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IN THE FEDERAL DISTRICT COURT OF THE MIDDLE DISTRICT OF FLORIDA ORLANDO DIVISION

FINANCIAL INDUSTRY ASSOCIATION, G&G HOLDINGS, INC., RICHARD GOBLE, and THE GOBLE FIRST REVOCABLE FAMILY TRUST MAY 13, 1999, Plaintiffs,

CASE NO ______________

vs. JURY TRIAL DEMANDED SECURITIES AND EXCHANGE COMMISSION, FINANCIAL INDUSTRY REGULATORY AUTHORITY, INC. (FINRA), THE DEPOSITORY TRUST AND CLEARING CORPORATION (DTCC), MARY SHAPIRO, GRACE VOGEL, LARRY THOMPSON, TIMOTHY WARD, BRUCE BLATMAN, GEORGE FRANCESCHINI, and SAM LUQUE, JR., Defendants. ___________________________________________________/ COMPLAINT Plaintiffs FINANCIAL INDUSTRY ASSOCIATION, G&G HOLDINGS, INC., RICHARD GOBLE, and THE GOBLE FIRST REVOCABLE FAMILY TRUST MAY 13, 1999 ON BEHALF OF ITSELF AND NORTH AMERICAN CLEARING, INC., by and through their undersigned counsel, file this complaint for interference with business relations, abuse of process, defamation, and gross negligence against the above captioned individual Defendants, alleging as follows: PRELIMINARY ALLEGATIONS Jurisdiction 1. This is a complaint for damages exceeding the sum or value of seventy-five

thousand dollars, exclusive of interest and costs, between citizens of different states with each 1 
 

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Defendant either residing or maintaining its principal place of business in a state other than that of the Plaintiffs, and this Honorable Court possesses diversity subject matter jurisdiction pursuant to 28 U.S.C. § 1332. Parties and Other Important Persons and Entities 2. Plaintiff G&G HOLDINGS CORPORATION, INC. (hereinafter referred to as

"G&G") is a Florida for profit holding corporation with its principal place of business located at 1385 W State Road 434, Suite 102, Longwood, FL 32750. 3. Plaintiff THE GOBLE FIRST REVOCABLE FAMILY TRUST MAY 13, 1999

(hereinafter referred to as the "Goble Trust") is a revocable trust created by Richard Goble in 1999, with Richard Goble as trustee. The trust is also the sole shareholder of G&G Holdings, Inc., the Financial Industry Association, Inc., and North American Clearing, Inc. 4. Plaintiff RICHARD GOBLE (hereinafter referred to as "Goble") is a natural

person with offices located at 1385 W State Road 434, Suite 102, Longwood, FL 32750. Plaintiff Richard Goble was the director of North American Clearing Corporation when they were placed under receivership pursuant to the lawsuit filed by the Securities and Exchange Commission. 5. Plaintiff FINANCIAL INDUSTRY ASSOCIATION (hereinafter referred to as

"FIA") FIA was the largest and most successful advocate for small broker dealers in the United Sates and as a result of FIA’s potential takeover of FINRA’s Board from the New York Financial Cartel (“CARTEL”), FIA was chiefly responsible to the bylaw and name change of the National Association of Securities Dealers (NASD) to the Financial Industry Regulatory Authority (“FINRA”). FIA elected over 30 FINRA Board Members and Committeemen prior to its destruction by the defendants. Largely because of FIA’s efforts, there is another pending case


 

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directly accusing SEC, FINRA, and Mary Schapiro of fraud and is filed in the Southern District of New York Case No.: 07-CV-2014 (JSR). 6. Defendant SECURITIES AND EXCHANGE COMMISSION (hereinafter

referred to as "SEC") is an agency of the United States government with offices headquartered at 100 F Street N.E., Washington DC 20549. The mission of the Securities and Exchange Commission according to its website is to protect investors, maintain fair, orderly and efficient markets, and facilitate capital formation. The Securities and Exchange Commission, through its officers and employees, embarked on a program to deprive Plaintiffs of due process, and shut down and destroy the business enterprises of Plaintiffs in retaliation for certain political events that had been taking place. 7. Defendant FINANCIAL INDUSTRY REGULATORY AUTHORITY, INC.

(hereinafter referred to as "FINRA") is a Delaware private nonprofit corporation with its principal place of operations located at 1735 K Street NW, Washington DC 20006. FINRA is a Delaware corporation, registered with the Securities and Exchange Commission ("SEC") as a national securities association pursuant to the 1938 Maloney Act Amendments to the Securities Exchange Act of 1934 ("Exchange Act"), 15 U.S.C. §§ 78o-3, 78s(a)(1). FINRA has been commissioned by the financial industry to protect investors by making sure the securities industry operates fairly and honestly. FINRA failed to perform these duties when it deliberately and intentionally sought to interfere with the businesses of Plaintiffs without adequate cause, defame Plaintiffs, abuse process, and conduct a wholly inadequate and negligent investigation of NACI prior to recommending SEC action at detriment to Plaintiffs. 8. Defendant DEPOSITORY TRUST AND CLEARING CORPORATION

(hereinafter referred to as "DTCC"), is a New York for profit corporation with its principal place


 

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of business located at General Counsel's Office, 55 Water Street, 22nd Floor, New York, NY 10041. The corporation, through its subsidiaries, provides clearing, settlement, and information services for the financial industry. The DTCC, through its agent Larry Thompson, shut down the operations of NACI on the mere allegations of NACI employees Ward and Blatman immediately before the SEC filed injunctive relief against Goble, and without any investigation or consultation with the owner Goble. After being confronted immediately thereafter by Goble who explained the true and compliant state of the company, not only did Larry Thompson refuse to investigate the differing allegations before continuing to deprive NACI of its ability to operate, but also threatened Goble with more severe sanctions. 9. CARLTON FIELDS, P.A., while not presently a party to this lawsuit, (hereinafter

referred to as "Carlton") is a Florida professional association and a law firm with its principal place of business located at Corporate Center Three and International Plaza, 4221 West Boy Scout Boulevard, Suite 1000, Tampa, FL 33607. Carlton Fields presents itself as a firm that handles mass tort litigation, mergers, acquisitions, securities offerings, and bankruptcies among other areas of law. 10. SUTHERLAND, ASBILL & BRENNAN, LLP, while not presently a party to this

lawsuit, (hereinafter referred to as Sutherland Asbill) is a Georgia limited liability partnership whose principal place of business is located at 999 Peachtree Street, N.E., Suite 2300, Atlanta, GA 30309. It is a full service law firm and was the firm of the assigned receiver for North American Clearing, Inc. 11. Defendant MARY SHAPIRO (hereinafter referred to as "Shapiro") is the present

Chairman of the Securities and Exchange Commission. During the matters at issue in this suit, she was the Chairwoman of FINRA which was before that time known as the National


 

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Association of Securities Dealers (or NASD). Mary Shapiro was instrumental in setting in motion the intentional interference with Plaintiff's business operations. 12. Defendant GRACE VOGEL (hereinafter referred to as "Vogel") is the executive

Vice President of Member Regulation at FINRA. Grace Vogel was acting in consort with Mary Shapiro to interfere with Plaintiffs' businesses as a result of political activity of the Plaintiffs. Vogel was directing the FINRA investigators of NACI ("FINOPS"). 13. Defendant LARRY THOMPSON (hereinafter referred to as "Thompson") is the

managing director and general counsel of the DTCC and was responsible for gross negligence, intentional interference, and improperly shutting down Plaintiff's business operations. The DTCC, through its agent Thompson, shut down the operations of NACI on the mere allegations of NACI employees Ward and Blatman immediately before the SEC filed injunctive relief against Goble, and without any investigation or consultation with the owner Goble. After being confronted immediately thereafter by Goble who explained the true and compliant state of the company, not only did Thompson refuse to investigate the differing allegations before continuing to deprive NACI of its ability to operate, but also threatened Goble with more severe sanctions. 14. WILLIAM BRENNAN and FRANK CHANTAYAN, while not presently parties

to this lawsuit, (hereinafter referred to as "Brennan" and "Chantayan" respectively) are attorneys for the lawfirms Sutherland Asbill and Carlton Fields respectively. They represented Peter Anderson and Robert Gilbert. 15. PETER J. ANDERSON, while not presently a party to this lawsuit, (hereinafter

referred to as "Anderson") was the receiver assigned to North American Clearing in the SEC lawsuit, and attorney for the law firm Sutherland Asbill. He is responsible for gross negligence against the shareholders of NACI, failing to adequately protect the interests of shareholders, and


 

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promoting the filing of a fraudulent liquidation/bankruptcy action against NACI. He is responsible for gross negligence against the shareholders of NACI, and recommending a fraudulent and unnecessary bankruptcy proceeding to the SIPC by falsely representing the accounting and financial condition of NACI with the assistance of Sam Luque, Jr. and other employees of the receivership. 17. ROBERT GILBERT (hereinafter referred to as "Gilbert"), while not presently a

party to this lawsuit, is a natural person and an attorney shareholder at Carlton Fields, P.A. who was appointed trustee to administer the bankruptcy filed by the receiver in the SIPC action against North American Clearing, Inc. pending before the United States Bankruptcy Court. Mr. Gilbert has irresponsibility and with gross negligence allowed bankruptcy liquidation of NACI to continue unabated despite his knowledge that the financial condition of the company did not warrant such drastic action. 18. Defendant GEORGE FRANCESCHINI (hereinafter referred to as "Franceschini")

is a branch chief at the SEC and was responsible for coordinating and planning improper action that interfered with Plaintiffs' businesses. 19. Defendant TIMOTHY WARD (hereinafter referred to as "Ward) is a natural

person who was the Chief Financial Officer of North American Clearing, Inc. at the time the SEC began its action against Plaintiffs. He lied to the SEC regarding the activities of NACI, and under pressure from FINRA. 20. Defendant BRUCE BLATMAN (hereinafter referred to as "Blatman") is a natural

person who was the President of North American Clearing, Inc. at the time the SEC began its action against Plaintiffs. He lied to the SEC regarding the activities of NACI, and under pressure from FINRA.


 

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21.

