Canaccord Genuity Wealth Management (Usa) Inc.

Allegations: ACCEPTED OPTION ORDERED PRIOR TO APPROVAL BY ROP; FAILED TO HAVE WRITTEN OPTION AGREEMENTS WITHIN REQUIRED TIME; FAILED TO ADHERE TO WRITTEN SUPERVISORY PROCEDURES IN REG T2, MARGIN REQUIREMENTS, LIQUIDATION, UNCOVERED OPTION CONTRACTS; PURCHASES IN NON-MARGINABLE SECURITIES. Status: Final Sanction Detail: PRACTICES AND DEFICIENCIES WERE CORRECTED, CENSURED AND JONTLY FINED $4000.00. Summary: IT SHOULD BE NOTED THAT THESE EVENTS TOOK PLACE PRIOR TO THE ACQUISITION OF NORAM BY ITS CURRENT OWNERS AND THOSE NAMED ARE NOT ASSOCIATED WITH NORAM OR ANY CANACCORD COMPANY IN ANY CAPACITY.

Allegations: ALLEGED VIOLATIONS OF CUSTOMER CONTRACTS WITH NO APPROVAL BY PRINCIPAL, NON DISSENINATION OF BASIC OPTION DISCLOSURE DOCUMENTS TO CUSTOMERS AND NO MARK TO MARKET PRICING & MV PROVIDED TO CUSTOMERS WITH MARGIN ACCOUNTS FOR OPTION POSITIONS. Status: Final Sanction Detail: DEFICIENCIES WERE CORRECTED, EQUITY SECURITIES FINED $500 AND CENSURED. Summary: IT SHOULD BE NOTED THAT THESE EVENTS TOOK PLACE PRIOR TO THE ACQUISITION OF NORAM BY ITS CURRENT OWNERS AND THOSE NAMED AR NOT ASSOCIATED WITH NORAM OR ANY CANACCORD COMPANY IN ANY CAPACITY.

Allegations: VIOLATION OF MSRB RULE G37/G-38. Status: Final Sanction Detail: AWC W/$250 FINE Summary: THIS WAS A FAILURE TO INCLUDE ON MUNICIPAL UNDERWRITTING IN WHICH SOUTHWEST ACTED AS MANAGER. WE HAVE SINCE PUT IN PLACE PROCEDURES TO PREVENT THIS FROM HAPPENING IN THE FUTURE.

Allegations: VIOLATION OF MSRB RULE G-17. DID NOT INCLUDE ALL REPORTABLE CONTRIBUTIONS. Status: Final Sanction Detail: LETTER OF AWC W/$2000.00 FINE.

Allegations: ALLEGED VIOLATION OF FREE RIDING AND WITHHOLDING THRU THE SALE OF HOT ISSUES RESTRICTED TO AN INDIVIDUAL Status: Final Sanction Detail: EQUITY SECURIITES IMPLEMENTED THE DISTRICT INTERPRETATION INTO OPERAITON PROCEDURES. CENSURED AND FINED $2125.00. Summary: IT SHOULD BE NOTED THAT THESE EVENTS TOOK PLACE PRIOR TO THE ACQUISITION OF NORAM BY ITS CURRENT OWNERS AND THOSE NAMED ARE NOT ASSOCIATED WITH NORAM OR ANY CANACCORD COMPANY IN ANY CAPACITY.

Allegations: A CONSENT ORDER WAS ISSUED BY THE COMMMISSIONER ON JANUARY 29, 1981, SUSPENDING THE LIMITED BROKER-DEALER'S LICENSE OF EQUITY SECURITIES TRADING CO., FOR 100 DAYS COMMENCING ON JANUARY 31, 1981. Status: Final Sanction Detail: 100 DAY SUSPENSION, STARTING JAN 31, 1981, AFTER WHICH LICENSE LIMITED TO CLEARING TRANSACTIONS ON A FULLY DISCLOSED BASIS FOR SUBSEQUENT 180 DAYS. Summary: IT SHOULD BE NOTED THAT THESE EVENTS TOOK PLACE PRIOR TO THE ACQUISITION OF NORAM BY ITS CURRENT OWNDERS AND THOSE NAMED ARE NOT ASSOCIATED WITH NORAM OR ANY CANACCORD COMPANY IN ANY CAPACITY.

