIDUAL AND BUSINESSES ACCOUNTHOLDERS AND TO PAY A CIVIL MONEY PENALTY IN THE TOTAL AMOUNT OF $3 MILLION, WHICH WAS PAID ON AUGUST 11, 2015. IN ADDITION, THE BANK AGREED TO CEASE AND DESIST FROM OPERATING IN VIOLATION OF SECTION 5 OF THE FTC ACT IN CONNECTION WITH ITS DEPOSIT RECONCILIATION PROCEDURES. ALSO, THE BANK AGREED: (A) TO PREPARE AND IMPLEMENT A COMPREHENSIVE RESTITUTION PLAN; (B) TO HIRE AN INDEPENDENT, THIRD-PARTY AUDITOR TO REVIEW THE BANK'S COMPLETION OF THE RESTITUTION PLAN AND PROVIDE A DETAILED WRITTEN REPORT; (C) TO SEND REFUNDS TO ELIGIBLE CONSUMERS AND MAKE REASONABLE ATTEMPTS TO FIND CURRENT ADDRESSES IF LETTERS OR REFUNDS ARE RETURNED; (D) TO RETAIN ALL RECORDS PERTAINING TO THE RESTITUTION; (D) TO FURNISH WRITTEN PROGRESS REPORTS TO THE FDIC QUARTERLY; AND (F) TO SEND TO ITS SOLE SHAREHOLDER (CITIZENS FINANCIAL GROUP INC.) A COPY OR DESCRIPTION OF THE FDIC ORDER IN CONJUNCTION BOTH WITH THE BANK'S NEXT SHAREHOLDER COMMUNICATION AND WITH ITS NOTICE AND/OR PROXY STATEMENT PROCEEDING THE BANK'S NEXT SHAREHOLDER MEETING. Summary: IN SETTLEMENT OF THIS MATTER, THE BANK CONSENTED AND AGREED TO THE ISSUANCE OF THE FDIC ORDER, WHICH THE FDIC HAS DETERMINED TO ACCEPT AND HAS ISSUED. THE ALLEGATIONS, DISPOSITIONS, FINDINGS AND SANCTIONS OF THE FDIC ORDER ARE DESCRIBED ABOVE IN ITEMS 7 AND 12.

Allegations: IN APRIL 2018 WE ENTERED INTO A STIPULATION WITH THE NEW YORK STATE DEPARTMENT OF FINANCIAL SERVICES IN WHICH IT WAS AGREED THAT CITIZENS SECURITIES, INC., (CSI) HAD (A) PROVIDED MATERIALLY INCORRECT AND UNTRUE INFORMATION WITHIN THE MEANING OF SECTION 2110(A)(2) OF THE INSURANCE LAW IN ITS RELICENSING APPLICATION FOR AN AGENT'S LICENSE PURSUANT TO SECTION 2103(A) OF THE INSURANCE LAW, CERTIFIED JULY 12, 2013, IN THAT RESPONDENT FAILED TO DISCLOSE THAT RESPONDENT WAS FINED BY THE MASSACHUSETTS SECURITIES DIVISION, THE RHODE ISLAND DIVISION OF SECURITIES, THE NEW HAMPSHIRE BUREAU OF SECURITIES REGULATION, THE FLORIDA DEPARTMENT OF FINANCIAL SERVICES, THE DELAWARE INSURANCE DEPARTMENT AND THE NEW JERSEY DEPARTMENT OF BANKING AND INSURANCE ON OR ABOUT JULY 22, 2005, APRIL 14, 2006, JUNE 29, 2007, JANUARY 28, 2009, JUNE 2, 2009 AND OCTOBER 25, 2011, RESPECTIVELY, AND THAT RESPONDENT WAS FOUND LIABLE IN FINANCIAL INDUSTRY REGULATORY AUTHORITY ("FINRA") ARBITRATION PROCEEDINGS UNDER CASE NUMBERS 09-00759, 09-06332, 10-01505 AND 10-04699; (B) PROVIDED MATERIALLY INCORRECT AND UNTRUE INFORMATION WITHIN THE MEANING OF SECTION 2110(A)(2) OF THE INSURANCE LAW IN ITS RENEWAL APPLICATION FOR AN AGENT'S LICENSE PURSUANT TO SECTION 2103(A) OF THE INSURANCE LAW, PROCESSED JUNE 17, 2011, IN THAT RESPONDENT FAILED TO DISCLOSE THAT AT THE TIME OF THE SUBMISSION OF SAID APPLICATION, CSI WAS A PARTY TO THE AFOREMENTIONED FINRA ARBITRATION PROCEEDINGS UNDER CASE NUMBERS 09-06332, 10-01505 AND 10-04699; (C) PROVIDED MATERIALLY INCORRECT AND UNTRUE INFORMATION WITHIN THE MEANING OF SECTION 2110(A)(2) OF THE INSURANCE LAW IN ITS RENEWAL APPLICATION FOR AN AGENT'S LICENSE PURSUANT TO SECTION 2103(A) OF THE INSURANCE LAW, PROCESSED MAY 7, 2009, IN THAT RESPONDENT FAILED TO DISCLOSE THAT AT THE TIME OF THE SUBMISSION OF SAID APPLICATION, RESPONDENT WAS A PARTY TO THE AFOREMENTIONED FINRA ARBITRATION PROCEEDING UNDER CASE NUMBER 09-00759; (D) VIOLATED ITS AGREEMENT IN A NEW YORK INSURANCE DEPARTMENT STIPULATION DATED MARCH 4, 2008 THAT RESPONDENT WOULD TAKE ALL NECESSARY STEPS TO PREVENT THE RECURRENCE OF VIOLATIONS OF SECTION 2110(A)(2) OF THE INSURANCE LAW; AND (E) VIOLATED SECTION 2103(C) OF THE INSURANCE LAW IN THAT DURING THE APPROXIMATE PERIOD JUNE 4, 2014 TO MAY 21, 2015, RESPONDENT ALLOWED PERSONS WHO WERE NOT NAMED SUBLICENSEES OF RESPONDENT TO ACT INDIVIDUALLY AS INSURANCE AGENTS UNDER RESPONDENT'S LICENSE TO ACT AS AN AGENT PURSUANT TO SECTION 2103(A) OF THE INSURANCE LAW. Status: Final Sanction Detail: ON APRIL 26, 2018 CITIZENS SECURITIES, INC. EXECUTED STIPULATION WITH NEW YORK STATE DEPARTMENT OF FINANCIAL SERVICES AND AGREED TO PAY A FINE IN THE AMOUNT OF $9,500.00. Summary: MONETARY FINE IN THE AMOUNT OF $9,500.00 WAS PAID ON APRIL 27, 2018.