Defendant SAM LUQUE, JR. (hereinafter referred to as "Luque") is a natural

person and an employee of the SEC, and the NACI receiver. Mr. Luque was originally an employee of the SEC, and upon information and belief now runs an independent consulting company that works with the SEC. Luque, with no formal accounting training or education, was hired by the NACI Receiver Anderson and the SEC to create fabricated NACI financials that were used in the NACI fraudulent bankruptcy filing in July 2008. PRELIMINARY BACKGROUND FACTS 22. Richard Goble opened a company called North American Clearing (NACI) in

1995, a business whose primary purpose was clearing transactions for broker-dealers (the corporation's latest annual report is hereinafter attached as Plaintiffs' Exhibit "A"). The business was not itself a broker- dealer but a place where transactions could be cleared efficiently. At the time of opening and until the present day, NACI was under the regulatory authority of NASD and now FINRA (since the merger of the New York Stock Exchange with NASD). 23. After Goble opened up his clearing business, a significant number of broker-

dealers and other member firms that were regulated by the National Association of Securities Dealers (NASD, now FINRA) became increasingly concerned at their diminishing voice within the self regulatory organization, and the increasingly burdensome regulations imposed on them by the SEC and NASD (now FINRA), making it more difficult for them to establish and maintain viable businesses. As a result, NACI decided to utilize its political rights within the organization to ensure the viability of small broker-dealer firms and NACI's customers. 24. Part of NACI's response was to organize and nominate candidates for local

FINRA district elections around the country, beginning with the district covering the southeastern United States.


 

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25.

In response to these issues, Goble opened the Financial Industry Association

(hereinafter referred to as "FIA"), a Florida domestic for profit corporation founded in February 2006 that has been mainly involved in selecting and determining appropriate candidates for board seats in the regional districts of NASD (now FINRA), and in attempting to secure these positions to ensure adequate representation for small broker-dealer firms and as directed by the Maloney Act of 1938 and the NASD charter of 1939. 26. Candidates that ran under the guidance and direction of the FIA were largely

successful, and in 2006 two of three FIA picked candidates were elected NASD Board of Governor seats. This was a remarkable accomplishment given the history of the NASD (now FINRA). The one candidate to lose, Goble himself, continued to organize and galvanize the small firms into asserting their rights within NASD. It was later discovered the possible reason for Goble's defeat is that Schapiro, then Chairman of FINRA, had allowed many of Goble’s faxed ballots to be uncounted or discarded. This clearly showed the bias of many in power at FINRA that FIA was exposing. 27. The FIA also spearheaded a petition in 2006 demanding the investigation of

NASD (now FINRA) for abusing its powers in favor of large firms against small firms, especially regarding NASD (now FINRA) audits. It also requested the resignation of NASD's (now FINRA's) then chief executive Schapiro for being blatantly aligned with the large Wall Street firms' interests. 28. As a result of the election activities of the FIA, the regional districts and board of

governors of NASD (now FINRA) were coming increasingly under the influence of the small firms, with the ultimate goal of the FIA to free up burdensome and unfair regulations on these businesses.


 

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29.

In August 2006, the FIA spearheaded further election activities and announced it

would be selecting independent candidates to contest the handpicked NASD (now FINRA) candidates in every regional and national position. This was an unprecedented move in the history of NASD (now FINRA). 30. At the time these activities and elections were taking place, Mary Schapiro was

Chief Executive of NASD (now FINRA). Mary Schapiro, realizing that small broker-dealer firms were beginning to gain increasing influence in the regional districts within NASD, and having had her position within the organization protected through the influence of Goldman Sachs and other large financial corporations, including the main Wall Street financial services firms, became increasingly intent on working within NASD to reduce the influence the activist small firms were having over policy and regulatory decisions. 31. Mary Schapiro met with Goble and and John Busacca, NACI’s president and the

co-founder of FIA in Spring 2006 over lunch, explaining that Goldman Sachs and other large financial institutions "paid NASD's bills", and for this reason Schapiro was insisting that FIA cease attempting to nominate its own members for election to NASD Committee and Board seats. No FINRA large clearing firm President had ever received any similar Wells notice in history. 33. During this time many small firms were being threatened with audits and other

burdensome oversight, even to the point of being shut down, to the extent that they were cooperating with FIA and its attempts to secure a more prominent voice for small firms within the organization. These threats extended to Richard Goble and NACI. Most of the audits and disciplinary acts were either completely specious or for minor infractions that could have been easily resolved.


 

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34.

Two days after Mr Busacca of the FIA announced that all FINRA Board seats

would be contested in the late 2006 election, a "Wells Notice" was issued against Mr. Busacca and Goble. This notice is supposed to be sent by NASD (now FINRA) when it suspects that illegitimate and illegal activities are taking place in a particular firm under its authority. It declared "the staff has made a preliminary determination to recommend that disciplinary action be brought against North American Clearing (NAC) and the individuals below for various violations of NASD and other applicable rules and regulations… (1) NAC prepared inaccurate customer reserve formula computations and failed to make required deposits to its special reserve account, and failed to notify NASD of its failure to make such required deposit…" (attached as Plaintiff's Exhibit "B"). 35. At this point, it was becoming clear that the NASD and its financial backers like

Goldman Sachs' response to the petition that was organized by FIA were hostile. Many of the firms that signed the petition began to be promptly audited by FINRA for insignificant reasons. 36. The petition was hand delivered to Mr. Robert Colby of the SEC and hand

delivered in four individual private meetings with Goble to four SEC Commissioners appointed by the President of the United States, and Barney Frank Chairman of the House Financial Committee in a private meeting with the FIA, and to a staff member of Senator Jack Reid Chairman of the Senate Financial Committee. Aside from audits of the firms that signed the petition, it was wholly ignored by the SEC and no response was forthcoming. 37. The FIA petition was increasing pressure on Mary Schapiro to resign, and she

began using her position within NASD (now FINRA) to resist this pressure. Through her authority, numerous small firms were being audited, including those who signed the petition.

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Part of her strategy, developed in consort with the large Wall Street firms, was to merge the NYSE (owned by Goldman Sachs) with the then NASD (now FINRA). 38. Two weeks after the August 2006 FIA nomination announcement, and twelve

days after the issuance of the "Wells Notice" to NACI, NASD (now FINRA) under the direction of Mary Schapiro announced their intention to merge NYSE regulatory division owned and controlled by Goldman Sachs and NASD (now FINRA) into the new self regulatory organization to known as the "Financial Industry Regulatory Authority, Inc." or FINRA. 39. FIA and its supporters immediately began to fight the proposal, because it

reduced the small firm representation on the board of governors to a mere three seats, as opposed to the original possible maximum of twenty-four seats. 40. Given the majority ownership control of NYSE by Goldman Sachs, the merger

would also in this way serve to solidify the influence of the large broker-dealers. In short, the ability of small broker-dealer firms to ensure viable representation in making decisions over their own regulation would be severely curtailed or would end altogether. 41. During the election following FIA's announcement to contest all open district

seats and announcement of the planned NYSE/NASD merger, FIA candidates are elected to twenty-one of the thirty-five nationwide regional seats. This was again a stunning victory for small firms in their quest to fairly regulate themselves. 42. This huge success of FIA was the catalyst for the elimination of the small firm

voting rights and small firm control of the NASD, as directed by the United States Congress. Removing small firm voting rights became a high priority for Mary Schapiro, Goldman Sachs, and all of the other involved large firms.

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43.

After the announcement of the proposed NYSE/NASD merger, the FIA and the

Independent Broker Dealer Association (hereinafter known as "IBDA") again called for the resignation of Shapiro and her top management in December 2006 through a vote of no confidence among member firms. This vote was solicited in response to the proposed NYSE and NASD (now FINRA) merger. The press release announcing the vote is attached and incorporated as Exhibit "C". 44. One month later, in January 2007, Shapiro and supporters hired an aggressive

proxy firm to threaten small broker-dealers into voting for the merger. This was accomplished by offering the carrot of thirty-five thousand dollars ($35,000) payment to small firms, based on the money that already belonged to the small firms through their membership ownership of FINRA, if the merger was approved. Advertisements and flyers of NASD's efforts are attached as Plaintiff's Exhibit "D". 45. In addition, FINRA and SEC enforcement officers responsible for investigations

and audits were enlisted to solicit "get out the vote" calls to member firms, which served the double purpose of notification and intimidation. The FINRA announcements carried the implication that their support was necessary, or "anything could happen", including a haphazard and uncertain regulatory future for the small firms, and retaliation for failure to cooperate. 46. Shapiro traveled the country in January seeking to influence small firms to

approve the merger. Notifications of merger details issued by Shapiro were filled with deceptions and misrepresentations. It indicated that the minimum amount of small firm representation would increase, but failed to indicate that total small firm representation would likely be reduced. It also deceptively failed to indicate the reasonableness of any potential payout to the small firms for approving the merger.

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47.

In reality, FIA believed board membership would now be limited to three seats for

small firms, most of the remaining being essentially handpicked representatives of the large Wall Street firms. By January 22, 2007 the merger had been approved over the protestations and activism of FIA and its allied organizations. 48. Soon after Shapiro's national tour, Goble on behalf of NACI and FIA met with

commissioners of the SEC to see what could be done about the proposed merger. Annette Nazareth, Raul Campos, Paul Akins and Kathleen Casey individually attended the private meeting. 49. Nazareth bluntly informed FIA at the meeting that the merger was being

promoted by the Wall Street firms, done to solidify their interests and curtail the recent successes of the small firms in winning elections to regional and board seats, and eventually in the hope of running many of the small firms into insolvency. 50. Nazareth further indicated that the Wall Street firms had no intention of

complying with the Maloney Act of 1938 (Section 15A of the Securities Exchange Act of 1934particularly subsection b(4)), which required fair representation of all member firms. She indicated that FINRA was the means by which the large Wall Street firms would ensure their influence, and hoped to make it almost impossible for small firms to retain their present influence. 51. In August 2007, FIA and IBDA again announced their intent to offer candidates

for all open seats in that year's elections, this time for a total of seven seats. 52. After this announcement, NACI and Busacca who were both fighting through the

FIA and IBDA for the rights of small firms and helped make the announcement, were both cited in a FINRA regulatory complaint on August 13, 2007. The allegations on which the complaint

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was based were again mostly unfounded or minor (Exhibit "E"). FIA, NACI, and IBDA felt that they were being deliberately targeted. 53. In September 2007 FINRA issued a letter (attached as Exhibit "F" and

incorporated by reference) to NACI that it was staying any further disciplinary proceedings based upon its prior 2006 "Wells Notice", after being unable to find any relevant required evidence to continue the investigation. 54. This demonstrated the speciousness of the original Wells Notice. Nothing in this

letter indicated abating, cancelling, or modifying the new disciplinary action initiated in August 2007. In short, it appeared FINRA was throwing allegation after allegation at NACI in order to wear Plaintiffs down, and the moment one specious investigation was closed a new one seemed to begin. 55. At this same time (late 2007- 2008) it was becoming clear to FINRA insiders and

Plaintiffs that massive fraud was being perpetrated by the large financial services firms on Wall Street, including Goldman Sachs, regarding their activities and leveraging before the now wellknown late 2008 financial crisis. 56. FIA's position was that FINRA had done nothing to investigate or discipline these

firms for their irresponsible violations of numerous FINRA rules. In fact, FINRA appeared to be covering up the activities of these firms for as long as possible. 57. FIA, through Goble and his membership on the board of FINRA, threatened to

publicize the huge discrepancy between FINRA's minor discipline of these large firms for their serious transgressions of FINRA regulations, and the FINRA's overbearing discipline against the small broker-dealer firms. It was during the climate of these discussions and arguments that all of the following allegations take place.

