Goldstone Financial Group, 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
CRD
Number:
6390276
This advisory affiliate is 
a Firm
an Individual
Registered:
Yes
No
Name:
PELLEGRINO, ANTHONY
(For individuals, Last, First,
Middle)
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) 
IDAHO DEPARTMENT OF FINANCE
2.
Principal Sanction:
Civil and Administrative Penalt(ies) /Fine(s)
Other Sanctions: 

3.
Date Initiated (MM/DD/YYYY): 
01/05/2022
 Exact
 Explanation
If not exact, provide explanation:
4.
Docket/Case Number:
2019-7-05-C
5.
Advisory Affiliate Employing Firm when activity occurred which led to the regulatory action (if applicable):
6.
Principal Product Type:
Other
Other Product Types: 
NOTE
7.
Describe the allegations related to this regulatory action (your response must fit within the space provided):
VIOLATION OF IDAHO CODE 30-14-502 BY MAKING AN UNSUITABLE RECOMMENDATION OF AN UNREGISTERED SECURITY TO ONE CLIENT WHO RESIDES
IN IDAHO.
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):
01/05/2022
 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: $ 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: 
FINE PAID IN FULL ON 2/4/2022
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 2017 A RECOMMENDATION WAS MADE TO A HUSBAND AND WIFE WHO HELD AN INSURANCE RELATIONSHIP SINCE 2013 AND HELD AN ADVISORY
RELATIONSHIP WITH THE FIRM SINCE 2015. WHEN THE RELATIONSHIP BEGAN THEIR RESIDENCE WAS IN ILLINOIS. SHORTLY BEFORE THE
RECOMMENDATION WAS MADE OF THE SECURITY IN QUESTION THE COUPLE RELOCATED TO IDAHO. THE HOUSEHOLD REMAINS A CLIENT AND
CONTINUES TO BE ADVISED BY THE FIRM ON THEIR INVESTMENTS.

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
CRD
Number:
6390276
This advisory affiliate is 
a Firm
an Individual
Registered:
Yes
No
Name:
PELLEGRINO, ANTHONY
(For individuals, Last, First,
Middle)
CRD
Number:
5900843
This advisory affiliate is 
a Firm
an Individual
Registered:
Yes
No
Name:
PELLEGRINO, MICHAEL,
AUGUST
(For individuals, Last, First,
Middle)
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) 
UNITED STATES SECURITIES AND EXCHANGE COMMISSION
2.
Principal Sanction:
Cease and Desist
Other Sanctions: 
CENSURE OF FIRM AND ANTHONY PELLEGRINO, CIVIL MONETARY PENALTY OF $70,000 PAYABLE BY THE FIRM, CIVIL MONETARY PENALTY OF $30,000
PAYABLE BY ANTHONY PELLEGRINO, BAR OF MICHAEL PELLEGRINO FROM AFFILIATION WITH INVESTMENT ADVISER, CIVIL MONETARY PENALTY OF
$50,000 PAYABLE BY MICHAEL PELLEGRINO