Allegations: EQUITY EFFECTED 7 NON-INSTITUTIONAL TRANSACTIONS DURING A 21-MONTH PERIOD WHILE UNREGISTERED AS A BROKER/DEALER IN MASSACHUSETTS. Status: Final Sanction Detail: MASSACHUSETTS ORDERED THAT RECISSION OFFERS BE PRESENT TO THE (2) MASSACHUSETTS CUSTOMERS INVOLVED IN THE UNREGISTERED NO-EXEMPT TRANSACTIONS WITH A FINE OF $193.67. Summary: IT SHOULD BE NOTED THAT THESE EVENTS TOOK PLACE PRIOR TO THE ACQUISITION OF NORAM, NOW KNOWN AS CANACCORD CAPITAL CORPORATION USA INC., BY ITS CURRENT OWNERS AND THOSE NAMED ARE NOT ASSOCIATED WITH NORAM OR ANY CANACCORD COMPANY IN ANY CAPACITY.

Allegations: EQUITY WAS HELD RESPONSIBLE FOR SUPERVISION OF THE ACTIVITIES OF P.J. KISH AGENT, GERALD LEVINE. SEC ALLEGED VIOLATIONS OF VARIOUS SECTIONS OF SEC ACT AND REG T, AS WELL AS FAILURE TO SUPERVISE EFFECTIVELY. Status: Final Sanction Detail: EQUITY SECURITIES WAS SUSPENDED FOR 90 CALENDAR DAYS FROM ENTERING INTO ANY NEW CLEARING ARRANGEMENTS FOR OTHER B/DS AND MR. NEWMAN WAS SUSPENDED FROM SERVING IN ANY SUPERVISORY CAPACITY FOR 2 WEEKS. Summary: IT SHOULD BE NOTED THAT THESE EVENTS TOOK PLACE PRIOR TO THE AQUISITION OF NORAM BY ITS CURRENT OWNERS AND THOSE NAMED ARE NOT ASSOCIATED WITH NORAM OR ANY CANACCORD COMPANY IN ANY CAPACITY.

Allegations: ALLEGED VIOLATIONS OF ARTICLE III, SECTIONS 1 AND 27 OF THE RULES OF FAIR PRACTICE, SALE OF SHARES TO RESTRICTED PERSONS, FAILURE TO ADEQUATELY SUPERVISE ACTIVITIES OF SALES REPRESENATIVE, Status: Final Sanction Detail: NOVEMBER 2, 1995 - APPEALED TO THE BOARD. NOVEMBER 13, 1995 - APPEALED TO THE SEC. JAN 8, 1998 - COMMISSION SUSTAINS NASD SANCTIONS AGAINST ZIPKIN AND REMANDS SANCTIONS AGAINST EQUITY SECURITIES. Summary: IT SHOULD BE NOTED THAT THESE EVENTS TOOK PLACE PRIOR TO THE ACQUISTION OF NORAM BY ITS CURRENT OWNERS AND THOSE NAMED ARE NOT ASSOCIATED WITH NORAM OR ANY CANACCORD COMPANY IN ANY CAPACITY.

Allegations: ALLEGED VIOLATIONS OF ARTICLE III, SECTIONS 1, 2, 19(E) AND 27 OF THE RULES OF FAIR PRACTICE CONCERNING SUITABILITY AGAINST RESPONDENT O'BRIEN. RESPNDENT MEMBER, THROUGH RESPONDENT NEWMAN FAILED TO PROPERLY SUPERVISE O'BRIEN. Status: Final Sanction Detail: RESPONDENT O'BRIEN WAS CENSURED AND SUSPENDED FROM ASSOCAITION WITH ANY NASD MEMBER IN ANY CAPACITY FOR 35 DAYS, AND WITHIN 45 DAYS MAKE RESTITUTION IN THE AMOUNT OF $6635 TO PUBLIC CUSTOMERS. Summary: IT SHOULD BE NOTED THAT THESE EVENTS TOOK PLACE PRIOR TO THE ACQUISTION OF NORAM BY ITS CURRENT OWNERS AND THOSE NAMED ARE NOT ASSOCIATED WITH NORAM OR ANY CANACCORD COMPANY IN ANY CAPACITY.

