Sanders Morris LLC

Includes form instructions and options. Options shown in this text do not identify which boxes were selected.

GENERAL INSTRUCTIONS
This Disclosure Reporting Page (DRP ADV) is an 
INITIAL OR
AMENDED response used to report details for affirmative responses to Items 11.C., 11.D.,
11.E., 11.F. or 11.G. of Form ADV.
Regulatory Action
Check item(s) being responded to:
11.C(1)
11.C(2)
11.C(3)
11.C(4)
11.C(5)
11.D(1)
11.D(2)
11.D(3)
11.D(4)
11.D(5)
11.E(1)
11.E(2)
11.E(3)
11.E(4)
11.F.
11.G.
Use a separate DRP for each event or proceeding . The same event or proceeding may be reported for more than one person or entity using one DRP. File
with a completed Execution Page. 
One event may result in more than one affirmative answer to Items 11.C., 11.D., 11.E., 11.F. or 11.G. Use only one DRP to report details related to the
same event. If an event gives rise to actions by more than one regulator, provide details for each action on a separate DRP.
PART I
A.  The person(s) or entity(ies) for whom this DRP is being filed is (are):
You (the advisory firm)
You and one or more of your advisory affiliates
One or more of your advisory affiliates
If this DRP is being filed for an advisory affiliate, give the full name of the advisory affiliate below (for individuals, Last name, First name, Middle name). 
If the advisory affiliate has a CRD number, provide that number. If not, indicate "non-registered" by checking the appropriate box.
ADV DRP - ADVISORY AFFILIATE
No Information Filed
This DRP should be removed from the ADV record because the advisory affiliate(s) is no longer associated with the adviser.
This DRP should be removed from the ADV record because: (1) the event or proceeding occurred more than ten years ago or (2) the adviser is
registered or applying for registration with the SEC or reporting as an exempt reporting adviser with the SEC and the event was resolved in the
adviser's or advisory affiliate's favor.
If you are registered or registering with a state securities authority , you may remove a DRP for an event you reported only in response to Item
11.D(4), and only if that event occurred more than ten years ago. If you are registered or registering with the SEC, you may remove a DRP for any
event listed in Item 11 that occurred more than ten years ago.
This DRP should be removed from the ADV record because it was filed in error, such as due to a clerical or data-entry mistake. Explain the
circumstances: 
B.
If the advisory affiliate is registered through the IARD system or CRD system, has the advisory affiliate submitted a DRP (with Form ADV, BD or U-4) to
the IARD or CRD for the event? If the answer is "Yes," no other information on this DRP must be provided.
 Yes
 No
NOTE: The completion of this form does not relieve the advisory affiliate of its obligation to update its IARD or CRD records.
PART II
1.  Regulatory Action initiated by:

SEC   
Other Federal   
State   
SRO
Foreign
(Full name of regulator, foreign financial regulatory authority, federal, state, or SRO) 
TEXAS STATE SECURITIES BOARD
2.
Principal Sanction:
Reprimand
Other Sanctions: 
ADMINSITARTIVE FINE
3.
Date Initiated (MM/DD/YYYY): 
11/20/2008
 Exact
 Explanation
If not exact, provide explanation:
4.
Docket/Case Number:
IC08-CAF-20
5.
Advisory Affiliate Employing Firm when activity occurred which led to the regulatory action (if applicable):
6.
Principal Product Type:
Other
Other Product Types: 
NONE
7.
Describe the allegations related to this regulatory action (your response must fit within the space provided):
THE APPLICANT FAILED TO REQUIRE TWO AGENTS OF AN INDEPENDENT FINANCIAL ADVISOR ASSOCIATED WITH APPLICANT'S NETWORK TO OBTAIN
REGISTRATION AND LICENSING EXAMS PRIOR TO PROVIDING INVESTMENT ADVISORY SERVICES IN TEXAS. THE APPLICANT FAILED TO ENFORCE A
SYSTEM REASONABLY DESIGNED TO ACHIEVE COMPLIANCE WITH THE BOARD RULES AND THE TEXAS SECURITIES ACT INVOLVING INVESTMENT
ADVISER AGENT REGISTRATION AND FAILED TO DISCLOSE ONE AGENT'S OUTSIDE BUSINESS ACTIVITY INVOLVING INVESTMENT ADVISORY SERVICES
ON HIS FORM U4.
8.
Current Status?      
 Pending
 On Appeal
 Final
9.
If on appeal, regulatory action appealed to (SEC, SRO, Federal or State Court) and Date Appeal Filed:
If Final or On Appeal, complete all items below. For Pending Actions, complete Item 13 only.
10. How was matter resolved:
Order
11. Resolution Date (MM/DD/YYYY):
11/20/2008
 Exact
 Explanation
If not exact, provide explanation:
12. Resolution Detail:
A.  Were any of the following Sanctions Ordered (check all appropriate items)?
 Monetary/Fine Amount: $ 30,000.00
 Revocation/Expulsion/Denial
 Disgorgement/Restitution
 Censure
 Cease and Desist/Injunction
 Bar
 Suspension
B.
Other Sanctions Ordered:
REPRIMAND
Sanction detail: if suspended, enjoined or barred, provide duration including start date and capacities affected (General Securities Principal,
Financial Operations Principal, etc.). If requalification by exam/retraining was a condition of the sanction, provide length of time given to
requalify/retrain, type of exam required and whether condition has been satisfied. If disposition resulted in a fine, penalty, restitution,
disgorgement or monetary compensation, provide total amount, portion levied against you or an advisory affiliate, date paid and if any portion
of penalty was waived: 
FINE PAID ON NOVEMBER 20, 2008
13. Provide a brief summary of details related to the action status and (or) disposition and include relevant terms, conditions and dates (your response
must fit within the space provided).
THE FIRM CONSENTED TO THE ENTRY OF THE ORDER & THE FINDINGS OF FACTS & CONCLUSIONS OF LAW RELATED TO THE FAILURE TO REQUIRE TWO
AGENTS OF AN INDEPENDENT FINANCIAL ADVISOR ASSOCIATED WITH APPLICANT'S NETWORK TO OBTAIN REGISTRATION AND LICENSING EXAMS
PRIOR TO PROVIDING INVESTMENT ADVISORY SERVICES IN TEXAS. THE FIRM FAILED TO ENFORCE A SYSTEM REASONABLY DESIGNED TO ACHIEVE
COMPLIANCE WITH THE BOARD RULES AND THE TEXAS SECURITIES ACT INVOLVING INVESTMENT ADVISER AGENT REGISTRATION AND FAILED TO

DISCLOSE ONE AGENT'S OUTSIDE BUSINESS ACTIVITY INVOLVING INVESTMENT ADVISORY SERVICES ON HIS FORM U4.

Includes form instructions and options. Options shown in this text do not identify which boxes were selected.

GENERAL INSTRUCTIONS
This Disclosure Reporting Page (DRP ADV) is an 
INITIAL OR
AMENDED response used to report details for affirmative responses to Items 11.C., 11.D.,
11.E., 11.F. or 11.G. of Form ADV.
Regulatory Action
Check item(s) being responded to:
11.C(1)
11.C(2)
11.C(3)
11.C(4)
11.C(5)
11.D(1)
11.D(2)
11.D(3)
11.D(4)
11.D(5)
11.E(1)
11.E(2)
11.E(3)
11.E(4)
11.F.
11.G.
Use a separate DRP for each event or proceeding . The same event or proceeding may be reported for more than one person or entity using one DRP. File
with a completed Execution Page. 
One event may result in more than one affirmative answer to Items 11.C., 11.D., 11.E., 11.F. or 11.G. Use only one DRP to report details related to the
same event. If an event gives rise to actions by more than one regulator, provide details for each action on a separate DRP.
PART I
A.  The person(s) or entity(ies) for whom this DRP is being filed is (are):
You (the advisory firm)
You and one or more of your advisory affiliates
One or more of your advisory affiliates
If this DRP is being filed for an advisory affiliate, give the full name of the advisory affiliate below (for individuals, Last name, First name, Middle name). 
If the advisory affiliate has a CRD number, provide that number. If not, indicate "non-registered" by checking the appropriate box.
ADV DRP - ADVISORY AFFILIATE
No Information Filed
This DRP should be removed from the ADV record because the advisory affiliate(s) is no longer associated with the adviser.
This DRP should be removed from the ADV record because: (1) the event or proceeding occurred more than ten years ago or (2) the adviser is
registered or applying for registration with the SEC or reporting as an exempt reporting adviser with the SEC and the event was resolved in the
adviser's or advisory affiliate's favor.
If you are registered or registering with a state securities authority , you may remove a DRP for an event you reported only in response to Item
11.D(4), and only if that event occurred more than ten years ago. If you are registered or registering with the SEC, you may remove a DRP for any
event listed in Item 11 that occurred more than ten years ago.
This DRP should be removed from the ADV record because it was filed in error, such as due to a clerical or data-entry mistake. Explain the
circumstances: 
B.
If the advisory affiliate is registered through the IARD system or CRD system, has the advisory affiliate submitted a DRP (with Form ADV, BD or U-4) to
the IARD or CRD for the event? If the answer is "Yes," no other information on this DRP must be provided.
 Yes
 No
NOTE: The completion of this form does not relieve the advisory affiliate of its obligation to update its IARD or CRD records.
PART II
1.  Regulatory Action initiated by:
SEC   
Other Federal   
State   
SRO
Foreign
(Full name of regulator, foreign financial regulatory authority, federal, state, or SRO) 
FINANCIAL INDUSTRY REGULATORY AUTHORITY
2.
Principal Sanction:
Civil and Administrative Penalt(ies) /Fine(s)
Other Sanctions: 
CENSURE
3.
Date Initiated (MM/DD/YYYY): 
04/06/2009
 Exact
 Explanation