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FACTS FROM FINRA'S MARCH- MAY 2008 AUDIT 58. In March 2008, FINRA began its annual audit of NACI. During its audit, FINRA

representatives communicated mostly with Blatman (the President) and Ward (the CFO) of NACI. 59. While initially the investigation seemed to turn up nothing extraordinary,

eventually FINRA claimed to uncover damning information relating to NACI apparently experiencing a "financial crisis", unauthorized trades occurring in customer accounts in order to generate cash funds for operations purposes, and manipulating the firm's account processing system by recording $5.1 million in money market purchases without offsetting this amount by the money market sales in order to keep available funds for operating expenses at their maximum level. All of these allegations were unfounded. 60. While purporting to be a legitimate investigation, this investigation was actually

requested and directed by Shapiro and Vogel. This was ultimately due to the pressure of Goldman Sachs and other "cartel" Wall Street firms. 61. At this time while Goble was the only non-hand picked member of the FINRA

Board of Governors , and was also seen by Schapiro and the Firms as the perfect opportunity to shut down FIA and its successful operations to ensure fair representation for small member firms in the board and regions would never happen or would be delayed for a very long time. 62. At the time of the FINRA investigation that lead to SEC's federal court complaint,

Ward was delinquent in his child support payments by over $30,000 as calculated by the child support enforcement agency of his original state of Wisconsin. Ward had been moving from job to job throughout the country in an attempt to evade these obligations.

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63.

NACI and Goble were contacted by the child support enforcement agency about

the time of the FINRA audit. Ward at this time was fearful of being terminated by NACI because of the child support issue. 64. The recent revelation of Ward's child support issues to NACI and Goble, coupled

with a minor miscalculation Ward made in May 2008 concerning NACI's reserve compilation, induced him to invent a false story about the insolvency of NACI while under pressure from FINRA regulators to "tell all" or face the loss of his job. 65. FINRA regulators exaggerated the seriousness of the violations of Ward's

mistaken reserve miscalculation in their interviews with Ward. They hoped that he would succumb to pressure and reveal any additional information about NACI's possible violations. 66. Ward, nervous he could be fired by NACI at any time after the discovery of the

child support evasion problem, and lose his job as CFO of the company- devised a plan with Blatman (the President of NACI) to fabricate additional false allegations and lie to FINRA. 67. Ward and Blatman were hoping their cooperation with FINRA regulators and

FINOP investigators would enable them to completely control NACI. They felt their positions would be preserved with a new corporate management introduced by the SEC, and the loss of Goble. Ward also faced arrest by the State of Wisconsin for child support evasion should he be fired by Goble. 68. Ward's miscalculation of the May 2008 reserve compilation caused him to be

threatened by FINRA with severe sanctions unless he fully "cooperated" to bring down NACI and expose any other violations. 69. Ward's inexperience in the industry made him oblivious that these threats from

FINRA were without basis, as threats rarely if ever carried out. Ward did not realize that without

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an intention to defraud these were minor mistakes and rule violations that likely would not result in any serious sanctions. 70. Ward also saw advantages to his own career, and used this opportunity to

fabricate deliberate unauthorized money market transfers stories, combined with his false claim of corporate insolvency. 71. Increasing EBOC reserves were required to be held in May 2008 as FINRA's

requirements became more and more stringent. 72. Before the investigation, in early 2008, a number of "trade breaks" occurred at

NACI. These trade breaks were the result of software glitches as NACI was instituting new financial software. In addition, FINRA's 2007 complaint filed against NACI was being resolved at this time. This complaint alleged insufficient funds in the EBOC accounts. 73. At the suggestion of the SEC, it was determined that NACI was able to

recalculate and recategorize some of the EBOC calculations, and that when this was done they were found to have the required sufficient funds. 74. In May 2008 a particular trade break occurred that attracted the attention of the

FINOP investigators. As part of the ordinary course of business, Richard Goble as owner of NACI, along with Blatman and Ward, sought to obtain an approximately five million dollar loan from the firm's bank, to purchase money market positions and decrease the required regulatory reserve amounts. These freed up funds would assist the firm in its ordinary clearing obligations, but were preventative only, and were not required for the company to survive on a day to day basis.

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75.

The bank declined to extend the loan. Faced with this, Blatman and Ward should

have reversed a corresponding money market purchase that they had initiated, in order to ensure reserve account amounts were adequate. 76. Unlike prior "trade breaks" which were really differences based on how the

reserve amount should be calculated, Blatmann honestly forgot to reverse the transaction when the loan was not approved, and when Ward calculated the reserve requirement, the calculation erroneously indicated funds could be withdrawn from the reserve account. 77. As a result, the funds were erroneously withdrawn and the EBOC account was

underfunded. This was not intentional or deliberate on the part of NACI. The ongoing FINRA audit in less than 24 hours discovered this erroneous withdrawl from the reserve account. Since the withdrawal was purely erroneous, this constituted a "trade break", or an unintended error that should not result in serious sanctions from FINRA. 78. Yet FINRA, as part of its investigation, intimidated the inexperienced Ward and

Blatman into "wrongfully confessing" that the entire scheme was intentional, and that NACI was somehow insolvent. 79. These unintentional "trade breaks", including ones involving millions of dollars

for small firms, happen on occasion without ever resulting in any significant sanctions. 80. Under pressure from FINRA regulators, Ward lied about the supposed insolvency

and capital deposit requirement of NACI. These allegations of insolvency and intentional fraud were later determined to be falsehoods by Plaintiffs and their counsel then appearing in the SEC proceedings. 81. After the audit and "investigation" of the FINOPS, Schapiro was faced with a

situation that could be turned into an opportunity to shut down the head of FIA and the voice for

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small firms within FINRA. She immediately pressured the SEC to file a complaint for an injunction against NACI based upon scanty and unreliable evidence and no clear independent evidence of any intentional act of fraud on customer accounts. FINRA knew it was relying upon hastily gathered evidence, and an incomplete investigation. 82. Shapiro and Vogel also intended to destroy and interfere with the contracts and

business relationships of NACI, G&G Holdings, and FIA relating to their customers and constituents. They did this by recommending that the SEC, on scanty evidence and without a more thorough investigation, file an action for injunctive relief against NACI and Goble. 83. Thompson, acting on behalf of the DTCC, shut down NACI a day prior to the

SEC filing, and also threatened NACI directly with being permanently shut down, even after Goble and NACI showed Thompson that it could make a reserve deposit at any time, and that the cash position of the firm was sound. 84. Thompson, in concert with Shapiro and Vogel of FINRA and on behalf of DTCC,

intended to destroy and interfere with the contracts and business relationships of NACI, G&G Holdings, and FIA regarding their customers and constituents. Larry Thompson acted to interfere by shutting down NACI a day before the SEC action was filed. Thompson, as general counsel of DTCC, issued the letter suspending NACI access to DTCC. (DTCC letter to NACI declaring suspension of access is hereinafter attached as Plaintiff's Exhibit "G") 85. Thompson's career had been assisted by the large Wall Street firms, he was aware

of the political conflict within FINRA between FIA and the large Wall Street firms, and he deliberately decided to aid and participate in Shapiro's attempt to destroy NACI.

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86.

He did this ultimately from the pressure of the Wall Street firms. Thompson

deliberately lied to the board of the DTCC, falsely informing them that NACI was insolvent, despite being clearly shown that the firm was completely viable. 87. The SEC action (Case No. 6:2008-CV-00829) was filed and served on May 27,

2008 by the SEC under the direction of Shapiro and Vogel, alleging improper liquidation of customer accounts to save NACI from insolvency. It was based entirely upon the allegations of Ward and Blatman, without any corroboration from Goble, or questioning of Goble. 88. Prior to filing the complaint, Goble was always able to clearly explain and

demonstrate to FINOP investigators how NACI was complying with the FINRA audit and federal regulations. 89. Without any substantiation, and only based on the testimony of Ward and

Blatman and a few vague financial statements, FINRA recommended the SEC file a civil action against NACI to subject it to a temporary restraining order and then eventually shut it down entirely (the original complaint and memorandum of law for temporary restraining order (Case No. 6:2009-CV-00829 are hereinafter attached and incorporated as Exhibit "H"). 90. In this complaint, the SEC alleged that the EBOC accounts were not holding the

reserves required by federal regulations. This was incorrect. The EBOC accounts were holding the required amount. FINRA and SEC during their investigations, and with Ward's help, were calculating them a different way than NACI had previously done. NACI's calculations were also a valid way to calculate the required reserve amounts, and was a method given directly by the FINOP regulators to Ward. 91. Ward knew about both methods of calculating the reserve and used this to his

advantage in accusing NACI of deliberately violating federal regulations. Deposition testimony

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from Ward regarding the two or even more ways to calculate the reserve amount authorized by regulations is hereinafter attached as Plaintiff's Exhibit "I". 92. An occasional miscalculation of the EBOC reserve account would not have been a

serious matter had not Ward and Blatman also accused NACI of sweeping customer money market accounts and moving these amounts into its firm's operating accounts. These allegations also formed the basis of the SEC's complaint. 93. The SEC knew that these allegations were not founded on other readily available

evidence. Additionally, the SEC sought no explanation from Goble. They did not even attempt to question Goble to help resolve these issues. The sweeps and transfers alleged in the SEC complaint never occurred. No money was ever at any time used to pay NACI's operating expenses. 94. The account statements provided as exhibits in the SEC suit showed nothing

except that an erroneous transaction had occurred. 95. In reality, all transfers from money market to cash positions and back were

documented on all customer statements. The initial agreement signed by all clients indicated that these transactions could take place, and all customers consented to these transactions. Luque in his deposition pursuant to the original SEC action admitted that NACI would have the right to liquidate money market funds for certain allowed purposes, including the purposes actually used by NACI (a copy of the relevant pages of this deposition is hereinafter attached as Plaintiff's Exhibit "J"). 96. No transfer was ever made to prevent the firm's insolvency. The transfers were

made in the ordinary course of business as preventative measures. At no point was the business

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facing imminent insolvency or a crisis. Testimony from Ward basically admitting as much is attached as Plaintiff's Exhibit "K". 97. Any transfers and sweeps of money market accounts were permitted according to