3.
Date Initiated (MM/DD/YYYY): 
03/28/2022
 Exact
 Explanation
If not exact, provide explanation:
4.
Docket/Case Number:
ADMINISTRATIVE PROCEEDING FILE NO. 3-20805
5.
Advisory Affiliate Employing Firm when activity occurred which led to the regulatory action (if applicable):
GOLDSTONE FINANCIAL GROUP, LLC
6.
Principal Product Type:
Other
Other Product Types: 
NOTES
7.
Describe the allegations related to this regulatory action (your response must fit within the space provided):
ON MARCH 28, 2022, THE FIRM AND ITS OWNER AND PRINCIPAL, ANTHONY PELLEGRINO, WERE THE SUBJECT OF AN ORDER INSTITUTING
ADMINISTRATIVE AND CEASE AND DESIST PROCEEDINGS (THE "ORDER") ENTERED BY THE SEC, TO WHICH THEY PREVIOUSLY CONSENTED WITHOUT
ADMITTING OR DENYING THE FINDINGS THEREIN, MAKING FINDINGS AND IMPOSING REMEDIAL SANCTIONS AND A CEASE AND DESIST ORDER FROM AND
BASED ON VIOLATIONS OF SECTION 206(2) OF THE INVESTMENT ADVISERS ACT OF 1940 AND SECTIONS 5(A) AND (C) OF THE SECURITIES ACT OF 1933.
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):
03/28/2022
 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: 
CENSURE OF FIRM AND ANTHONY PELLEGRINO, CIVIL MONETARY PENALTY OF $70,000 PAYABLE BY THE FIRM, CIVIL MONETARY PENALTY OF
$30,000 PAYABLE BY ANTHONY PELLEGRINO, BAR OF MICHAEL PELLEGRINO FROM AFFILIATION WITH INVESTMENT ADVISER AS OF MARCH 28,
2022, CIVIL MONETARY PENALTY OF $50,000 PAYABLE BY MICHAEL PELLEGRINO.
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).
AS DETAILED MORE FULLY IN THE ORDER, THIS MATTER ARISES FROM THE PERIOD MAY 2017 THROUGH JUNE 2018, DURING WHICH TIME THE FIRM,
ANTHONY PELLEGRINO AND MICHAEL PELLEGRINO, A FORMER MANAGER AND OWNER DISCUSSED BELOW, OFFERED AND SOLD AN INVESTMENT OF A
THIRD PARTY COMPANY CALLED 1 GLOBAL CAPITAL (1GC), WHICH FILED FOR BANKRUPTCY IN JULY 2018, AFTER WHICH THE SEC CHARGED 1GC AND ITS
OWNER WITH OFFERING AND SELLING 1GC INVESTMENTS AS UNREGISTERED SECURITIES, WHERE THERE WAS NO APPLICABLE EXEMPTION FROM
REGISTRATION, AS WELL AS MISREPRESENTATIONS REGARDING AMONG OTHER FACTS, THE USE OF INVESTOR FUNDS, THE VALUE OF THE INVESTMENTS
AND THAT THE 1GC INVESTMENTS WERE EXEMPT FROM THE REGISTRATION REQUIREMENTS UNDER THE SECURITIES LAWS. 1GC AND ITS PRINCIPAL
OWNER SUBSEQUENTLY SETTLED THE SEC'S CHARGES AGAINST IT. NEITHER THE FIRM, ANTHONY NOR MICHAEL PELLEGRINO WERE AWARE OF 1GC'S
MISREPRESENTATIONS AND INDEED WERE THEMSELVES MISLEAD BY 1GC AND ITS OUTSIDE SECURITIES COUNSEL. IN THIS REGARD, 1GC OBTAINED
OUTSIDE SECURITIES COUNSEL WHO PREPARED FALSE LEGAL OPINIONS AND WHO FALSELY MISREPRESENTED TO MICHAEL AND ANTHONY THAT THE
1GC INVESTMENT RETURNS WERE VALIDATED BY AN INDEPENDENT ACCOUNTING FIRM AND TOUTED LEGAL OPINIONS AUTHORED BY OUTSIDE COUNSEL
THAT THE 1GC INVESTMENTS WERE NOT CONSIDERED SECURITIES SUBJECT TO REGISTRATION. IN RELIANCE UPON 1GC AND 1GC'S OUTSIDE

SECURITIES COUNSEL, AND DESPITE EFFORTS TO CONDUCT THEIR OWN RESEARCH AND ANALYSIS REGARDING 1GC AND ITS INVESTMENTS INCLUDING
IN-PERSON MEETINGS AT 1GC, NUMEROUS COMMUNICATIONS WITH 1GC AND ITS OUTSIDE SECURITIES COUNSEL, THE FIRM, ANTHONY PELLEGRINO
AND MICHAEL PELLEGRINO OFFERED AND SOLD THE UNREGISTERED 1GC SECURITIES BETWEEN MAY 2017 AND JUNE 2018 TO GOLDSTONE CLIENTS AS
AN ALTERNATIVE INVESTMENT PRODUCT FOR THEIR CLIENTS' INVESTMENT PORTFOLIOS. IN DOING SO, THE FIRM, ANTHONY, AND MICHAEL ALSO DID
NOT ADEQUATELY DISCLOSE THE FEES THEY RECEIVED FROM 1GC TO THEIR ADVISORY CLIENTS INCLUDING THAT THEY RECEIVED REFERRAL FEES FOR
REFERRING CLIENTS TO 1GC, THE DISCLOSURE OF WHICH WOULD HAVE BEEN IMPORTANT IN DECIDING WHETHER TO INVEST IN THE 1GC INVESTMENT.
AFTER 1GC FILED FOR BANKRUPTCY AND WAS CHARGED BY THE SEC, THE FIRM AND ANTHONY PROVIDED FUNDS TO FACILITATE A SETTLEMENT WITH ALL
ITS CLIENTS WHO INVESTED IN 1GC, RETURNING THE REFERRAL FEES RECEIVED FROM 1GC IN ADDITION TO INSURANCE PROCEEDS. THE FIRM AND
ANTHONY ALSO ASSISTED ITS CLIENTS AT THEIR EXPENSE TO FILE PROOFS OF CLAIM IN THE 1GC BANKRUPTCY. THE FIRM ALSO HIRED A NEW CHIEF
COMPLIANCE OFFICER (WHO IS STILL HERE), CREATED A NEW DUE DILIGENCE COMMITTEE TO REVIEW AND APPROVE NEW INVESTMENT PRODUCTS,
REVISED RELEVANT POLICIES AND PROCEDURES INCLUDING PROHIBITIONS ON OFFERING ANY UNREGISTERED SECURITIES. IN ENTERING THE ORDER,
THE SEC CONSIDERED THE FIRM'S AND ANTHONY'S REMEDIAL EFFORTS PROMPTLY UNDERTAKEN AND COOPERATION AFFORDED THE SEC.