If not exact, provide explanation:
4.
Docket/Case Number:
20060060470-01
5.
Advisory Affiliate Employing Firm when activity occurred which led to the regulatory action (if applicable):
6.
Principal Product Type:
Equity - OTC
Other Product Types: 
7.
Describe the allegations related to this regulatory action (your response must fit within the space provided):
NASD RULE 6955(A)- FIRM FAILED TO TRANSMIT REPORTABLE ORDER EVENTS TO THE ORDER AUDIT TRAIL SYSTEM OVER 849 BUSINESS DAYS.
8.
Current Status?      
 Pending
 On Appeal
 Final
9.
If on appeal, regulatory action appealed to (SEC, SRO, Federal or State Court) and Date Appeal Filed:
If Final or On Appeal, complete all items below. For Pending Actions, complete Item 13 only.
10. How was matter resolved:
Acceptance, Waiver & Consent(AWC)
11. Resolution Date (MM/DD/YYYY):
04/06/2009
 Exact
 Explanation
If not exact, provide explanation:
12. Resolution Detail:
A.  Were any of the following Sanctions Ordered (check all appropriate items)?
 Monetary/Fine Amount: $ 65,000.00
 Revocation/Expulsion/Denial
 Disgorgement/Restitution
 Censure
 Cease and Desist/Injunction
 Bar
 Suspension
B.
Other Sanctions Ordered:
Sanction detail: if suspended, enjoined or barred, provide duration including start date and capacities affected (General Securities Principal,
Financial Operations Principal, etc.). If requalification by exam/retraining was a condition of the sanction, provide length of time given to
requalify/retrain, type of exam required and whether condition has been satisfied. If disposition resulted in a fine, penalty, restitution,
disgorgement or monetary compensation, provide total amount, portion levied against you or an advisory affiliate, date paid and if any portion
of penalty was waived: 
WITHOUT ADMITTING OR DENYING THE FINDINGS, THE FIRM CONSENTED TO THE DESCRIBED SANCTIONS AND TO THE ENTRY OF FINDINGS;
THEREFORE, THE FIRM IS CENSURED AND FINED $65,000. FINE PAID VIA WIRE ON APRIL 22, 2009.
13. Provide a brief summary of details related to the action status and (or) disposition and include relevant terms, conditions and dates (your response
must fit within the space provided).

Includes form instructions and options. Options shown in this text do not identify which boxes were selected.

GENERAL INSTRUCTIONS
This Disclosure Reporting Page (DRP ADV) is an 
INITIAL OR
AMENDED response used to report details for affirmative responses to Items 11.C., 11.D.,
11.E., 11.F. or 11.G. of Form ADV.
Regulatory Action
Check item(s) being responded to:
11.C(1)
11.C(2)
11.C(3)
11.C(4)
11.C(5)
11.D(1)
11.D(2)
11.D(3)
11.D(4)
11.D(5)
11.E(1)
11.E(2)
11.E(3)
11.E(4)
11.F.
11.G.
Use a separate DRP for each event or proceeding . The same event or proceeding may be reported for more than one person or entity using one DRP. File
with a completed Execution Page. 

One event may result in more than one affirmative answer to Items 11.C., 11.D., 11.E., 11.F. or 11.G. Use only one DRP to report details related to the
same event. If an event gives rise to actions by more than one regulator, provide details for each action on a separate DRP.
PART I
A.  The person(s) or entity(ies) for whom this DRP is being filed is (are):
You (the advisory firm)
You and one or more of your advisory affiliates
One or more of your advisory affiliates
If this DRP is being filed for an advisory affiliate, give the full name of the advisory affiliate below (for individuals, Last name, First name, Middle name). 
If the advisory affiliate has a CRD number, provide that number. If not, indicate "non-registered" by checking the appropriate box.
ADV DRP - ADVISORY AFFILIATE
No Information Filed
This DRP should be removed from the ADV record because the advisory affiliate(s) is no longer associated with the adviser.
This DRP should be removed from the ADV record because: (1) the event or proceeding occurred more than ten years ago or (2) the adviser is
registered or applying for registration with the SEC or reporting as an exempt reporting adviser with the SEC and the event was resolved in the
adviser's or advisory affiliate's favor.
If you are registered or registering with a state securities authority , you may remove a DRP for an event you reported only in response to Item
11.D(4), and only if that event occurred more than ten years ago. If you are registered or registering with the SEC, you may remove a DRP for any
event listed in Item 11 that occurred more than ten years ago.
This DRP should be removed from the ADV record because it was filed in error, such as due to a clerical or data-entry mistake. Explain the
circumstances: 
B.
If the advisory affiliate is registered through the IARD system or CRD system, has the advisory affiliate submitted a DRP (with Form ADV, BD or U-4) to
the IARD or CRD for the event? If the answer is "Yes," no other information on this DRP must be provided.
 Yes
 No
NOTE: The completion of this form does not relieve the advisory affiliate of its obligation to update its IARD or CRD records.
PART II
1.  Regulatory Action initiated by:
SEC   
Other Federal   
State   
SRO
Foreign
(Full name of regulator, foreign financial regulatory authority, federal, state, or SRO) 
FINANCIAL INDUSTRY REGULATORY AUTHORITY
2.
Principal Sanction:
Censure
Other Sanctions: 
FINE
3.
Date Initiated (MM/DD/YYYY): 
09/28/2009
 Exact
 Explanation
If not exact, provide explanation:
THE AWC WAS ACCEPTED BY FINRA ON SEPTEMBER 28, 2009, BUT THE FIRM WAS NOT PROVIDED A COPY UNTIL OCTOBER 7, 2009.
4.
Docket/Case Number:
2008013609701
5.
Advisory Affiliate Employing Firm when activity occurred which led to the regulatory action (if applicable):
6.
Principal Product Type:
Other
Other Product Types: 
TRACE-ELIGIBLE SECURITIES
7.
Describe the allegations related to this regulatory action (your response must fit within the space provided):
NASD RULES 2110, 6230, 6230(A) - SMH CAPITAL, INC. FAILED TO REPORT TO THE TRADE REPORTING AND COMPLIANCE ENGINE (TRACE) 99
TRANSACTIONS IN TRACE-ELIGIBLE SECURITIES WITHIN 15 MINUTES OF THE TIME OF EXECUTION. THIS CONDUCT CONSTITUTES SEPARATE AND
DISTINCT VIOLATIONS OF NASD RULE 6230(A) AND A PATTERN OR PRACTICE OF LATE REPORTING WITHOUT EXCEPTIONAL CIRCUMSTANCES IN
VIOLATION OF NASD RULE 2110. THE FIRM REPORTED 8 TRANSACTIONS IN TRACE-ELIGIBLE SECURITIES TO TRACE THAT IT WAS NOT REQUIRED TO
REPORT.