NACI's agreement with its clients, where it specifically mentions that NACI reserved the right to transfer money between the money market and other accounts (see Plaintiff's Exhibit "L"). 98. The sweep accounts were not business operating accounts, but other allowed

accounts including margin debts, fails to receive and deliver, and the DTCC settlement account. At no time did NACI use client funds to pay its operating expenses because of insolvency. 99. Schapiro and Vogel knew that the case resulting from the investigation they

headed was without solid basis. The proceeding was intended to interfere with and destroy NACI's business relationships. The SEC aggressively pursued the case against NACI, asking on ex parte motion, without any opportunity for NACI or G&G Holdings to properly respond, that a temporary restraining order/injunction be imposed on the company. 100. A receiver was also requested for NACI. At no time before the ex parte actions

by the SEC did the SEC even attempt to communicate with Goble about any of the false allegations from Blatman and Ward. It is clear that the SEC was never seeking the truth about Ward's and Blatman's false allegations. 101. On the same date (May 27, 2008), two motions- the Emergency Motion for

Temporary Restraining Order, and Emergency Motion to Appoint Receiver- were filed by the SEC. 102. Receiver Anderson of Sutherland Asbill was appointed for NACI. Through

appointment of the Receiver, Goble was denied access to his e-mails, records, statements and other important items, including many items that related to the political activities of FIA. Thus,

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on the very same day, the judge in the case entered orders implementing the SEC's requests. Defendants had no time to respond to these motions. NACI's business was immediately interrupted and the company began losing substantial revenues. 103. Ultimately, the goal of Shapiro, Vogel, Anderson, and Cartel was to use the

Receiver to keep Goble from important FIA records and activities, immediately remove Goble from FINRA’s Board of Governors, and eventually use the Securities Investor Protection Act of 1970 to force NACI into fraudulent bankruptcy referral. This was intended to forever destroy Goble's influence in the industry. 104. FINRA's ultimate goal of forcing NACI into and fraudulent bankruptcy and

liquidation was implemented by the formal application of the Securities Investor Protection Corporation filed and served in the SEC action by Securities Investor Protection Corporation (SIPC) lawyers (Case No. 6:2008-CV-00829) on July 24, 2008. This was a formal SIPC application for a protective decree filed pursuant to 15 U.S.C. §78eee(b)(1)(B). 105. The misguided and fraudulent liquidation proceedings began a mere two months

after the filing of the original action. Four days after the SIPC application was entered, Judge Scriven ordered the case transferred to the United States Bankruptcy Court for the Middle District of Florida, and the appointment of Gilbert as Trustee to oversee the continued liquidation of NACI. 106. SIPC requested this decree at the direction of the SEC. SIPC performed its

functions grossly negligently, failing to seek a protective decree in the proper manner. SIPC, through its employees and agents, sought to interfere with the business of NACI by filing a frivolous action based upon unreliable evidence including negligently and fraudulently prepared

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financial statements and coerced witnesses who received substantial amount of wages and bonuses from the SEC for their testimony. 107. This included Blatman and Ward who were paid more than their average normal

wages by the SEC after the ex parte TRO and ex parte Receiver were put in place under false pretenses. 108. SIPC based its action for the protective decree on the financial statements of

Luque, at the time an employee of the SEC. Luque had no formal accounting education. The financial statements falsely purported that NACI was insolvent to the extent of 2.5 million dollars, when in fact it was solvent by approximately 3 million dollars. The fraudulent and false financial statements are hereinafter attached as Exhibit "M". 109. Based upon these fraudulent and negligently prepared financials, ultimately

designed for shutting down and interfering with Plaintiffs' businesses including NACI and FIA, the protective order was entered in the SEC case and bankruptcy liquidation was allowed to proceed under Bankruptcy Case No. 6:08-ap-00145-KSJ. 110. Luque has no formal education and no degrees in the field of accounting. SIPC

based its request for protective order on the basis of financials filed by someone with no formal accounting training. 111. SIPC conducted its own professional financial analysis after the bankruptcy

filing. These financials were provided to Gilbert. Gilbert's SIPC financials, in October, 2008, clearly demostrated that NACI had actually been solvent to the extent of approximately three million dollars.

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112.

There was thus a vast difference between the fraudulently prepared financials of

Luque's analysis commissioned by the receiver at the request of the SEC, and SIPC's prepared financials after the protective order had already been entered. 113. Despite becoming aware of these new financials soon after the protective order

was entered, Gilbert as Trustee of the estate continued to liquidate Plaintiffs' businesses pursuant to the protective order. Gilbert intentionally continued to liquidate the business even after finding that the protective order had no basis. No motion to reconsider the protective order was filed, and nothing was accomplished to mitigate damages to Plaintiffs as a result of the loss of NACI. 114. Plaintiffs have since hired an expert to review the financials and this expert has

independently concluded that NACI's financials were not violating FINRA or SEC regulations such as to warrant the action that was taken against NACI. The report of the expert is hereinafter attached as Plaintiff's Exhibit "N". COUNT I AGAINST ALL DEFENDANTS- TORTIOUS INTERFERENCE WITH PLAINTIFFS' BUSINESS RELATIONSHIPS 115. 116. Plaintiffs reallege and reincorporate paragraphs 1 through 114 herein. All Defendants, jointly and severally, did intend and did interfere with the

business relationships of Plaintiff. Defendants knew that NACI had multiple valuable contracts with numerous clients. These contracts were also essentially the business relationships of Plaintiffs The Goble Trust and Goble, who took substantial efforts to forge these relationships with NACI and profit from them. 117. FINRA, through its agents Schapiro and Vogel, conducted deliberately fraudulent

and irresponsible investigation practices in order to interfere with Plaintiffs' business, and recommended to the SEC the filing a frivolous injunction action designed to destroy NACI's 25 
 

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operations. FINRA's investigations were unjustified and intended to deter NACI's present clients from continuing to place confidence in the business activities of NACI. 118. Plaintiffs, through NACI, had developed and fostered numerous relationships

with broker-dealers across the country. These relationships were the source of income for NACI and ultimately for Goble Trust. 119. FINRA, through its agents Schapiro and Vogel, conducted a wholly baseless and

improper investigation. FINRA failed to investigate all the information readily available to it before filing its complaint in federal district court. When the complaint was filed, NACI's and Goble Trust's business relationships with its present clients were for all intents and purposes effectively annihilated. 120. Once the injunction was filed, Anderson and Sutherland Asbill conducted the

receivership with the ultimate view to the destruction of Plaintiffs' stock value in NACI, by liquidating and closing down accounts, and destroying the relationships developed between NACI and its member broker-dealer companies. 121. Once the SIPC liquidation proceeding was initiated, Gilbert and Carlton Fields

unjustifiably conducted the fraudulent bankruptcy proceeding with a view to forever destroying NACI's business relationship with its clients through the liquidation. 122. Defendant Luque deliberately assisted the receiver in fabricating false financial

statements about NACI in an attempt to reduce the confidence of NACI's clients and destroy its business relationships, ultimately with a view to sending the company into SIPC liquidation proceedings. 123. As a result of Defendants' actions, Plaintiffs' business relationships through NACI

and on behalf of themselves were all destroyed. The destruction of these relationships have

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resulted in substantial lost revenue to NACI, future dividend and distribution income to Plaintiff Goble Trust through its ownership of NACI, lost rent to G&G Holdings, indirectly caused the destruction of the property of FIA, as well as the destruction of Plaintiff Goble Trust's stock value in NACI, all to the extent of one hundred million dollars or more. WHEREFORE Plaintiff requests against all Defendants compensatory damages in the amount of one hundred million dollars, costs of this suit, and such other and further relief as this Honorable Court deems proper. COUNT II AGAINST SEC AND SIPC- ABUSE OF PROCESS 133. 134. Plaintiff realleges and reincorporates paragraphs 1 through 114 above. Defendant SIPC, through its agents, in filing its recommendation for protection,

did issue process and suit against NACI for a purpose other than the intended litigation- namely to assist FINRA and the SEC in shutting down NACI, and through that Goble and FIA's participation and activism on the FINRA board. 135. Anderson and Sutherland Asbill, in deliberately continuing to conduct

receivership proceedings of NACI and recommend the liquidation of NACI, engaged in litigation other than for its intended purpose- namely for the improper and unnecessary purpose of shutting down NACI no matter what the finances and accounting of the company indicated would be in the best interests of creditors and shareholders. 136. Gilbert and Carlton Fields, in deliberately continuing as Trustee to conduct

bankruptcy liquidation proceedings against NACI and throughout the proceedings continuing to liquidate NACI, engaged in litigation before the Courts other than for its intended purposenamely for the improper and unnecessary purpose of shutting down NACI no matter what the

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finances and accounting of the company indicated would be in the best interests of creditors and shareholders at the time. 137. As a result of Defendants' actions, Plaintiffs were collectively damaged to the

extent of millions of dollars. As a result of Defendants' actions, Plaintiffs' business relationships through NACI and on behalf of themselves were all destroyed. The destruction of these relationships have resulted in substantial lost revenue to NACI, future dividend and distribution income to Plaintiff Goble Trust through its ownership of NACI, lost rent to G&G Holdings, indirectly caused the destruction of the property of FIA, as well as the destruction of Plaintiff Goble Trust's stock value in NACI, all to the extent of one hundred million dollars or more. WHEREFORE Plaintiffs request against all Defendants SEC and SIPC compensatory damages in the amount of one hundred million dollars, costs of this suit, and such other and further relief as this Honorable Court deems proper. COUNT IV AGAINST ALL DEFENDANTS- GROSS NEGLIGENCE 138. 139. Plaintiff realleges and reincorporates paragraphs 1 through 114 above. Defendants and their agents, through their actions at various stages before and

during the SEC proceeding against NACI, each breached a duty of care they had toward Plaintiffs. These breaches of this duty of care constituted not mere negligence only, but gross negligence. 140. Defendants FINRA and SIPC had a duty to Plaintiffs to thoroughly and fairly

investigate all claims suspected or arising pursuant to their regulatory authority. Defendants had a duty to be impartial and fair in their evaluation of the evidence, and only impose sanctions and issue process it was validated by evidence of violations.

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141.

At the very least, SIPC had a duty to ensure the financials of NACI were being

accurately assessed and justified a bankruptcy liquidation of the company prior to initiating bankruptcy proceedings. 142. Defendant FINRA breached its duty to Defendants when Defendant FINRA

misleadingly recommended to SEC that the action for relief be filed in Federal District Court. Defendant failed to adequately investigate the allegations of Ward and Blatman, and compile all relevant evidence (including thoroughly interviewing Goble) before making this hasty recommendation to the SEC. 143. FINRA was not only negligent, but grossly negligent and was aware that there

was considerable risk no action worthy of sanctions had taken place. FINRA knew there was considerable risk in not interviewing Goble and seeking a proper explanation from all of NACI's officers. 144. Defendant SIPC breached its duty to make a thorough and accurate accounting of

NACI and determine that its recommendation for liquidation/bankruptcy proceedings was truly in the best interest of creditors. SIPC failed to make this accurate and proper accounting, and used inaccurate information. SIPC was not merely negligent, but grossly negligent and knowingly failed to fulfill all of its obligations under the statute. SIPC proceeded knowing the substantial risk that there was not enough evidence to proceed. 145. Carlton Fields, Gilbert, Sutherland Asbill, and Anderson all negligently

contributed to the unnecessary destruction of NACI by failing to address the issue of NACI's solvency, and appropriately fulfill their fiduciary duties to the company's creditors, shareholder and clients when it was determined that NACI was not insolvent or facing financial distress that would or could harm the various interests in the company.