Allegations: FIRM FAILED TO MAINTAIN REQUIRED NET CAPITAL WHILE USING INSTRUMENTALITIES OF INTERSTAE COMMERCE TO EFFECT TRANSACTIONS IN SECURITIES Status: Final Sanction Detail: WITHOUT ADMITTING OR DENYING THE ALLEGATIONS, WE CONSENTED TO THE DESCRIBED SANCTIONS AND TO THE ENTRY OF FINDINGS; THEREFORE WE WERE CENSURED AND FINED $7,500

Allegations: CONTRAVENED VSE RULE F.1.02 BY ACCEPTING ORDERS FROM THIRD PARTY WITHOUT HAVING ON FILE A TRADING AUTHORIZATION SIGNED BY THE CLIENT, AND CONTRAVENED VSE BY-LAW 5.01(2) BY PROVIDING INACCURATE INFORMATION TO THE VSE DURING THE COURSE OF AN INVESTIGATION. Status: Final Sanction Detail: FINED (REFER TO QUESTION 12. A/B FOR DETAILS) PAID JUNE/JULY 2001

Allegations: SPECIFICALLY, CANACCORD GENUITY CORP. ADMITTED TO THE FOLLOWING VIOLATION: A) FAILING TO ADEQUATELY SUPERVISE RETAIL CLIENT ACCOUNT ACTIVITY CONTRARY TO IIROC DEALER MEMBER RULES 2500 AND 1300.2 (PRIOR TO JUNE 2008, IDA POLICY 2 AND IDA REGULATION 1300.2) (I) FROM 2005 THROUGH 2010, BY FAILING TO MONITOR ADEQUATELY FIRST LEVEL SUPERVISION AND BY FAILING TO HAVE EFFECTIVE SECOND TIER SUPERVISION; AND (II) FROM JUNE 2009 TO FEBRUARY 2011, BY REFUSING TO ADOPT PROCEDURES TO REASONABLY ASSURE ITSELF THAT ITS CLIENTS WHO PURCHASED PRIVATE PLACEMENTS WERE "ACCREDITED INVESTORS". Status: Final Sanction Detail: AS PART OF THE TERMS OF SETTLEMENT CANACCORD GENUITY CORP WAS FINED $750,000, DISGORGED COMMISSIONS OF $310,000 AND CONTRIBUTED $50,000 TOWARDS IIROC'S INVESTIGATION COSTS. Summary: CANACCORD HAS REPLACED ITS BRANCH MANAGERS IN MONTREAL, KELOWNA AND PRINCE GEORGE, AND OTHER RRS RELATED TO THE INADEQUATE SUPERVISION. SINCE 2008 CANACCORD HAS SPENT APPROXIMATELY $1,000,000 IMPLEMENTING AND MAINTAINING A NEW ELECTRONIC SUPERVISORY SYSTEM TO SUPPLEMENT THEIR CURRENT SUPERVISORY PRACTICES. 10152437.1 CANACCORD CURRENTLY CONDUCTS MORE FREQUENT AUDITS OF ITS FRONT LINE SUPERVISORS AND HAS TIED THEIR COMPENSATION TO THE FREQUENCY AND EFFECTIVENESS OF THEIR SUPERVISORY EFFORTS. IN 2011 CANACCORD RETAINED INDEPENDENT COMPLIANCE CONSULTANTS TO REVIEW ITS COMPLIANCE AND SUPERVISORY SYSTEMS AND ASSESS THE EFFICACY OF SOME OF THE CHANGES UNDERTAKEN BY THE FIRM. THE INDEPENDENT REPORT WAS GENERALLY POSITIVE AND WHERE IT MADE RECOMMENDATIONS, CANACCORD HAS TAKEN ACTION TO ADDRESS THEM.