8.
Current Status?      
 Pending
 On Appeal
 Final
9.
If on appeal, regulatory action appealed to (SEC, SRO, Federal or State Court) and Date Appeal Filed:
If Final or On Appeal, complete all items below. For Pending Actions, complete Item 13 only.
10. How was matter resolved:
Acceptance, Waiver & Consent(AWC)
11. Resolution Date (MM/DD/YYYY):
09/28/2009
 Exact
 Explanation
If not exact, provide explanation:
THE AWC WAS ACCEPTED BY FINRA ON SEPTEMBER 28, 2009, BUT THE FIRM WAS NOT PROVIDED A COPY UNTIL OCTOBER 7, 2009.
12. Resolution Detail:
A.  Were any of the following Sanctions Ordered (check all appropriate items)?
 Monetary/Fine Amount: $ 7,500.00
 Revocation/Expulsion/Denial
 Disgorgement/Restitution
 Censure
 Cease and Desist/Injunction
 Bar
 Suspension
B.
Other Sanctions Ordered:
Sanction detail: if suspended, enjoined or barred, provide duration including start date and capacities affected (General Securities Principal,
Financial Operations Principal, etc.). If requalification by exam/retraining was a condition of the sanction, provide length of time given to
requalify/retrain, type of exam required and whether condition has been satisfied. If disposition resulted in a fine, penalty, restitution,
disgorgement or monetary compensation, provide total amount, portion levied against you or an advisory affiliate, date paid and if any portion
of penalty was waived: 
WITHOUT ADMITTING OR DENYING THE FINDINGS, THE FIRM CONSENTED TO THE DESCRIBED SANCTIONS AND TO THE ENTRY OF FINDINGS;
THEREFORE, THE FIRM IS CENSURED AND FINED $7,500. FINE PAID VIA CHECK ON OCTOBER 9, 2009.
13. Provide a brief summary of details related to the action status and (or) disposition and include relevant terms, conditions and dates (your response
must fit within the space provided).

Includes form instructions and options. Options shown in this text do not identify which boxes were selected.

GENERAL INSTRUCTIONS
This Disclosure Reporting Page (DRP ADV) is an 
INITIAL OR
AMENDED response used to report details for affirmative responses to Items 11.C., 11.D.,
11.E., 11.F. or 11.G. of Form ADV.
Regulatory Action
Check item(s) being responded to:
11.C(1)
11.C(2)
11.C(3)
11.C(4)
11.C(5)
11.D(1)
11.D(2)
11.D(3)
11.D(4)
11.D(5)
11.E(1)
11.E(2)
11.E(3)
11.E(4)
11.F.
11.G.
Use a separate DRP for each event or proceeding . The same event or proceeding may be reported for more than one person or entity using one DRP. File
with a completed Execution Page. 
One event may result in more than one affirmative answer to Items 11.C., 11.D., 11.E., 11.F. or 11.G. Use only one DRP to report details related to the
same event. If an event gives rise to actions by more than one regulator, provide details for each action on a separate DRP.
PART I
A.  The person(s) or entity(ies) for whom this DRP is being filed is (are):
You (the advisory firm)
You and one or more of your advisory affiliates
One or more of your advisory affiliates
If this DRP is being filed for an advisory affiliate, give the full name of the advisory affiliate below (for individuals, Last name, First name, Middle name). 
If the advisory affiliate has a CRD number, provide that number. If not, indicate "non-registered" by checking the appropriate box.

ADV DRP - ADVISORY AFFILIATE
No Information Filed
This DRP should be removed from the ADV record because the advisory affiliate(s) is no longer associated with the adviser.
This DRP should be removed from the ADV record because: (1) the event or proceeding occurred more than ten years ago or (2) the adviser is
registered or applying for registration with the SEC or reporting as an exempt reporting adviser with the SEC and the event was resolved in the
adviser's or advisory affiliate's favor.
If you are registered or registering with a state securities authority , you may remove a DRP for an event you reported only in response to Item
11.D(4), and only if that event occurred more than ten years ago. If you are registered or registering with the SEC, you may remove a DRP for any
event listed in Item 11 that occurred more than ten years ago.
This DRP should be removed from the ADV record because it was filed in error, such as due to a clerical or data-entry mistake. Explain the
circumstances: 
B.
If the advisory affiliate is registered through the IARD system or CRD system, has the advisory affiliate submitted a DRP (with Form ADV, BD or U-4) to
the IARD or CRD for the event? If the answer is "Yes," no other information on this DRP must be provided.
 Yes
 No
NOTE: The completion of this form does not relieve the advisory affiliate of its obligation to update its IARD or CRD records.
PART II
1.  Regulatory Action initiated by:
SEC   
Other Federal   
State   
SRO
Foreign
(Full name of regulator, foreign financial regulatory authority, federal, state, or SRO) 
FINRA
2.
Principal Sanction:
Civil and Administrative Penalt(ies) /Fine(s)
Other Sanctions: 
CENSURE
3.
Date Initiated (MM/DD/YYYY): 
03/22/2012
 Exact
 Explanation
If not exact, provide explanation:
4.
Docket/Case Number:
2009019368101
5.
Advisory Affiliate Employing Firm when activity occurred which led to the regulatory action (if applicable):
6.
Principal Product Type:
Debt - Corporate
Other Product Types: 
TRACE-ELIGIBLE SECURITIES
7.
Describe the allegations related to this regulatory action (your response must fit within the space provided):
SECURITIES EXCHANGE ACT OF 1934 RULE 17A-3, FINRA RULES 3730(A), 6730(C)(8) - SMH CAPITAL INC. N/K/A SANDERS MORRIS HARRIS INC. FAILED
TO ACCURATELY REPORT THE EXECUTION TIMES OF TRANSACTIONS IN CORPORATE DEBT SECURITIES AND FAILED TO TIMELY REPORT THE
TRANSACTIONS IN TRADE REPORTING AND COMPLIANCE ENGINE (TRACE)-ELIGIBLE SECURITIES TO TRACE WITHIN 15 MINUTES OF EXECUTION. THE
FIRM INACCURATELY REPORTED THE EXECUTION TIME FOR SOME OF THE TRANSACTIONS IN ITS ORDER MEMORANDA.
8.
Current Status?      
 Pending
 On Appeal
 Final
9.
If on appeal, regulatory action appealed to (SEC, SRO, Federal or State Court) and Date Appeal Filed:
If Final or On Appeal, complete all items below. For Pending Actions, complete Item 13 only.
10. How was matter resolved:
Acceptance, Waiver & Consent(AWC)
11. Resolution Date (MM/DD/YYYY):
03/27/2012
 Exact
 Explanation
If not exact, provide explanation:

DATE NOTICE OF ACCEPTANCE OF AWC RECEIVED BY THE FIRM.
12. Resolution Detail:
A.  Were any of the following Sanctions Ordered (check all appropriate items)?
 Monetary/Fine Amount: $ 10,000.00
 Revocation/Expulsion/Denial
 Disgorgement/Restitution
 Censure
 Cease and Desist/Injunction
 Bar
 Suspension
B.
Other Sanctions Ordered:
Sanction detail: if suspended, enjoined or barred, provide duration including start date and capacities affected (General Securities Principal,
Financial Operations Principal, etc.). If requalification by exam/retraining was a condition of the sanction, provide length of time given to
requalify/retrain, type of exam required and whether condition has been satisfied. If disposition resulted in a fine, penalty, restitution,
disgorgement or monetary compensation, provide total amount, portion levied against you or an advisory affiliate, date paid and if any portion
of penalty was waived: 
WITHOUT ADMITTING OR DENYING THE FINDINGS, THE FIRM CONSENTED TO THE DESCRIBED SANCTIONS AND TO THE ENTRY OF FINDINGS; THE
FIRM WAS CENSURED AND FINED $10,000. FINE PAID ON 04/05/2012.
13. Provide a brief summary of details related to the action status and (or) disposition and include relevant terms, conditions and dates (your response
must fit within the space provided).
DURING THE PERIOD APRIL 1, 2009 THROUGH JUNE 30, 2009, THE FIRM FAILED TO ACCURATELY REPORT THE EXECUTION TIMES FOR 137
TRANSACTIONS IN CORPORATE DEBT SECURITIES AND FAILED TO TIMELY REPORT ALL 137 TRANSACTIONS TO TRACE WITHIN 15 MINUTES OF
EXECUTION. THE FIRM ALSO INACCURATELY REPORTED THE EXECUTION TIMES FOR 70 OF THE 137 TRANSACIOTNS IN ITS ORDER MEMORANDA.

Includes form instructions and options. Options shown in this text do not identify which boxes were selected.