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146.

Carlton Fields, Gilbert, Sutherland Asbill, and Anderson failed to stay, abate, or

otherwise appropriately address the continued dismantling of NACI when it was realized NACI was never in danger of insolvency, distress, or a danger to its clients, creditors, and shareholders. They had a fiduciary and common law duty to NACI's shareholders to manage the company appropriately. 147. These Defendants were not only negligent, but also grossly negligent in that they

were aware there was a substantial risk that the dismantling of NACI was not being done in the interests of creditors and shareholders. 148. These Defendants failed to adequately manage the company and determine the

extent of its solvency, as well as the propriety and necessity of dismantling the company in bankruptcy proceedings or pursuant to the receivership. 149. Defendant Thompson decided to shut down the operations of NACI prior to the

SEC filing without proper or adequate investigation into the matter. Thompson had no intention of conducting an appropriate investigation into the allegations and recklessly was the first to shut down the operations of NACI, even before the action and injunction were filed by the SEC. 150. As a result of the decision of Thompson, the DTCC failed to abide by its own

standards and regulations in the closing of NACI, and failed to perform its applicable duty to fairly regulate NACI's industry and protect NACI and its shareholders from unfair practices of the agency. 151. Defendant Thompson was even contacted by owner Goble who attempted to

explain that no violations were occurring. Thompson not only refused to listen to Goble's explanation, but threatened that NACI would be permanently dismantled and liquidated if Goble

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sought to file an appeal within the DTCC against Thompson's temporary order to shut down NACI. 152. Thompson knew there was substantial risk that NACI and its shareholders would

be unnecessarily harmed by his threats and actions against the company. Thompson therefore engaged in gross negligence. 153. Defendants Ward and Blatman intentionally misrepresented the internal

operations of NACI. They also spoke regarding issues of which they had no knowledge to SEC and FINRA investigators, recklessly made numerous unfounded allegations against NACI, and breached their duties as employees of NACI and in their service to NACI's clients. Defendants' actions were therefore grossly negligent. 154. Defendant Luque engaged in improper accounting practices in fashioning and

summarizing the books of NACI, and failed to carefully compile the recordkeeping of NACI to present an accurate picture of the company's solvency. Luque, Jr. failed to accurately determine the condition of NACI pursuant to the duties of his employment under the receiver, and thereby breached his duties to the shareholders of NACI, by failing to act in the best interest of the company. 155. All of the Defendants' acts of negligence described in these allegations

proximately caused the damages suffered by Plaintiffs. These damages were the foreseeable results of Defendants' breaches of duty. 156. As a result of Defendants' negligence, Plaintiffs have been damaged to the extent

of millions of dollars due to loss of corporation share value through the dismantling of NACI, loss of rental revenues, loss of prospective corporate earnings and distributions, and loss of assets of the company held as collateral by G&G Holdings and Richard Goble. As a result of

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Defendants' actions, Plaintiffs' business relationships through NACI and on behalf of themselves were all destroyed. The destruction of these relationships have resulted in substantial lost revenue to NACI, future dividend and distribution income to Plaintiff Goble Trust through its ownership of NACI, lost rent to G&G Holdings, indirectly caused the destruction of the property of FIA, as well as the destruction of Plaintiff Goble Trust's stock value in NACI, all to the extent of one hundred million dollars or more. WHEREFORE Plaintiffs seek against all Defendants millions of dollars of compensatory damages in the amount of one hundred million dollars, costs of this suit, rental proceeds, and such other and further relief as this Honorable Court deems proper

COUNT IV AGAINST DEFENDANTS FINRA, SEC, SCHAPIRO, VOGEL, and LUQUEDEFAMATION OF GOBLE TRUST AND GOBLE 157. 158. Plaintiffs reallege and reincorporate paragraphs 1 through 114 above. Defendant FINRA, by itself and through its agents Mary Schapiro and Grace

Vogel, did knowingly and intentionally utter false statements, or alternatively uttered statements that it should have known were false, regarding the condition of NACI to officers of the SEC. These statements included statements to investigators at the SEC just prior to its last investigation of NACI, stating and implicating the officers of NACI were intentionally shifting funds to its operating account to remain solvent. Defendants knew that these statements were false, or at least should have known that they were false. 159. As a result of FINRA's false allegations to Defendant SEC, the SEC itself

launched a campaign to publish erroneous information about the condition of NACI. (See Plaintiff's Exhibit "O")

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160.

As a result of Defendants' actions, NACI's business was destroyed due to the

overzealous and inappropriate investigation of the SEC into allegations that were baseless. 161. Defendant Luque formulated and defamed NACI by understating its solvent

position to regulators. Luque's computations falsely indicated that NACI's financial position was insolvent and that it was incapable of properly running its business without great danger to its clients. This information was then widely published and destroyed NACI's viability as a business. Luque knew or should have known that these accounting statements he prepared about NACI were false. 162. Plaintiffs have suffered substantial injury as a result of these acts of Defendants

into the millions of dollars. As a result of Defendants' actions, Plaintiffs' business relationships through NACI and on behalf of themselves were all destroyed. The destruction of these relationships have resulted in substantial lost revenue to NACI, future dividend and distribution income to Plaintiff Goble Trust through its ownership of NACI, lost rent to G&G Holdings, indirectly caused the destruction of the property of FIA, as well as the destruction of Plaintiff Goble Trust's stock value in NACI, all to the extent of one hundred million dollars or more. WHEREFORE, Plaintiffs Goble Trust and Goble seek compensatory damages in the amount of one hundred million dollars, costs of this suit, attorney's fees, and such other and further relief as this Honorable Court deems proper against Defendants.

DATED this 16th day of March, 2010

Respectfully submitted,

/s/ Philip Bartlett________________ Philip Bartlett, Esq. Florida Bar No. 0045318 33 
 

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The Bartlett Law Firm, P.A. 230 East Marks Street Orlando, FL 32803 (321) 319-0587 (telephone) (866) 596-9215 (facsimile) phil@pdbartlettlaw.com (e-mail) Attorney for Plaintiffs.

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Abou NASD ut

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| Press Roo | Registration & Qualifications | Reg om gulatory Services | R Resources | Career Opportunities | Site Map | Contact Us e

Regulato Consolidation Plan ory n
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Gene Information | Mem eral mber Meetin Schedule ngs

Search General In nformation News Rele ease Announcem Remark ment ks Consolidat tion Facts Communic cations to Fir rms FAQ Assertions and Facts

Home > Regulat tory Consoli idation > Gene eral Informa ation > Assertio and ons Facts nterPrin Friendly Regula atory Consol lidation - Asser rtions and Fa acts NASD member firm have been ms n ng s receivin numerous communications from so ources other than NASD that are rela to the re ated ecently annou unced regulato consolid ory dation plan. T The NASD believes tha some of th at hose unications co ontain commu misstate ements of fa and wou like act, uld to set th record str he raight to ensu that ure all mem mbers have a access to acc curate informa ation and a f voting pr fair rocess. Asserti ion: After co onsolidation firms that a n, are currentl regulated only by NA ly ASD will be subject to N NYSE rules. Fact: rms NASD regulated fir will not be subject to any new requirement or ts s this ion. rules as a result of t transacti Once th consolida he ation is comp plete, the new SRO—in c w consultation with

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industry committees and after Board approval—will adopt a uniform set of rules flexible enough to accommodate the different business mixes and firm sizes in the industry. Assertion: The balance of small and large firms on the proposed Board of Governors is unfair to small firms. Fact: Quite the opposite is true. The consolidation gives small firms three guaranteed seats on the Board of Governors, which is the same amount as large firms and more than small firms currently are guaranteed on the NASD Board. The consolidation preserves industry representation in the SRO process and guarantees that firms of all sizes will have a significant voice in the governance of the new SRO. In negotiating the transaction, NASD's leadership insisted on industry representation and, in particular, on guaranteed small firm representation. The governance structure achieves those critical goals and is fair and balanced. Assertion: NASD can increase the amount of the $35,000 one-time payment due to all member firms if the consolidation is approved. A much larger payment can and should be made. Fact: A larger payment isn't possible. NASD is a tax-exempt organization and therefore is limited by tax laws

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regarding size and source of payments it can make to its members. The payment of $35,000 per member firm, or a total of $178 million, will be funded by—and therefore limited by—the expected value of the incremental cash flows that will be produced by the consolidation transaction. If the special member payment was higher, it could seriously jeopardize NASD's status as a tax-exempt organization, which would result in significantly higher fees for firms. In addition to the special member payment being funded by the transaction itself, NASD is also committed to reducing the costs of regulation as efficiencies accrue from the consolidation, and expects to share those efficiencies with its members through discounts in yearly gross income assessments and reductions in fees. Assertion: The proposed governance changes will effectively restrict the rights of NASD member firms. Fact: Quite the opposite. NASD was absolutely determined to have broad industry representation—and small firm representation in particular—and we negotiated the best possible agreement to preserve our bedrock principle of industry participation. Each member firm will still get one vote for all: • By-Law changes, • District committee elections, and

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Board elections in their firm category. Assertion: NASD is rushing its members to vote on the proposed By-Law amendments before they have had ample opportunity to review them. Fact: NASD is not rushing the vote. We are committed to full disclosure and answering member questions about the consolidation plan and its implementation—including the ByLaw amendments that are needed and the special member meeting that will be held. NASD management is currently in the process of meeting with members across the country to provide more information and answer their questions. All members also will receive (by mail) a detailed information package about the plan and the By-Law amendments that will be voted on at the special meeting. Members will then have 30 days in which to vote, which is in accordance with NASD's By-Laws and consistent with past NASD member votes. Assertion: Small firms will be better off if they reject this deal. Fact: If NASD member firms don't vote to approve the By-Law amendments needed to effectuate this deal, there can be no assurances about the shape of self-regulation moving forward. The SEC is committed to ending redundant, inefficient regulation, and

