B.B. Graham & Company, Inc.

Allegations: HAWAII REVIEWING WHETHER TRADES WERE MADE PRIOR TO COMPLETION OF REGISTRATION PROCESS. Status: Final Sanction Detail: ON 2/9/00, HI ENTERED INTO CONSENT AGMT W/B.B. GRAHAM & CO., INC.; DAVID L. THOMPSON; CYNTHIA NAJARIAN; STEPHEN M. DRAKE. HI ALLEGED THAT ALL RESPONDENTS ENGAGED IN UNREG'D SALES & B.B. GRAHAM & CO., INC. FAILED TO PROPERLY SUPERVISE SALESPERSONS. AGMT REQ'D B.B. GRAHAM & CO., INC. TO PAY PENALTY OF $7,500. FINE PAID 2/23/00.

Allegations: WITHOUT ADMITTING OR DENYING THE FINDINGS, THE FIRM CONSENTED TO THE SANCTIONS AND TO THE ENTRY OF FINDINGS THAT IT SOLD CORPORATE BONDS TO CUSTOMERS AND FAILED TO SELL SUCH BONDS AT A PRICE THAT WAS FAIR, TAKING INTO CONSIDERATION ALL RELEVANT CIRCUMSTANCES, INCLUDING MARKET CONDITIONS WITH RESPECT TO EACH BOND AT THE TIME OF THE TRANSACTION, THE EXPENSE INVOLVED AND THAT THE FIRM WAS ENTITLED TO A PROFIT. THE FINDINGS STATED THAT THE FIRM'S SUPERVISORY SYSTEM DID NOT PROVIDE FOR SUPERVISION REASONABLY DESIGNED TO ACHIEVE COMPLIANCE WITH RESPECT TO THE APPLICABLE SECURITIES LAWS AND REGULATIONS, AND FINRA RULES, CONCERNING FAIR PRICING OF CORPORATE BOND TRANSACTIONS WITH CUSTOMERS. THE FIRM'S WRITTEN SUPERVISORY PROCEDURES FAILED TO PROVIDE FOR THE MINIMUM REQUIREMENTS FOR ADEQUATE WRITTEN SUPERVISORY PROCEDURES. Status: Final Sanction Detail: THE FIRM WAS CENSURED, FINED $190,000 AND UNDERTAKES TO REVISE ITS WRITTEN SUPERVISORY PROCEDURES. IN DETERMINING THE MONETARY SANCTIONS IMPOSED, FINRA CONSIDERED THAT THE FIRM VOLUNTARILY MADE RESTITUTION OF$259,784.33 TO AFFECTED CUSTOMERS, AS WELL AS THE FIRM 'S FINANCIAL CONDITION.

Allegations: ON SEPTEMBER 01, B. B. GRAHAM & CO APPLIED FOR REGISTRATION IN ALABAMA, ON SEPTEMBER 15, PRIOR TO FIRM APPROVAL, REPRESENTATIVE ROBERT LANGSAM EFFECTED 4 TRADES WITH ALABAMA RESIDENTS. Status: Final Sanction Detail: 500 INVESTIGATION FEE. 550 ADMINISTRATIVE ASSESSMENT. RESPONDENT MUST ENACT PROPER PROCEDURES TO PRECLUDE ANY FUTURE NON-COMPLIANCE WITH THE ACT. RESPONDENT SHALL REFRAIN FROM FUTURE TRADES WITH ALABAMA RESIDENTS UNTIL PROPERLY REGISTERED.