GENERAL INSTRUCTIONS
This Disclosure Reporting Page (DRP ADV) is an 
INITIAL OR
AMENDED response used to report details for affirmative responses to Items 11.C., 11.D.,
11.E., 11.F. or 11.G. of Form ADV.
Regulatory Action
Check item(s) being responded to:
11.C(1)
11.C(2)
11.C(3)
11.C(4)
11.C(5)
11.D(1)
11.D(2)
11.D(3)
11.D(4)
11.D(5)
11.E(1)
11.E(2)
11.E(3)
11.E(4)
11.F.
11.G.
Use a separate DRP for each event or proceeding . The same event or proceeding may be reported for more than one person or entity using one DRP. File
with a completed Execution Page. 
One event may result in more than one affirmative answer to Items 11.C., 11.D., 11.E., 11.F. or 11.G. Use only one DRP to report details related to the
same event. If an event gives rise to actions by more than one regulator, provide details for each action on a separate DRP.
PART I
A.  The person(s) or entity(ies) for whom this DRP is being filed is (are):
You (the advisory firm)
You and one or more of your advisory affiliates
One or more of your advisory affiliates
If this DRP is being filed for an advisory affiliate, give the full name of the advisory affiliate below (for individuals, Last name, First name, Middle name). 
If the advisory affiliate has a CRD number, provide that number. If not, indicate "non-registered" by checking the appropriate box.
ADV DRP - ADVISORY AFFILIATE
No Information Filed
This DRP should be removed from the ADV record because the advisory affiliate(s) is no longer associated with the adviser.
This DRP should be removed from the ADV record because: (1) the event or proceeding occurred more than ten years ago or (2) the adviser is
registered or applying for registration with the SEC or reporting as an exempt reporting adviser with the SEC and the event was resolved in the
adviser's or advisory affiliate's favor.
If you are registered or registering with a state securities authority , you may remove a DRP for an event you reported only in response to Item
11.D(4), and only if that event occurred more than ten years ago. If you are registered or registering with the SEC, you may remove a DRP for any
event listed in Item 11 that occurred more than ten years ago.

This DRP should be removed from the ADV record because it was filed in error, such as due to a clerical or data-entry mistake. Explain the
circumstances: 
B.
If the advisory affiliate is registered through the IARD system or CRD system, has the advisory affiliate submitted a DRP (with Form ADV, BD or U-4) to
the IARD or CRD for the event? If the answer is "Yes," no other information on this DRP must be provided.
 Yes
 No
NOTE: The completion of this form does not relieve the advisory affiliate of its obligation to update its IARD or CRD records.
PART II
1.  Regulatory Action initiated by:
SEC   
Other Federal   
State   
SRO
Foreign
(Full name of regulator, foreign financial regulatory authority, federal, state, or SRO) 
FINANCIAL INDUSTRY REGULATORY AUTHORITY
2.
Principal Sanction:
Censure
Other Sanctions: 
3.
Date Initiated (MM/DD/YYYY): 
07/11/2012
 Exact
 Explanation
If not exact, provide explanation:
4.
Docket/Case Number:
2009018184601
5.
Advisory Affiliate Employing Firm when activity occurred which led to the regulatory action (if applicable):
6.
Principal Product Type:
Other
Other Product Types: 
HEDGE FUNDS
7.
Describe the allegations related to this regulatory action (your response must fit within the space provided):
FINRA RULE 2010, NASD RULES 2110, 2210 - REGISTERED REPRESENTATIVES OF SANDERS MORRIS HARRIS, INC. DISTRIBUTED PIECES OF HEDGE FUND
ADVERTISING MATERIAL TO RETAIL CUSTOMERS THAT FAILED TO DISCLOSE RISKS ASSOCIATED WITH INVESTING IN HEDGE FUNDS, CONTAINED
CHARTS OR GRAPHS THAT WERE UNCLEAR AND OMITTED MATERIAL INFORMATION, CONTAINED MISLEADING STATEMENTS THAT WERE PROMISSORY OF
POSITIVE FUTURE RETURNS, IMPLIED THAT NEGATIVE RETURNS COULD BE AVOIDED AND/OR IMPLIED THAT PAST PERFORMANCE IS INDICATIVE OF
FUTURE POSITIVE RETURNS. THE FIRM DISTRIBUTED TWO OF THE SUBJECT ADVERTISING PIECES TO RETAIL CUSTOMERS WITHOUT PRINCIPAL REVIEW.
8.
Current Status?      
 Pending
 On Appeal
 Final
9.
If on appeal, regulatory action appealed to (SEC, SRO, Federal or State Court) and Date Appeal Filed:
If Final or On Appeal, complete all items below. For Pending Actions, complete Item 13 only.
10. How was matter resolved:
Acceptance, Waiver & Consent(AWC)
11. Resolution Date (MM/DD/YYYY):
07/11/2012
 Exact
 Explanation
If not exact, provide explanation:
12. Resolution Detail:
A.  Were any of the following Sanctions Ordered (check all appropriate items)?
 Monetary/Fine Amount: $ 75,000.00
 Revocation/Expulsion/Denial
 Disgorgement/Restitution
 Censure
 Cease and Desist/Injunction
 Bar
 Suspension
B.
Other Sanctions Ordered:
Sanction detail: if suspended, enjoined or barred, provide duration including start date and capacities affected (General Securities Principal,

Financial Operations Principal, etc.). If requalification by exam/retraining was a condition of the sanction, provide length of time given to
requalify/retrain, type of exam required and whether condition has been satisfied. If disposition resulted in a fine, penalty, restitution,
disgorgement or monetary compensation, provide total amount, portion levied against you or an advisory affiliate, date paid and if any portion
of penalty was waived: 
WITHOUT ADMITTING OR DENYING THE FINDINGS, THE FIRM CONSENTED TO THE DESCRIBED SANCTIONS AND TO THE ENTRY OF FINDINGS;
THEREFORE, THE FIRM IS CENSURED AND FINED $75,000. FINE PAID ON 7/19/2012.
13. Provide a brief summary of details related to the action status and (or) disposition and include relevant terms, conditions and dates (your response
must fit within the space provided).
A REVIEW OF 148 HEDGE FUND COMMUNICATIONS WITH THE PUBLIC DISTRIBUTED BY THE FIRM DURING THE PERIOD OF JANUARY 1, 2008 THROUGH
DECEMBER 31, 2008, REVEALED THAT NINE OF SUCH PIECES FAILED TO DISCLOSE RISKS ASSOCIATED WITH INVESTING IN HEDGE FUNDS, CONTAINED
CHARTS AND GRAPHS THAT WERE UNCLEAR, OR MADE MISLEADING OR EXAGGERATED CLAIMS, PRESENTATIONS STATEMENTS OR DESCRIPTIONS. TWO
OF SUCH PIECES WERE NOT APPROVED BY A PRINCIPAL PRIOR TO USE.

Includes form instructions and options. Options shown in this text do not identify which boxes were selected.

GENERAL INSTRUCTIONS
This Disclosure Reporting Page (DRP ADV) is an 
INITIAL OR
AMENDED response used to report details for affirmative responses to Items 11.C., 11.D.,
11.E., 11.F. or 11.G. of Form ADV.
Regulatory Action
Check item(s) being responded to:
11.C(1)
11.C(2)
11.C(3)
11.C(4)
11.C(5)
11.D(1)
11.D(2)
11.D(3)
11.D(4)
11.D(5)
11.E(1)
11.E(2)
11.E(3)
11.E(4)
11.F.
11.G.
Use a separate DRP for each event or proceeding . The same event or proceeding may be reported for more than one person or entity using one DRP. File
with a completed Execution Page. 
One event may result in more than one affirmative answer to Items 11.C., 11.D., 11.E., 11.F. or 11.G. Use only one DRP to report details related to the
same event. If an event gives rise to actions by more than one regulator, provide details for each action on a separate DRP.
PART I
A.  The person(s) or entity(ies) for whom this DRP is being filed is (are):
You (the advisory firm)
You and one or more of your advisory affiliates
One or more of your advisory affiliates
If this DRP is being filed for an advisory affiliate, give the full name of the advisory affiliate below (for individuals, Last name, First name, Middle name). 
If the advisory affiliate has a CRD number, provide that number. If not, indicate "non-registered" by checking the appropriate box.
ADV DRP - ADVISORY AFFILIATE
No Information Filed
This DRP should be removed from the ADV record because the advisory affiliate(s) is no longer associated with the adviser.
This DRP should be removed from the ADV record because: (1) the event or proceeding occurred more than ten years ago or (2) the adviser is
registered or applying for registration with the SEC or reporting as an exempt reporting adviser with the SEC and the event was resolved in the
adviser's or advisory affiliate's favor.
If you are registered or registering with a state securities authority , you may remove a DRP for an event you reported only in response to Item
11.D(4), and only if that event occurred more than ten years ago. If you are registered or registering with the SEC, you may remove a DRP for any
event listed in Item 11 that occurred more than ten years ago.
This DRP should be removed from the ADV record because it was filed in error, such as due to a clerical or data-entry mistake. Explain the
circumstances: 
B.
If the advisory affiliate is registered through the IARD system or CRD system, has the advisory affiliate submitted a DRP (with Form ADV, BD or U-4) to
the IARD or CRD for the event? If the answer is "Yes," no other information on this DRP must be provided.
 Yes
 No
NOTE: The completion of this form does not relieve the advisory affiliate of its obligation to update its IARD or CRD records.
PART II
1.  Regulatory Action initiated by:

SEC   
Other Federal   
State   
SRO
Foreign
(Full name of regulator, foreign financial regulatory authority, federal, state, or SRO) 
FINANCIAL INDUSTRY REGULATORY AUTHORITY
2.
Principal Sanction:
Censure
Other Sanctions: 
FINE
3.
Date Initiated (MM/DD/YYYY): 
08/07/2012
 Exact
 Explanation
If not exact, provide explanation:
4.
Docket/Case Number:
2008015360002
5.
Advisory Affiliate Employing Firm when activity occurred which led to the regulatory action (if applicable):
6.
Principal Product Type:
Options
Other Product Types: 
EQUITIES
7.
Describe the allegations related to this regulatory action (your response must fit within the space provided):
SECURITIES EXCHANGE ACT RULES 15C3-1, 17A-3, 17A-11, FINRA RULES 2010, 2360, NASD RULES 2110, 2860, 3010, 3011(A), 3011(B), 3011(C),
3110, MSRB RULE G-41 - SANDERS MORRIS HARRIS INC., ACTING THROUGH TWO PRINCIPALS, FAILED TO REASONABLY SUPERVISE A REGISTERED
REPRESENTATIVE. THE PRINCIPALS FAILED TO ADEQUATELY IMPLEMENT THE REPRESENTATIVE'S HEIGHTENED SUPERVISION PLAN, IN THAT THEY
FAILED TO PRE-APPROVE LOW-PRICED EQUITY TRANSACTIONS EXECUTED BY HIM AND FAILED TO EVIDENCE THEY HAD CONTACTED HIS CUSTOMERS
ON A QUARTERLY BASIS AS REQUIRED BY THE HEIGHTENED SUPERVISION PLAN. THE FIRM FAILED TO ESTABLISH AND MAINTAIN A REASONABLE
SUPERVISORY SYSTEM TO SUPERVISE THE OPTIONS TRADING EFFECTED BY ITS REGISTERED REPRESENTATIVES AT A BRANCH OFFICE. THE FIRM
ALLOWED ITS BRANCH OFFICE, AT WHICH MORE THAN THREE REGISTERED REPRESENTATIVES WERE LOCATED, TO TRANSACT AN OPTIONS BUSINESS
WHILE THE PRINCIPAL SUPERVISOR WAS NOT QUALIFIED AS EITHER A REGISTERED OPTIONS PRINCIPAL OR A LIMITED PRINCIPAL-GENERAL
SECURITIES SALES SUPERVISOR. THE FIRM, ACTING THROUGH ITS ANTI-MONEY LAUNDERING (AML)COMPLIANCE OFFICER (AMLCO), FAILED TO
ESTABLISH AND MAINTAIN AN ADEQUATE AML COMPLIANCE PROGRAM (AMLCP) TO DETECT AND IDENTIFY POTENTIAL RED FLAGS FOR SUSPICIOUS
ACTIVITY. THE FIRM MAINTAINED CLEARING AGREEMENTS WITH FOUR CLEARING PLATFORMS, BUT FAILED TO DOCUMENT ANY REVIEW OF EXCEPTION
REPORTS TO DETECT AND IDENTIFY POTENTIAL RED FLAGS FOR SUSPICIOUS ACTIVITY FROM THREE OF THE FOUR CLEARING PLATFORMS. THE FIRM'S
AMLCP REVIEWS WERE FOCUSED ON THE ACTIVITY CONDUCTED THROUGH ONLY ONE CLEARING PLATFORM. THE FIRM'S AMLCO DID NOT HAVE ACCESS
TO THE TRADING ACTIVITY OR EXCEPTION REPORTS TO REVIEW FOR SUSPICIOUS ACTIVITY ACROSS THREE OUT OF FOUR TRADING PLATFORMS, AND
DID NOT PERFORM ANY MANUAL REVIEW OF ACTIVITY OCCURRING IN THESE PLATFORMS, LEAVING APPROXIMATELY 40% OF THE FIRM'S BUSINESS
THAT WAS NOT SUBJECT TO REVIEW. ACCORDINGLY, THE FIRM, ACTING THROUGH ITS AMLCO, DID NOT IMPLEMENT AN ADEQUATE SYSTEM TO REVIEW
FOR SUSPICIOUS ACTIVITY. THE FIRM, ACTING THROUGH ITS AMLCO, FAILED TO IMPLEMENT THE FIRM'S POLICIES AND PROCEDURES REGARDING DUE
DILIGENCE FOR CORRESPONDENT ACCOUNTS FOR FOREIGN FINANCIAL INSTITUTIONS. THE FIRM'S PROCEDURES PROVIDED THAT CORRESPONDENT
ACCOUNTS FOR FOREIGN FINANCIAL INSTITUTIONS WERE TO BE FORWARDED TO THE AMLCO FOR REVIEW UPON ACCOUNT OPENING. THE FIRM'S
WRITTEN SUPERVISORY PROCEDURES (WSPS)STATED THAT THE AMLCO WAS RESPONSIBLE FOR IDENTIFYING CORRESPONDENT ACCOUNTS FOR
FOREIGN FINANCIAL INSTITUTIONS AND CONDUCTING THE REQUIRED DUE DILIGENCE. THE FIRM HAD FAILED TO MAINTAIN ADEQUATE
DOCUMENTATION EVIDENCING THE IDENTIFICATION AND PERFORMANCE OF DUE DILIGENCE ON ITS FIVE CORRESPONDENT ACCOUNTS FOR FOREIGN
FINANCIAL INSTITUTIONS. THE FIRM, ACTING THROUGH ITS AMLCO, FAILED TO CONDUCT AN ADEQUATE TESTING OF ITS AMLCP. THE TESTING FAILED
TO INCLUDE REVIEWS FOR CUSTOMER IDENTIFICATION PROGRAM COMPLIANCE AND FAILED TO REVIEW THE ADEQUACY OF ITS SUSPICIOUS ACTIVITY
MONITORING PROGRAM; THE TEST RESULTS DID NOT EVEN INCLUDE A FINDING THAT IT FAILED TO MONITOR FOR SUSPICIOUS ACTIVITY OR POTENTIAL
RED FLAGS OF CUSTOMER ACCOUNTS HELD AT THREE OF ITS CLEARING PLATFORMS. THE FIRM FAILED TO FILE A REPORT OF FOREIGN BANK AND
FINANCIAL ACCOUNTS FOR A CALENDAR YEAR AND FILED ITS REPORT FOR THE FOLLOWING YEAR AFTER THE DEADLINE FOR ITS ONE FOREIGN BANK
ACCOUNT. FINRA CONVEYED TO THE FIRM THAT A PROPOSED CREDIT AGREEMENT BETWEEN A BANK AND THE FIRM'S PARENT COMPANY PLEDGED THE
ASSETS OF ITS SUBSIDIARIES WHICH CAUSED A NET CAPITAL CHARGE TO THE FIRM AND IT SHOULD HAVE NOTED THE ENTIRE AMOUNT BORROWED AS
A LIABILITY FOR CALCULATING ITS NET CAPITAL REQUIREMENT SO THAT IT DID NOT ACCURATELY CALCULATE AND REPORT ITS NET CAPITAL
REQUIREMENT FOR MORE THAN 18 MONTHS. THE PARENT COMPANY ACTED TO ALLEVIATE THE FIRM OF THE FINANCIAL OBLIGATIONS AND INCREASE
ITS NET CAPITAL POSITION AND BRING IT OUT OF NET CAPITAL DEFICIENCY AND BRING IT INTO COMPLIANCE.
8.
Current Status?      
 Pending
 On Appeal
 Final
9.
If on appeal, regulatory action appealed to (SEC, SRO, Federal or State Court) and Date Appeal Filed:
If Final or On Appeal, complete all items below. For Pending Actions, complete Item 13 only.
10. How was matter resolved:
Acceptance, Waiver & Consent(AWC)
11. Resolution Date (MM/DD/YYYY):