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this can be achieved through th n d he consolidation plan t the NAS that SD Board o Governors overwhelm of mingly approve For exam ed. mple, the SEC recently approved t NYSE's y the governa ance structur re—which prohibits all industr participati at ry ion the boa level—as fair ard s representation of th industry. T he The ould choose o other ways t to SEC co change the SRO system that wo ould not perm the broad industry mit particip pation of the current plan n. Asserti ion: Investo will have less protection as ors a result of the propo t osed regulat tory consolidation. Fact: Having the most co g ompetitive, efficien and effecti nt ively regulat ted capital markets in the world is i the in best int terest of American inves stors, and is w the tens of millions of what s s people who invest f their futu for ure deserve Our self-re e. egulatory system will be more efficie and more ent e once the new organizatio is in w on robust o place an fully inte nd egrated. We w will replace a system of two ruleboo f oks, two sep parate regula atory staffs a two and comple etely differen enforceme nt ent systems with a coor s rdinated, integrat effort to keep our ma ted arkets free of fraud and un nfair dealing And g. ne taff with on rulebook, a focused st and no wast effort, th new SRO will ted he be able to find prob blems quicke and er deal wi them faster. ith

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EXHIBIT G

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DTC 0001

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EXHIBIT I

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was the one that had to certify the FOCUS reports, and the weekly reserve comp calculations, and net capital computations. Q Before you started work at North American Clearing,

had you ever done a net capital computation before? A Q A Never. What's a reserve computation? 15c3-3 computation. Bottom line, in layman's

terms, you have to have a certain amount of reserves in a bank for the exclusive benefit of the clients and customers. And, and you have a certain amount of debits on the books, and certain amount of credits on the books. The difference

between the debits and the credits are what you need to reserve in this special bank account. Q Before you began working at North American

Clearing, had you ever done reserve computations before? A Q from? A Learned how to do it from MaryBeth Schmidt. I No, never. Who did you learn how to do a reserve computation

tried to learn it from -- when I first started with the company, Mr. Goble had given me three names of three prior FINOPs that were on board or working as consultants for the company between the time of Mr. Gallagher's death in January to the beginning of April when MaryBeth Schmidt came on

Veritext/Florida Reporting Co. Serving the State of Florida (305) 376-8800

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board. I spoke with those three gentlemen, and I was trying to learn how to do this stuff from them. It was not

easy, because I would get three different opinions from those three gentlemen on how to do the same kind of calculations. Q When did you start doing the net capital

computation by yourself? MS. PAULOSE: BY MR. LEE: Q A You can answer. When did I start doing it by myself? It would have Objection. Relevance.

been starting with the August '07 FOCUS report. Q A Q How often are FOCUS reports done? Monthly. What does a net capital computation show? MS. PAULOSE: A Objection. Relevance.

Net capital computation shows the liquidity of a

equities firm. BY MR. LEE: Q What do you mean by liquidity of an equities firm? MS. PAULOSE: Objection. Relevance.

You want to give me a standing objection to any questions on net capital? I don't believe they're So I can

relevant to allegations in the complaint.

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keep objecting, or we can agree to a standing objection on net capital. MR. LEE: If you're not objecting to the

form of the question, it's preserved anyway, so I don't have problem with if you want -MS. PAULOSE: MR. LEE: A I'll just keep objecting.

Okay. I apologize.

What was the question, again?

BY MR. LEE: Q A What does liquidity mean? Liquidity is how much of the firm's capital they It is really the

have access to on a short-term basis.

equity of a firm, less any fixed assets, less any assets that cannot be converted into a form of cash within 12 months. Examples of that would be fixed assets, any

intangible assets there may be, any receivables that are over 12 months in nature, items like that. Q In August of '07 when you first started doing net

capital computations, was there some minimum requirement that North American Clearing had to have, in net capital? MS. PAULOSE: A Objection. Relevance.

They had to have a minimum 5 percent of the total It's been a

allowable debits, if memory serves me right. while since I've done this.

Veritext/Florida Reporting Co. Serving the State of Florida (305) 376-8800

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EXHIBIT J

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74 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 to the customer. Q. Well, if during the period between reserve

computations, if there was money received from settling a trade -A. Q. Correct. -- that money would not have to be reserved

pursuant to the reserve computation until the next reserve computation was performed, correct? A. Q. That's correct, sir. So from the period of when money is

received, for example, as a result of delivering securities or settling a trade until the next reserve computation is done, there's no requirement to do a reserve computation to safeguard those funds, correct? A. Q. That's correct, sir. And if the customers agreed that North

American Clearing could liquidate their money market account at North American Clearing's discretion, would you agree with me then that North American Clearing could liquidate money market funds? MR. LEVENSON: answer. THE WITNESS: your question. Yes. I think I understand Objection to form. You can

I said yes, but with the proviso
Veritext Florida Reporting Co.

800-726-7007

305-376-8800

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75 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 that the customer did give their written permission. BY MR. LEE: Q. And if there was a liquidation of a money

market fund, as your expert report indicates, and there was, therefore, cash that was utilized by North American Clearing, do you know what that cash was used for? A. Based on my review, the money from the

liquidations I'm referring to were used to satisfy other obligations of the broker-dealer, primarily their settlement with NSCC. Q. And do you know if any of the funds that

were liquidated from the sale of the money market funds were utilized to pay any of North American Clearing's overhead expenses? A. Would you describe "overhead expenses" or

give me an example of overhead expenses. Q. Were any of the funds obtained as a result

of the liquidation of the money market account utilized for any purposes other than for North American Clearing to meet its settlement obligations? A. Q. Not to my knowledge. And based upon your review of the documents,

did Richard Goble actually direct the liquidation of
Veritext Florida Reporting Co. 800-726-7007 305-376-8800

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76 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 any money market funds? A. Based on my review of the documents, it was

indicated in some depositions that he did have knowledge of it. There was a -- one transaction -- I

believe it was either April 16th or April 22nd -where Richard Goble, according to documents I reviewed, was signatory on the instruction to wire funds from the money market fund to the -- I believe the firm's operating account. Q. Is that the transaction where funds were

removed from the reserve, from the customer reserve account? A. I believe it was funds that were removed

from the money market fund and put in the firm's operating account. Q. When you say "operating account," are you

referring to the firm's settlement account? A. Well, the firm had -- you know, based on

what I've seen, the firm had more than one bank account, and I don't know specifically where that money went. But the funds were removed from the reserve fund and there had to be a wire instruction submitted to the reserve fund because it wasn't as a result of a trade which created a debit balance, and pursuant
Veritext Florida Reporting Co. 800-726-7007 305-376-8800

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77 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 to the operation of the money market fund, would not have been automatically swept as part of the daily -or wouldn't be part of the daily removal or deposit to the fund based on the net balance for any given day. It was something outside that, so there had to

be a specific wire instruction given to the fund. Q. And the funds that were withdrawn, those

were also used for settlement obligations, correct? A. Q. A. Q. A. Q. It appeared so. On page 8 of your report -Okay. -- in paragraph 27 -Yes. -- you indicate that "Goble and his

codefendants liquidated money market funds belonging to customers and subsequently altered the firm's books and records to disguise the appearance of a rule violation." A. Q. Do you see that?

Yes, I do. How was North American Clearing's books and

records altered to disguise the appearance of a rule violation? A. They removed money from the reserve money Again, I don't know what account it was

market fund.

deposited to, but those monies were ultimately used
Veritext Florida Reporting Co. 800-726-7007 305-376-8800

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78 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 to satisfy the settlement with NSCC. Q. And how did North American Clearing alter

the firm's books and records to disguise the appearance of a rule violation? A. Because without those funds, they would not

have been able to meet their settlement with NSCC and NSCC would have probably ceased to do business with them if they did not meet their daily settlement. the books and records were altered in that in order to get the funds to meet that settlement, they removed funds from a customer money market account, which is a good control location, while the money is in the money market fund. They removed the monies So

from there and utilized those monies to fulfill their settlement obligation within NSCC. Q. Weren't all those transactions reflected on

the firm's books and records? A. Q. To my knowledge, yes, they are. So how were the books and records altered to

disguise the appearance of a rule violation? A. They were altered in that the entries were

made removing the funds from the reserve account and placing them in the firm's operating account, which is not a normal business occurrence. Q. So it's your testimony that the actual
Veritext Florida Reporting Co. 800-726-7007 305-376-8800

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89 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 identification.) MR. LEVENSON: Mr. Luque. BY MR. LEE: Q. Mr. Luque, have you reviewed this document It is now in front of

as part of your review of documents in this case? A. Q. It's looks familiar. And this is an account statement, two-page

printout, for Mary Cavasina and the statement period is April 1, 2008 through April 30, 2008, correct? A. Q. Correct. And on the second page, there is a number of

transactions relating to money market and then the reserve primary fund redemption. Are these the

transactions, some of the transactions, that you're referring to as the liquidation of the money market fund? A. This is a similar statement to what I'm

referring to. Q. And are the money market redemptions, are

they reflected on this statement? A. Q. Yes, they are. And the money with this customer that was

redeemed from the money market account, is that cash also reflected on this statement?
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90 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 A. Q. Yes. It's reflected as debits and credits.

And the customer money, whether it was in

the money market account or in the -- or in a cash account, the money never left this customer's account as reflected in this statement, correct? A. Q. That's correct. And based upon your review of the various

account statements that you reviewed, weren't the money market liquidations all disclosed on the statements that were provided to customers? A. Q. Yes. And North American Clearing did not withhold

that information from the customers, correct? A. Q. Not to my knowledge. And based upon your review of the account

statements that you, in fact, did review, did you see whether there were any misrepresentations or missing information from those account statements? A. That was not specifically part of my review,

but I did not detect any. Q. In this stack of documents that I have

there, if you could find the expert report of Anthony Ruben for me. MR. LEVENSON: MR. LEE: Yes. Mark it? It will be Number 6.

Veritext Florida Reporting Co. 800-726-7007 305-376-8800

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91 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 MR. LEVENSON: Yes.

(Exhibit No. 6 was marked for identification.) MR. LEVENSON: Okay. I just now placed it

in front of Mr. Luque. BY MR. LEE: Q. Mr. Luque, Exhibit Number 6 is the Expert Have you reviewed this

Report of Anthony Ruben. report? A. Q. Yes, I have, sir.

Did you review this report before you

prepared your report? A. Q. No, I did not. And having reviewed Mr. Ruben's report, do

you have any opinion that you'll be providing in this case as to whether anything Mr. Ruben said was inaccurate or incorrect? A. point. Q. And have you determined whether anything in I have not been asked to do that at this

Mr. Ruben's report is inaccurate or incorrect? A. Q. I haven't been asked to do that either. Whether you've been asked to do it or not,

have you reviewed the report and determined whether anything contained therein is incorrect or
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92 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 2008? MR. LEE: Yes. I've got it. inaccurate? A. Sir, I looked at the report. I did not

review it in any detail. Q. There should be a document that at the top

it's -- the document is actually printed in a landscape format, but at the top it reflects a case number and it's called Net Capital Computation. MR. LEVENSON: Hold on. As of June 30th,

MR. LEVENSON: MR. LEE:

Could you mark that as the next

exhibit, please. (Exhibit No. 7 was marked for identification.) MR. LEVENSON: Mr. Luque. BY MR. LEE: Q. Mr. Luque, you've been handed a document Okay. I'm now giving it to

that at the top says "Net Capital Computation," and it was a document filed in Case Number 08 00829. Have you ever seen this document before? A. Q. I don't believe so. When you were providing services to the

receiver, did you prepare a net worth computation for
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EXHIBIT K

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BY MR. LEE: Q Could you explain it again? MS. PAULOSE: and answered. A Net capital is basically the equity of a firm, less Again, Objection. Relevance. Asked

all of the not allowable assets of a firm.

nonallowable assets of a firm, as I have described before, are fixed assets of the firm and intangible assets of the firm. And, in this instance, aged failed to delivers.

Those would be nonallowable assets. So the total ownership equity of the firm was three million; the deductions and nonallowable assets totaled over 1.3 million; so the net capital was 1.695. BY MR. LEE: Q Do you know, as of March 31 of 2008, what North

American Clearing's required net capital was? MS. PAULOSE: A Objection. Relevance.

The required would have been 2 percent of combined

aggregate debit items, or $416,000, roughly. (Thereupon, the 3/31/08 Balance Sheet was marked Exhibit Number 8.) BY MR. LEE: Q Number 8. Handing to you what I've marked as Exhibit These are North American Clearing financial

documents, starting with a balance sheet as of March 31,

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2008, which is two pages; then a profit-and-loss for January through March 2008, which is two pages; then a balance sheet as of April 30, 2008, which is two pages; then a profit-and-loss, January through April 2008, which is two pages; then a balance sheet as of May 31, 2008, which is two pages; then a profit-and-loss, January through May 2008, which is two pages; then a balance sheet as of June 30, 2008, which is two pages; then, finally, a profit-and-loss for January through June 2008, which is two pages. Were you involved in the preparing of North American Clearing's financials, such as balance sheets, and the profit-and-loss statements that are Exhibit Number 8? A that, no. Q Through March of 2008, based upon these financials, Through March 31, yes; through April 30, and beyond

did North American have positive or negative net income? A Q They had positive net income. How much is reflected on Exhibit Number 8, as the

positive net income for North American Clearing? A $41,000. But, then once again we had taken that

$140,000 one-time refund, and we had put that in the March financials. Had we not done that, then the company would

have been in a loss position of roughly $100,000. Q Sure. And if you would have terminated all your

employees, you would have had less expenses, too; correct?

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MS. PAULOSE:

Objection.

Form.

What kind of question is that?

BY MR. LEE: Q You're not answering my question as to whether you

had a positive net income, and you're adding editorials, so I asking you if, for example, you had terminated all the employees, wouldn't that have reduced expenses? MS. PAULOSE: BY MR. LEE: Q A Q No? Yes? Objection. Argumentative.

Then shut the doors down? Through May 2008, what do these financials reflect North American Clearing? Objection. Calls for speculation.

as to net income for MS. PAULOSE:

This witness just testified he wasn't involved in preparing those reports. BY MR. LEE: Q A Q You can answer. Net income of $448,000. And, through June of 2008, what does Exhibit Also, foundation.

Number 8 refect as net income for North American Clearing? MS. PAULOSE: $382,000. Same objection.

BY MR. LEE: Q So if those financials are accurate, North American

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Clearing was actually making a profit, through June of 2008? MS. PAULOSE: A Same objection.

I've not had a chance to review the books for

April, May or June, but from looking at the differences from March to April of 2008, it claims that revenue basically in three months' time frame went from $828,000 to, April, $1,700,000. That would indicate that the business in one I would have

month doubled from the previous three months.

to see the financials of that and the accuracy, because I would have a tough time believing that the company went from averaging $275,000 of revenue to almost $900,000 of revenue in one month. BY MR. LEE: Q Do you know who prepared the financial statements

after you left North American Clearing? A I believe Mr. Goble did. I believe he signed the

FOCUS report from April. Q Who prepared the profit-and-loss and balance

sheets, as of April 30, May 31, and June 30; do you know? A I do not. MS. PAULOSE: A Objection. Relevance.

I have no idea who did that.

BY MR. LEE: Q Did you assist the receiver at all in preparing

financial documents from North American Clearing?

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A

I assisted them in the wind-down process.

I also

assisted them in the QuickBooks file, as to how they could get access to that, what the information meant. In terms of the financial statement preparation, due to the pending nature of this case I was not granted access to current live information, and that was a mutually agreed-upon item between both the receiver and myself, because I did not want to be directly involved in the financial statement preparation while this case was pending. Q How long did you provide services to the receiver? MS. PAULOSE: Objection. Mischaracterizes

the witness's testimony. BY MR. LEE: Q How long did you work for the receiver? MS. PAULOSE: Objection. Mischaracterizes

the witness's testimony. BY MR. LEE: Q A What did you do for the receiver? I assisted the receiver in the wind-down process.

I assisted the receiver with the monthly correspondent settlement for May, because the business was still active from May 1st through May 21st, when the wind-down process began. In order to complete the information, to complete the financial, you know, wind-down of the company, the

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SEC Halts Florida Clearing Firm's Fraudulent Use of Customer Funds
FOR IMMEDIATE RELEASE 2008-97 Washington, D.C., May 28, 2008 — The Securities and Exchange Commission today announced that it has obtained an asset freeze and other emergency relief to protect investors whose funds were at risk due to fraudulent misconduct at North American Clearing, Inc., a Longwood, Fla., based general securities and clearing brokerage firm. North American Clearing services approximately 40 correspondent brokers and clears transactions for over 10,000 customer accounts.

Additional Materials • • Litigation Release No. 20602 SEC Complaint

The SEC requested the relief when it filed a complaint on May 27, 2008, against North American Clearing, its founder and director Richard L. Goble, its president Bruce B. Blatman, and its former financial and operations principal Timothy J. Ward, charging them with fraud and other securities laws violations. The SEC's complaint alleges that the defendants engaged in illegal activities, including the misuse of customer funds, in order to hide North American Clearing's financial problems and to pay for its daily business operations. In addition to the asset freeze, the SEC obtained a temporary restraining order against the defendants and an order appointing a receiver over North American Clearing. Linda Chatman Thomsen, Director of the SEC's Division of Enforcement, said, "Protecting customer funds from misuse by a broker-dealer, as we allege here, is a fundamental part of our enforcement efforts. Today's action demonstrates our ongoing commitment to investor protection." David Nelson, Director of the SEC's Miami Regional Office, added, "The federal securities laws include important safeguards designed to protect investor assets from misuse by broker-dealers. We will take swift action to protect investors when misconduct occurs that puts their money at risk." The SEC's complaint alleges that the defendants' fraud began earlier this year, when North American Clearing began experiencing severe financial problems. To ease its financial difficulties, North American Clearing secured a bank loan using customer securities as collateral. To comply with the federal securities laws and remain in operation, North American Clearing increased its reserves in an account it maintained for the benefit of customers, which limited funds available to North American Clearing to meet its daily operating expenses.

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According to the SEC's complaint, on several occasions in March and April 2008, North American Clearing improperly sold customer money market funds as a means of temporarily freeing up funds that it then used to pay for daily operating expenses. The SEC's complaint also alleges that on May 13, 2008, the defendants manipulated North American Clearing's processing system to overstate net customer money market purchases. This enabled North American Clearing to illegally withdraw more than $3 million from the reserves it was required to maintain for the benefit of customers. The SEC's complaint, filed in the United States District Court for the Middle District of Florida in Orlando, seeks preliminary and permanent injunctions, disgorgement of ill-gotten gains against North American Clearing and Goble, and civil penalties against all defendants. The SEC's complaint alleges that the defendants violated the antifraud, customer protection and books and records provisions of the Securities Exchange Act of 1934. On May 27, 2008, the Honorable Gregory A. Presnell granted the SEC's ex parte motion for emergency relief, entering a temporary restraining order against the defendants and freezing North American Clearing's assets. The order also provides for a sworn accounting from North American Clearing and preservation of its records. The Court further appointed Peter J. Anderson, an attorney in the law firm of Sutherland Asbill & Brennan LLP of Atlanta, Ga., as a receiver over North American Clearing. Among other things, the receiver is responsible for marshaling and safeguarding assets held by North American Clearing. A show cause hearing has been set for June 6, 2008, to determine whether the emergency asset freeze and other relief should remain in effect. The Commission acknowledges the assistance of the Financial Industry Regulatory Authority (FINRA) in this matter. ### David Nelson Regional Director, SEC's Miami Regional Office (305) 982-6332 Glenn S. Gordon Associate Regional Director (Enforcement), SEC's Miami Regional Office (305) 982-6360 Eric Busto Assistant Regional Director (Enforcement), SEC's Miami Regional Office (305) 982-6362

http://www.sec.gov/news/press/2008/2008‐97.htm

 

OJS 44 (Rev. 12/07)

Case 6:10-cv-00408-ACC-DAB Document 1-16

CIVIL COVER SHEETFiled 03/16/10 Page 1 of 2

The JS 44 civil cover sheet and the information contained herein neither replace nor supplement the filing and service of pleadings or other papers as required by law, except as provided by local rules of court. This form, approved by the Judicial Conference of the United States in September 1974, is required for the use of the Clerk of Court for the purpose of initiating the civil docket sheet. (SEE INSTRUCTIONS ON THE REVERSE OF THE FORM.)