08/07/2012
 Exact
 Explanation
If not exact, provide explanation:
12. Resolution Detail:
A.  Were any of the following Sanctions Ordered (check all appropriate items)?
 Monetary/Fine Amount: $ 150,000.00
 Revocation/Expulsion/Denial
 Disgorgement/Restitution
 Censure
 Cease and Desist/Injunction
 Bar
 Suspension
B.
Other Sanctions Ordered:
Sanction detail: if suspended, enjoined or barred, provide duration including start date and capacities affected (General Securities Principal,
Financial Operations Principal, etc.). If requalification by exam/retraining was a condition of the sanction, provide length of time given to
requalify/retrain, type of exam required and whether condition has been satisfied. If disposition resulted in a fine, penalty, restitution,
disgorgement or monetary compensation, provide total amount, portion levied against you or an advisory affiliate, date paid and if any portion
of penalty was waived: 
WITHOUT ADMITTING OR DENYING THE FINDINGS, THE FIRM CONSENTED TO THE DESCRIBED SANCTIONS AND TO THE ENTRY OF FINDINGS;
THEREFORE, THE FIRM IS CENSURED AND FINED $150,000, $50,000 PERTAINS TO AN MSRB RULE VIOLATION, AND $25,000 IS JOINTLY AND
SEVERALLY. FINE PAID ON 8/15/2012.
13. Provide a brief summary of details related to the action status and (or) disposition and include relevant terms, conditions and dates (your response
must fit within the space provided).

Includes form instructions and options. Options shown in this text do not identify which boxes were selected.

GENERAL INSTRUCTIONS
This Disclosure Reporting Page (DRP ADV) is an 
INITIAL OR
AMENDED response used to report details for affirmative responses to Items 11.C., 11.D.,
11.E., 11.F. or 11.G. of Form ADV.
Regulatory Action
Check item(s) being responded to:
11.C(1)
11.C(2)
11.C(3)
11.C(4)
11.C(5)
11.D(1)
11.D(2)
11.D(3)
11.D(4)
11.D(5)
11.E(1)
11.E(2)
11.E(3)
11.E(4)
11.F.
11.G.
Use a separate DRP for each event or proceeding . The same event or proceeding may be reported for more than one person or entity using one DRP. File
with a completed Execution Page. 
One event may result in more than one affirmative answer to Items 11.C., 11.D., 11.E., 11.F. or 11.G. Use only one DRP to report details related to the
same event. If an event gives rise to actions by more than one regulator, provide details for each action on a separate DRP.
PART I
A.  The person(s) or entity(ies) for whom this DRP is being filed is (are):
You (the advisory firm)
You and one or more of your advisory affiliates
One or more of your advisory affiliates
If this DRP is being filed for an advisory affiliate, give the full name of the advisory affiliate below (for individuals, Last name, First name, Middle name). 
If the advisory affiliate has a CRD number, provide that number. If not, indicate "non-registered" by checking the appropriate box.
ADV DRP - ADVISORY AFFILIATE
No Information Filed
This DRP should be removed from the ADV record because the advisory affiliate(s) is no longer associated with the adviser.
This DRP should be removed from the ADV record because: (1) the event or proceeding occurred more than ten years ago or (2) the adviser is
registered or applying for registration with the SEC or reporting as an exempt reporting adviser with the SEC and the event was resolved in the
adviser's or advisory affiliate's favor.
If you are registered or registering with a state securities authority , you may remove a DRP for an event you reported only in response to Item
11.D(4), and only if that event occurred more than ten years ago. If you are registered or registering with the SEC, you may remove a DRP for any
event listed in Item 11 that occurred more than ten years ago.
This DRP should be removed from the ADV record because it was filed in error, such as due to a clerical or data-entry mistake. Explain the

circumstances: 
B.
If the advisory affiliate is registered through the IARD system or CRD system, has the advisory affiliate submitted a DRP (with Form ADV, BD or U-4) to
the IARD or CRD for the event? If the answer is "Yes," no other information on this DRP must be provided.
 Yes
 No
NOTE: The completion of this form does not relieve the advisory affiliate of its obligation to update its IARD or CRD records.
PART II
1.  Regulatory Action initiated by:
SEC   
Other Federal   
State   
SRO
Foreign
(Full name of regulator, foreign financial regulatory authority, federal, state, or SRO) 
FINRA
2.
Principal Sanction:
Other Sanctions: 
3.
Date Initiated (MM/DD/YYYY): 
12/21/2012
 Exact
 Explanation
If not exact, provide explanation:
4.
Docket/Case Number:
2011027424701
5.
Advisory Affiliate Employing Firm when activity occurred which led to the regulatory action (if applicable):
6.
Principal Product Type:
No Product
Other Product Types: 
7.
Describe the allegations related to this regulatory action (your response must fit within the space provided):
FINRA RULES 2010, 7450, NASD RULE 3010 - SANDERS MORRIS HARRIS INC. FAILED TO TRANSMIT REPORTABLE ORDER EVENTS (ROES) TO THE ORDER
AUDIT TRAIL SYSTEM (OATS) ON NUMEROUS BUSINESS DAYS. THE FIRM'S SUPERVISORY SYSTEM FAILED TO DESIGNATE AN APPROPRIATELY
REGISTERED PRINCIPAL(S) WITH AUTHORITY TO CARRY OUT THE SUPERVISORY RESPONSIBILITIES WITH RESPECT TO OATS SUPERVISION. THE FIRM
FAILED TO PROVIDE DOCUMENTARY EVIDENCE THAT DURING THE REVIEW PERIOD IT PERFORMED THE SUPERVISORY REVIEWS SET FORTH IN ITS
WRITTEN SUPERVISORY PROCEDURES CONCERNING OATS REPORTING.
8.
Current Status?      
 Pending
 On Appeal
 Final
9.
If on appeal, regulatory action appealed to (SEC, SRO, Federal or State Court) and Date Appeal Filed:
If Final or On Appeal, complete all items below. For Pending Actions, complete Item 13 only.
10. How was matter resolved:
Acceptance, Waiver & Consent(AWC)
11. Resolution Date (MM/DD/YYYY):
12/21/2012
 Exact
 Explanation
If not exact, provide explanation:
12. Resolution Detail:
A.  Were any of the following Sanctions Ordered (check all appropriate items)?
 Monetary/Fine Amount: $ 50,000.00
 Revocation/Expulsion/Denial
 Disgorgement/Restitution
 Censure
 Cease and Desist/Injunction
 Bar
 Suspension
B.
Other Sanctions Ordered:
UNDERTAKING
Sanction detail: if suspended, enjoined or barred, provide duration including start date and capacities affected (General Securities Principal,
Financial Operations Principal, etc.). If requalification by exam/retraining was a condition of the sanction, provide length of time given to
requalify/retrain, type of exam required and whether condition has been satisfied. If disposition resulted in a fine, penalty, restitution,

disgorgement or monetary compensation, provide total amount, portion levied against you or an advisory affiliate, date paid and if any portion
of penalty was waived: 
WITHOUT ADMITTING OR DENYING THE FINDINGS, THE FIRM CONSENTED TO THE DESCRIBED SANCTIONS AND TO THE ENTRY OF FINDINGS;
THEREFORE, THE FIRM IS CENSURED, FINED $50,000 AND REQUIRED TO REVISE ITS WRITTEN SUPERVISORY PROCEDURES REGARDING OATS
SUPERVISION AND OATS REPORTING WITHIN 30 BUSINESS DAYS OF ACCEPTANCE OF THIS AWC BY THE NAC. FINE PAID ON 01/08/2013.
13. Provide a brief summary of details related to the action status and (or) disposition and include relevant terms, conditions and dates (your response
must fit within the space provided).

Includes form instructions and options. Options shown in this text do not identify which boxes were selected.

GENERAL INSTRUCTIONS
This Disclosure Reporting Page (DRP ADV) is an 
INITIAL OR
AMENDED response used to report details for affirmative responses to Items 11.C., 11.D.,
11.E., 11.F. or 11.G. of Form ADV.
Regulatory Action
Check item(s) being responded to:
11.C(1)
11.C(2)
11.C(3)
11.C(4)
11.C(5)
11.D(1)
11.D(2)
11.D(3)
11.D(4)
11.D(5)
11.E(1)
11.E(2)
11.E(3)
11.E(4)
11.F.
11.G.
Use a separate DRP for each event or proceeding . The same event or proceeding may be reported for more than one person or entity using one DRP. File
with a completed Execution Page. 
One event may result in more than one affirmative answer to Items 11.C., 11.D., 11.E., 11.F. or 11.G. Use only one DRP to report details related to the
same event. If an event gives rise to actions by more than one regulator, provide details for each action on a separate DRP.
PART I
A.  The person(s) or entity(ies) for whom this DRP is being filed is (are):
You (the advisory firm)
You and one or more of your advisory affiliates
One or more of your advisory affiliates
If this DRP is being filed for an advisory affiliate, give the full name of the advisory affiliate below (for individuals, Last name, First name, Middle name). 
If the advisory affiliate has a CRD number, provide that number. If not, indicate "non-registered" by checking the appropriate box.
ADV DRP - ADVISORY AFFILIATE
No Information Filed
This DRP should be removed from the ADV record because the advisory affiliate(s) is no longer associated with the adviser.
This DRP should be removed from the ADV record because: (1) the event or proceeding occurred more than ten years ago or (2) the adviser is
registered or applying for registration with the SEC or reporting as an exempt reporting adviser with the SEC and the event was resolved in the
adviser's or advisory affiliate's favor.
If you are registered or registering with a state securities authority , you may remove a DRP for an event you reported only in response to Item
11.D(4), and only if that event occurred more than ten years ago. If you are registered or registering with the SEC, you may remove a DRP for any
event listed in Item 11 that occurred more than ten years ago.
This DRP should be removed from the ADV record because it was filed in error, such as due to a clerical or data-entry mistake. Explain the
circumstances: 
B.
If the advisory affiliate is registered through the IARD system or CRD system, has the advisory affiliate submitted a DRP (with Form ADV, BD or U-4) to
the IARD or CRD for the event? If the answer is "Yes," no other information on this DRP must be provided.
 Yes
 No
NOTE: The completion of this form does not relieve the advisory affiliate of its obligation to update its IARD or CRD records.
PART II
1.  Regulatory Action initiated by:
SEC   
Other Federal   
State   
SRO
Foreign
(Full name of regulator, foreign financial regulatory authority, federal, state, or SRO) 
OFFICE OF THE MISSISSIPPI SECRETARY OF STATE SECURITIES DIVISION

2.
Principal Sanction:
Civil and Administrative Penalt(ies) /Fine(s)
Other Sanctions: 
SUSPENSION
3.
Date Initiated (MM/DD/YYYY): 
07/03/2013
 Exact
 Explanation
If not exact, provide explanation:
RECEIVED WRITTEN NOTICE FROM MISSISSIPPI SECRETARY OF STATE ON 07/18/2013.
4.
Docket/Case Number:
S-11-0167
5.
Advisory Affiliate Employing Firm when activity occurred which led to the regulatory action (if applicable):
6.
Principal Product Type:
Equity Listed (Common & Preferred Stock)
Other Product Types: 
PROMISSORY NOTE
7.
Describe the allegations related to this regulatory action (your response must fit within the space provided):
THE SECRETARY OF STATE OF MISSISSIPPI ISSUED A NOTICE OF INTENT TO IMPOSE ADMINISTRATIVE PENALTIES AND TO SUSPEND THE FIRM'S
REGISTRATION ALLEGING THAT A FORMER REGISTERED REPRESENTATIVE OF THE FIRM VIOLATED RULE 523(3) IN 2003 WHEN HE MADE A
RECOMMENDATION TO A 90-YEAR OLD CLIENT TO PURCHASE A PROMISSORY NOTE AND AGAIN IN 2004 WHEN HE RECOMMENDED SHE CONVERT THE
PROMISSORY NOTE TO PREFERRED STOCK. THE STATE FURTHER ALLEGED THAT THE FIRM UNREASONABLY VALUED THE INVESTMENT ON THE CLIENT'S
ACCOUNT STATEMENT AND FAILED TO EFFECTIVELY SUPERVISE THE REGISTERED REPRESENTATIVE TO PREVENT THE SALE OF UNSUITABLE PRODUCTS
AS ALLEGED.
8.
Current Status?      
 Pending
 On Appeal
 Final
9.
If on appeal, regulatory action appealed to (SEC, SRO, Federal or State Court) and Date Appeal Filed:
If Final or On Appeal, complete all items below. For Pending Actions, complete Item 13 only.
10. How was matter resolved:
Order
11. Resolution Date (MM/DD/YYYY):
03/24/2014
 Exact
 Explanation
If not exact, provide explanation:
12. Resolution Detail:
A.  Were any of the following Sanctions Ordered (check all appropriate items)?
 Monetary/Fine Amount: $ 25,000.00
 Revocation/Expulsion/Denial
 Disgorgement/Restitution
 Censure
 Cease and Desist/Injunction
 Bar
 Suspension
B.
Other Sanctions Ordered:
REIMBURSEMENT OF COSTS AND EXPENSES INCURRED IN THE INVESTIGATION IN THE AMOUNT OF $10,000.00
Sanction detail: if suspended, enjoined or barred, provide duration including start date and capacities affected (General Securities Principal,
Financial Operations Principal, etc.). If requalification by exam/retraining was a condition of the sanction, provide length of time given to
requalify/retrain, type of exam required and whether condition has been satisfied. If disposition resulted in a fine, penalty, restitution,
disgorgement or monetary compensation, provide total amount, portion levied against you or an advisory affiliate, date paid and if any portion
of penalty was waived: 
A CHECK DATED 04/03/2014 IN THE AMOUNT OF $35,000.00 WAS SUBMITTED IN PAYMENT OF A $25,000.00 ADMINISTRATIVE PENALTY AND
$10,000.00 TO REIMBURSE THE COSTS OF THE STATE'S INVESTIGATION.
13. Provide a brief summary of details related to the action status and (or) disposition and include relevant terms, conditions and dates (your response
must fit within the space provided).
IN CONNECTION WITH THE DIVISION'S INVESTIGATION, THE DIVISION ACKNOWLEDGED THE EXISTENCE OF MITIGATING FACTORS AND CORRECTIVE
ACTIONS THAT WERE IMPLEMENTED BY THE FIRM IN 2009-2010 AND THAT THE FIRM UNCONDITIONALLY TENDERED TO THE ESTATE OF THE CUSTOMER
THE SUM OF $75,000.00 AS PARTIAL REIMBURSEMENT OF THE LOSSES ON THE SUBJECT INVESTMENTS. THE DIVISION CONCLUDED THAT THE FIRM,
ACTING THROUGH THE RR, VIOLATED RULE 521(A)(3) IN CONNECTION WITH THE ALLEGEDLY UNSUITABLE RECOMMENDATIONS, AND FURTHER
CONCLUDED THAT THE FIRM FAILED TO REASONABLY SUPERVISE THE RR BY ALLOWING THE CUSTOMER TO PURCHASE AND HOLD THE ALLEGEDLY

UNSUITABLE INVESTMENTS. WITHOUT ADMITTING OR DENYING ANY OF THE FINDINGS OF FACT, ALLEGATIONS, ASSERTIONS OR CONCLUSIONS, ON
MARCH 19, 2014, THE FIRM AGREED TO THE DIVISION'S ENTRY OF AN ADMININSTRATIVE ORDER, AGREED TO PAY AN ADMINISTRATIVE PENALTY OF
$25,000.00, AND AGREED TO REIMBURSE THE DIVISION'S COST OF INVESTIGATION IN THE AMOUNT OF $10,000.00.

Includes form instructions and options. Options shown in this text do not identify which boxes were selected.