I. (a) PLAINTIFFS FINANCIAL INDUSTRY ASSOCIATION, G&G HOLDINGS, INC., RICHARD GOBLE, THE GOBLE FIRST REVOCABLE TRUST MAY 13,County of Residence of First Listed Plaintiff Seminole County (b) 1999
(EXCEPT IN U.S. PLAINTIFF CASES)

DEFENDANTS

(c) Attorney’s (Firm Name, Address, and Telephone Number)

SECURITIES AND EXCHANGE COMMISSION, FINANCIAL INDUSTRY REGULATORY AUTHORITY, INC. (FINRA), of First Listed Defendant District of Columbia County of Residence THE DEPOSITORY TRUST AND CLEARING CORPORATION (DTCC), MARY (IN U.S. PLAINTIFF CASES ONLY) NOTE: IN LAND CONDEMNATION CASES, USE THE LOCATION SHAPIRO, GRACE VOGEL, LARRY THOMPSON, OF THE TIMOTHY LAND INVOLVED. WARD, BRUCE BLATMAN, GEORGE FRANCESCHINI, and SAM LUQUE, JR., Attorneys (If Known)

Philip Bartlett, Esq., The Bartlett Law Firm, P.A., 230 East Marks Unknown Street, Orlando, FL 32803 II. BASIS OF JURISDICTION (Place an “X” in One Box Only) III. CITIZENSHIP OF PRINCIPAL PARTIES(Place an “X” in One Box for Plaintiff
’ 1
U.S. Government Plaintiff

’ 3 Federal Question (U.S. Government Not a Party) ’ 4 Diversity
(Indicate Citizenship of Parties in Item III)

(For Diversity Cases Only) PTF Citizen of This State ’ 1

DEF ’ 1

and One Box for Defendant) PTF DEF Incorporated or Principal Place ’ 4 ’ 4 of Business In This State Incorporated and Principal Place of Business In Another State Foreign Nation

’ 2

U.S. Government Defendant

Citizen of Another State

’ 2 ’ 3

’ ’

2

’ 5 ’ 6

’ 5 ’ 6

Citizen or Subject of a Foreign Country

3

IV. NATURE OF SUIT
CONTRACT

(Place an “X” in One Box Only) TORTS PERSONAL INJURY 310 Airplane 315 Airplane Product Liability 320 Assault, Libel & Slander 330 Federal Employers’ Liability 340 Marine 345 Marine Product Liability 350 Motor Vehicle 355 Motor Vehicle Product Liability 360 Other Personal Injury CIVIL RIGHTS 441 Voting 442 Employment 443 Housing/ Accommodations 444 Welfare 445 Amer. w/Disabilities Employment 446 Amer. w/Disabilities Other 440 Other Civil Rights PERSONAL INJURY ’ 362 Personal Injury Med. Malpractice ’ 365 Personal Injury Product Liability ’ 368 Asbestos Personal Injury Product Liability PERSONAL PROPERTY ’ 370 Other Fraud ’ 371 Truth in Lending ’ 380 Other Personal Property Damage ’ 385 Property Damage Product Liability PRISONER PETITIONS ’ 510 Motions to Vacate Sentence Habeas Corpus: ’ 530 General ’ 535 Death Penalty ’ 540 Mandamus & Other ’ 550 Civil Rights ’ 555 Prison Condition

FORFEITURE/PENALTY

BANKRUPTCY

OTHER STATUTES

’ ’ ’ ’ ’ ’ ’ ’ ’ ’ ’ ’ ’ ’ ’ ’ ’ ’

110 Insurance 120 Marine 130 Miller Act 140 Negotiable Instrument 150 Recovery of Overpayment & Enforcement of Judgment 151 Medicare Act 152 Recovery of Defaulted Student Loans (Excl. Veterans) 153 Recovery of Overpayment of Veteran’s Benefits 160 Stockholders’ Suits 190 Other Contract 195 Contract Product Liability 196 Franchise REAL PROPERTY 210 Land Condemnation 220 Foreclosure 230 Rent Lease & Ejectment 240 Torts to Land 245 Tort Product Liability 290 All Other Real Property

’ ’ ’ ’ ’ ’ ’ ’ ’

’ ’ ’ ’ ’ ’ ’

’ 610 Agriculture ’ 620 Other Food & Drug ’ 625 Drug Related Seizure of Property 21 USC 881 ’ 630 Liquor Laws ’ 640 R.R. & Truck ’ 650 Airline Regs. ’ 660 Occupational Safety/Health ’ 690 Other LABOR ’ 710 Fair Labor Standards Act ’ 720 Labor/Mgmt. Relations ’ 730 Labor/Mgmt.Reporting & Disclosure Act ’ 740 Railway Labor Act ’ 790 Other Labor Litigation ’ 791 Empl. Ret. Inc. Security Act
IMMIGRATION ’ 462 Naturalization Application ’ 463 Habeas Corpus Alien Detainee ’ 465 Other Immigration Actions

’ 422 Appeal 28 USC 158 ’ 423 Withdrawal 28 USC 157
PROPERTY RIGHTS ’ 820 Copyrights ’ 830 Patent ’ 840 Trademark

’ ’ ’ ’ ’ ’ ’ ’ ’ ’ ’ ’ ’ ’ ’ ’ ’ ’ ’

SOCIAL SECURITY 861 HIA (1395ff) 862 Black Lung (923) 863 DIWC/DIWW (405(g)) 864 SSID Title XVI 865 RSI (405(g)) FEDERAL TAX SUITS ’ 870 Taxes (U.S. Plaintiff or Defendant) ’ 871 IRS—Third Party 26 USC 7609

’ ’ ’ ’ ’

400 State Reapportionment 410 Antitrust 430 Banks and Banking 450 Commerce 460 Deportation 470 Racketeer Influenced and Corrupt Organizations 480 Consumer Credit 490 Cable/Sat TV 810 Selective Service 850 Securities/Commodities/ Exchange 875 Customer Challenge 12 USC 3410 890 Other Statutory Actions 891 Agricultural Acts 892 Economic Stabilization Act 893 Environmental Matters 894 Energy Allocation Act 895 Freedom of Information Act 900Appeal of Fee Determination Under Equal Access to Justice 950 Constitutionality of State Statutes

V. ORIGIN
’ 1 Original Proceeding

(Place an “X” in One Box Only)

Appeal to District Appellate Court

’ 2 Removed from
State Court

’ 3 Remanded from

’ 4 Reinstated or ’ 5 Transferred from ’ 6 Multidistrict another district Reopened Litigation (specify)

’ 7 Judge from Magistrate
Judgment

28 U.S.C. 1332 VI. CAUSE OF ACTION Brief description of cause: Interference with Business Relations, Abuse of Process, Defamation CHECK YES only if demanded in complaint: DEMAND $ ’ CHECK IF THIS IS A CLASS ACTION VII. REQUESTED IN UNDER F.R.C.P. 23 100,000,000.00 ’ Yes ’ No JURY DEMAND: COMPLAINT:
VIII. RELATED CASE(S) IF ANY
DATE (See instructions):

Cite the U.S. Civil Statute under which you are filing (Do not cite jurisdictional statutes unless diversity):

JUDGE
SIGNATURE OF ATTORNEY OF RECORD

DOCKET NUMBER

03/16/2010
FOR OFFICE USE ONLY RECEIPT # AMOUNT

/s/ Philip Bartlett, Esq.

APPLYING IFP

JUDGE

MAG. JUDGE

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JS 44 Reverse (Rev. 12/07)

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INSTRUCTIONS FOR ATTORNEYS COMPLETING CIVIL COVER SHEET FORM JS 44
Authority For Civil Cover Sheet
The JS 44 civil cover sheet and the information contained herein neither replaces nor supplements the filings and service of pleading or other papers as required by law, except as provided by local rules of court. This form, approved by the Judicial Conference of the United States in September 1974, is required for the use of the Clerk of Court for the purpose of initiating the civil docket sheet. Consequently, a civil cover sheet is submitted to the Clerk of Court for each civil complaint filed. The attorney filing a case should complete the form as follows: I. (a) Plaintiffs-Defendants. Enter names (last, first, middle initial) of plaintiff and defendant. If the plaintiff or defendant is a government agency, use only the full name or standard abbreviations. If the plaintiff or defendant is an official within a government agency, identify first the agency and then the official, giving both name and title. (b) County of Residence. For each civil case filed, except U.S. plaintiff cases, enter the name of the county where the first listed plaintiff resides at the time of filing. In U.S. plaintiff cases, enter the name of the county in which the first listed defendant resides at the time of filing. (NOTE: In land condemnation cases, the county of residence of the “defendant” is the location of the tract of land involved.) (c) Attorneys. Enter the firm name, address, telephone number, and attorney of record. If there are several attorneys, list them on an attachment, noting in this section “(see attachment)”. II. Jurisdiction. The basis of jurisdiction is set forth under Rule 8(a), F.R.C.P., which requires that jurisdictions be shown in pleadings. Place an “X” in one of the boxes. If there is more than one basis of jurisdiction, precedence is given in the order shown below. United States plaintiff. (1) Jurisdiction based on 28 U.S.C. 1345 and 1348. Suits by agencies and officers of the United States are included here. United States defendant. (2) When the plaintiff is suing the United States, its officers or agencies, place an “X” in this box. Federal question. (3) This refers to suits under 28 U.S.C. 1331, where jurisdiction arises under the Constitution of the United States, an amendment to the Constitution, an act of Congress or a treaty of the United States. In cases where the U.S. is a party, the U.S. plaintiff or defendant code takes precedence, and box 1 or 2 should be marked. Diversity of citizenship. (4) This refers to suits under 28 U.S.C. 1332, where parties are citizens of different states. When Box 4 is checked, the citizenship of the different parties must be checked. (See Section III below; federal question actions take precedence over diversity cases.) III. Residence (citizenship) of Principal Parties. This section of the JS 44 is to be completed if diversity of citizenship was indicated above. Mark this section for each principal party. IV. Nature of Suit. Place an “X” in the appropriate box. If the nature of suit cannot be determined, be sure the cause of action, in Section VI below, is sufficient to enable the deputy clerk or the statistical clerks in the Administrative Office to determine the nature of suit. If the cause fits more than one nature of suit, select the most definitive. V. Origin. Place an “X” in one of the seven boxes. Original Proceedings. (1) Cases which originate in the United States district courts. Removed from State Court. (2) Proceedings initiated in state courts may be removed to the district courts under Title 28 U.S.C., Section 1441. When the petition for removal is granted, check this box. Remanded from Appellate Court. (3) Check this box for cases remanded to the district court for further action. Use the date of remand as the filing date. Reinstated or Reopened. (4) Check this box for cases reinstated or reopened in the district court. Use the reopening date as the filing date. Transferred from Another District. (5) For cases transferred under Title 28 U.S.C. Section 1404(a). Do not use this for within district transfers or multidistrict litigation transfers. Multidistrict Litigation. (6) Check this box when a multidistrict case is transferred into the district under authority of Title 28 U.S.C. Section 1407. When this box is checked, do not check (5) above. Appeal to District Judge from Magistrate Judgment. (7) Check this box for an appeal from a magistrate judge’s decision. VI. Cause of Action. Report the civil statute directly related to the cause of action and give a brief description of the cause. Do not cite jurisdictional statutes unless diversity. Example: U.S. Civil Statute: 47 USC 553 Brief Description: Unauthorized reception of cable service VII. Requested in Complaint. Class Action. Place an “X” in this box if you are filing a class action under Rule 23, F.R.Cv.P. Demand. In this space enter the dollar amount (in thousands of dollars) being demanded or indicate other demand such as a preliminary injunction. Jury Demand. Check the appropriate box to indicate whether or not a jury is being demanded. VIII. Related Cases. This section of the JS 44 is used to reference related pending cases if any. If there are related pending cases, insert the docket numbers and the corresponding judge names for such cases. Date and Attorney Signature. Date and sign the civil cover sheet.

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