GENERAL INSTRUCTIONS
This Disclosure Reporting Page (DRP ADV) is an 
INITIAL OR
AMENDED response used to report details for affirmative responses to Items 11.C., 11.D.,
11.E., 11.F. or 11.G. of Form ADV.
Regulatory Action
Check item(s) being responded to:
11.C(1)
11.C(2)
11.C(3)
11.C(4)
11.C(5)
11.D(1)
11.D(2)
11.D(3)
11.D(4)
11.D(5)
11.E(1)
11.E(2)
11.E(3)
11.E(4)
11.F.
11.G.
Use a separate DRP for each event or proceeding . The same event or proceeding may be reported for more than one person or entity using one DRP. File
with a completed Execution Page. 
One event may result in more than one affirmative answer to Items 11.C., 11.D., 11.E., 11.F. or 11.G. Use only one DRP to report details related to the
same event. If an event gives rise to actions by more than one regulator, provide details for each action on a separate DRP.
PART I
A.  The person(s) or entity(ies) for whom this DRP is being filed is (are):
You (the advisory firm)
You and one or more of your advisory affiliates
One or more of your advisory affiliates
If this DRP is being filed for an advisory affiliate, give the full name of the advisory affiliate below (for individuals, Last name, First name, Middle name). 
If the advisory affiliate has a CRD number, provide that number. If not, indicate "non-registered" by checking the appropriate box.
ADV DRP - ADVISORY AFFILIATE
No Information Filed
This DRP should be removed from the ADV record because the advisory affiliate(s) is no longer associated with the adviser.
This DRP should be removed from the ADV record because: (1) the event or proceeding occurred more than ten years ago or (2) the adviser is
registered or applying for registration with the SEC or reporting as an exempt reporting adviser with the SEC and the event was resolved in the
adviser's or advisory affiliate's favor.
If you are registered or registering with a state securities authority , you may remove a DRP for an event you reported only in response to Item
11.D(4), and only if that event occurred more than ten years ago. If you are registered or registering with the SEC, you may remove a DRP for any
event listed in Item 11 that occurred more than ten years ago.
This DRP should be removed from the ADV record because it was filed in error, such as due to a clerical or data-entry mistake. Explain the
circumstances: 
B.
If the advisory affiliate is registered through the IARD system or CRD system, has the advisory affiliate submitted a DRP (with Form ADV, BD or U-4) to
the IARD or CRD for the event? If the answer is "Yes," no other information on this DRP must be provided.
 Yes
 No
NOTE: The completion of this form does not relieve the advisory affiliate of its obligation to update its IARD or CRD records.
PART II
1.  Regulatory Action initiated by:
SEC   
Other Federal   
State   
SRO
Foreign
(Full name of regulator, foreign financial regulatory authority, federal, state, or SRO) 
FINANCIAL INDUSTRY REGULATORY AUTHORITY
2.
Principal Sanction:
Civil and Administrative Penalt(ies) /Fine(s)
Other Sanctions: 
3.
Date Initiated (MM/DD/YYYY): 

12/31/2014
 Exact
 Explanation
If not exact, provide explanation:
4.
Docket/Case Number:
2013036468301
5.
Advisory Affiliate Employing Firm when activity occurred which led to the regulatory action (if applicable):
6.
Principal Product Type:
Other
Other Product Types: 
7.
Describe the allegations related to this regulatory action (your response must fit within the space provided):
ON DECEMBER 28, 2012, AS A RESULT OF AN INACCURATE DEFERRED TAX BALANCE CALCULATION, THE FIRM INACCURATELY CALCULATED ITS EXCESS
NET CAPITAL. BASED ON THIS INACCURATE NET CAPITAL CALCULATION, ON DECEMBER 28, 2012, THE FIRM'S BOARD OF DIRECTORS AUTHORIZED A
DISTRIBUTION TO ITS OWNERS. IN CONNECTION WITH THE APPROVED DISTRIBUTION, THE FIRM FILED WITH FINRA A NOTICE OF WITHDRAWAL OF
EQUITY CAPITAL INDICATING THE WITHDRAWAL WOULD OCCUR ON JANUARY 2, 2013. THE FIRM HOWEVER FAILED TO PROPERLY ACCRUE THIS
CAPITAL DISTRIBUTION AS A LIABILITY ON DECEMBER 28, 2012. INSTEAD, THE FIRM WAITED AND REFLECTED THE EXPENSE WHEN THE DISTRIBUTION
OCCURRED ON JANUARY 4, 2013. SMH LATER PROVIDED FINRA WITH AN ESTIMATED NET CAPITAL COMPUTATION AS OF JANUARY 4, 2013 BASED ON
END OF 2012 AUDITED FINANCIALS THAT REFLECTED THE CORRECT VALUE FOR THE DEFERRED TAX ASSET AND THE DISTRIBUTION. THE REVISED
CALCULATION REFLECTED A NET CAPITAL DEFICIENCY FOR THE FIRM THAT REMAINED IN EFFECT UNTIL FEBRUARY 28, 2013. ADDITIONALLY, FROM
OCTOBER 1, 2012 THROUGH FEBRUARY 28, 2013, THE FIRM FAILED TO MAINTAIN ACCURATE BOOKS AND RECORDS TO PROPERLY REFLECT THE BOOK
BASIS AMOUNTS FOR PARTNERSHIP INTERESTS SOLD IN OCTOBER 2012. CONSEQUENTLY, THE FIRM FILED INACCURATE FOCUS FILINGS FOR PERIODS
ENDING OCTOBER 31, 2012, NOVEMBER 30, 2012, DECEMBER 31, 2012, JANUARY 31, 2013, AND FEBRUARY 28, 2013.
8.
Current Status?      
 Pending
 On Appeal
 Final
9.
If on appeal, regulatory action appealed to (SEC, SRO, Federal or State Court) and Date Appeal Filed:
If Final or On Appeal, complete all items below. For Pending Actions, complete Item 13 only.
10. How was matter resolved:
Acceptance, Waiver & Consent(AWC)
11. Resolution Date (MM/DD/YYYY):
01/02/2015
 Exact
 Explanation
If not exact, provide explanation:
12. Resolution Detail:
A.  Were any of the following Sanctions Ordered (check all appropriate items)?
 Monetary/Fine Amount: $ 85,000.00
 Revocation/Expulsion/Denial
 Disgorgement/Restitution
 Censure
 Cease and Desist/Injunction
 Bar
 Suspension
B.
Other Sanctions Ordered:
N/A
Sanction detail: if suspended, enjoined or barred, provide duration including start date and capacities affected (General Securities Principal,
Financial Operations Principal, etc.). If requalification by exam/retraining was a condition of the sanction, provide length of time given to
requalify/retrain, type of exam required and whether condition has been satisfied. If disposition resulted in a fine, penalty, restitution,
disgorgement or monetary compensation, provide total amount, portion levied against you or an advisory affiliate, date paid and if any portion
of penalty was waived: 
TOTAL AMOUNT OF FINE $ 85,000.00. PAYMENT RELASE DATE 01/06/2015.
13. Provide a brief summary of details related to the action status and (or) disposition and include relevant terms, conditions and dates (your response
must fit within the space provided).
ON DECEMBER 28, 2012, AS A RESULT OF AN INACCURATE DEFERRED TAX BALANCE CALCULATION, THE FIRM INACCURATELY CALCULATED ITS EXCESS
NET CAPITAL. BASED ON THIS INACCURATE NET CAPITAL CALCULATION, ON DECEMBER 28, 2012, THE FIRM'S BOARD OF DIRECTORS AUTHORIZED A
DISTRIBUTION TO ITS OWNERS. IN CONNECTION WITH THE APPROVED DISTRIBUTION, THE FIRM FILED WITH FINRA A NOTICE OF WITHDRAWAL OF
EQUITY CAPITAL INDICATING THE WITHDRAWAL WOULD OCCUR ON JANUARY 2, 2013. THE FIRM HOWEVER FAILED TO PROPERLY ACCRUE THIS
CAPITAL DISTRIBUTION AS A LIABILITY ON DECEMBER 28, 2012. INSTEAD, THE FIRM WAITED AND REFLECTED THE EXPENSE WHEN THE DISTRIBUTION
OCCURRED ON JANUARY 4, 2013. SMH LATER PROVIDED FINRA WITH AN ESTIMATED NET CAPITAL COMPUTATION AS OF JANUARY 4, 2013 BASED ON
END OF 2012 AUDITED FINANCIALS THAT REFLECTED THE CORRECT VALUE FOR THE DEFERRED TAX ASSET AND THE DISTRIBUTION. THE REVISED
CALCULATION REFLECTED A NET CAPITAL DEFICIENCY FOR THE FIRM THAT REMAINED IN EFFECT UNTIL FEBRUARY 28, 2013. ADDITIONALLY, FROM
OCTOBER 1, 2012 THROUGH FEBRUARY 28, 2013, THE FIRM FAILED TO MAINTAIN ACCURATE BOOKS AND RECORDS TO PROPERLY REFLECT THE BOOK
BASIS AMOUNTS FOR PARTNERSHIP INTERESTS SOLD IN OCTOBER 2012. CONSEQUENTLY, THE FIRM FILED INACCURATE FOCUS FILINGS FOR PERIODS

ENDING OCTOBER 31, 2012, NOVEMBER 30, 2012, DECEMBER 31, 2012, JANUARY 31, 2013, AND FEBRUARY 28, 2013.