AWARD FINRA Dispute Resolution

In the Matter of the Arbitration Between:

Names of Claimants

Harvey Loomstein irrevocable Trust, The Mildred Loomstein GST Exempt IRREV TR, The Mildred Loomstein GST Non-EXMPT, TR. and Joseph Loomstein IRR TR

VS Case Number: 12-02081 Hearing Site: Dallas, Texas

Names of Respondents

FSC Securities Corporation and Jeffrey David Stern

NATURE OFTHE DISPUTE

Customers vs. Member and Associated Person

The case proceeded under the Optional All Public Panei Rule/ All Public Panel

REPRESENTATION OF PARTIES

Han/ey Loomstein Irrevocable Trust, The Mildred Loomstein GST Exempt IRREV TR, The Mildred Loomstein GST Non-EXEMPT TR, and Joseph Loomstein IRR TR ("Claimants") were represented by Mitchell Markowitz, SMRC, Inc., Brooklyn, New York.

FSC Securities Corporation ("FSC") and Jeffrey David Stem ("Stem"), hereinafter collectively referred to as "Respondents", were represented by Justin I. Sacca, Esq., FSC Securities Corporation, New York, New York.

CASE INFORMATION

The Statement of Claim was filed on or about June 1,2012. The Submission Agreement of Harvey Loomstein Irrevocable Trust was signed on or about May 8, 2012. The Submission Agreement of The Mildred Loomstein GST Exempt IRREV TR was signed on or about May 28,2013. The Submission Agreement of The Mildred Loomstein GST Non-EXMPT TR was signed on or about May 28,2013. The Submission Agreement of Joseph Loomstein IRR TR was signed on or about May 28, 2013. The Amended Statement of Ciaim was fiied on or about June 3, 2013.

• FINRA Dispute Resolutian Arbitration No. 12-02081 Awani Page 2 of 5

The Statement of Answer was filed jointly by Respondents on or about July 31,2012. The Submission Agreement of FSC Securities Corporation was signed on or about July 30, 2012, by Justin Sacca, Esq., Corporate Counsel. The Submission Agreement of Jeffrey David Stem was signed on or about July 27, 2012.

CASE SUMMARY

Claimants asserted the following causes of action: fraud; negligent misrepresentation; breach of fiduciary duty and breach of the covenants of good faith and fair dealing; negligent supen/ision; breach of conduct; and Section 20 violations ofthe 1934 Act. The causes of action related to Claimants' allegations that Respondents failed to execute certain option trades on their Banc of America equity position in 2008.

Unless specifically admitted in their Answer, Respondents denied the allegations made in the Statement of Claim and asserted various affimiative defenses.

RELIEF REQUESTED

In the Amended Statement of Claim, Claimants requested an award in the amount of:

Actual/Compensatory Damages $1,000,000.00 Other Monetary Reiief Unspecified

At the hearing, Claimants requested an award in the amount of:

Actual/Compensatory Damages $ 163,813.00

Respondents requested that the claims asserted against them be denied in their entirety and that they be awarded their costs and attorneys' fees.

OTHER ISSUES CONSIDERED & DECIDED

The Arbitrators acknowledge that they have each read the pleadings and other materials filed by the parties.

On or about May 30, 2013, Claimant Harvey Loomstein irrevocable Trust filed an Unopposed Motion to Amend the Statement of Claim to include The Mildred Loomstein GST Exempt In-ev Tr, The Mildred Loomstein GST Non-Exmpt Tr and Joseph Loomstein Irr Tr as Claimants. In its Order dated June 3, 2013, the Panel granted Claimant's Motion

At the in-person hearing, Jeffrey David Stem orally requested that all references to this matter be expunged from his records maintained by the Central Registration Depository ("CRD").

FINRA Dispute Resolution Arbtration No. 12-02081 Award Page 3 of 5

The parties have agreed that the Award in this matter may be executed in counterpart copies or that a handwritten, signed Award may be entered.

AWARD

After considering the pleadings, the testimony, and the evidence presented at the hearing, the Panel has decided in full and final resolution ofthe issues submitted for determination as follows:

1. ) Claimants' ciaims, each and all, are hereby denied and dismissed with prejudice;

2. ) The Panel recommends the expungement of all references to the above captioned arbitration from Respondent, Jeffrey David Stern's, registration records maintained by the Central Registration Depository ("CRD"), with the understanding that pursuant to Notice to Members 04-16, Respondent, Jeffrey David Stern, must obtain confinnation from a court of competent jurisdiction before the CRD will execute the expungement directive.

Uniess specifically waived in writing by FiNRA, parties seeking judicial confirmation of an arbitration award containing expungement relief must name FiNRA as an additional party and serve FINIRA with all appropriate documents.

Pursuant to Rule 12805, the Panel has made the following Rule 2080 affinnative finding of fact:

• The registered person was not involved in the alleged investment-related sales practice violation, forgery, theft, misappropriation, or conversion of funds.

The Panei has made the above Rule 2080 finding based on the following reasons:

Mr. Stern was not involved in the alleged investments sales practice violation. Ms. Stern was an "order taker" and did not have any true responsibility for the decision that was the basis of Mr. Loomstein's claim. The requested trades were denied by the Trading Desk and Mr. Stem did not have the authority to act to the contrary. The Panel found that Mr. Stern followed procedures and his record should be expunged.

FINRA Dispute Resolution Arbitration No. 12-02081 Award Page 4 of 5

3. ) Other than Forum Fees which are specified below, the parties shall each bear their own costs and expenses incurred in this matter; and

4. ) Any relief not specifically enumerated is hereby denied with prejudice.

Pursuant to the Code, the following fees are assessed:

Filing Fees

FINRA Dispute Resolution will retain the non-refundable filing fee* for each claim;

Initial Claim filing fee = $ 1,575.00

*The filing fee is made up of a non-refundable and a refundable portion.

Member Fees

Member fees are assessed to each member firm that is a party in these proceedings or to the member finn that employed the associated person at the time ofthe events giving rise to the dispute. Accordingly, as a party, FSC Securities Corporation is assessed the following:

Member surcharge =$ 2,250.00 Pre-hearing process fee = $ 750.00 Hearing process fee = $ 4,000.00

Hearing Session Fees and Assessments

The Panel has assessed hearing session fees for each hearing session conducted. A session is any meeting between the parties and the arbitrators, inciuding a pre-hearing conference with the arbitrators, that lasts four (4) hours or less. Fees associated with these proceedings are:

Two (2) Pre-hearing sessions with a single arbitrator x $450.00 = $ 900.00 Pre-hearing conferences: April 26, 2013 1 session

May 8, 2013 1 session

Two (2) Pre-hearing sessions with Panel x $1,200 00 = $ 2,400.00 Pre-hearing conferences: October 24, 2012 1 session

June 13,2013 1 session

FINRA Dispute Resolution Arbitration No. 12-02081 Award Page 5 of 5

Four (4) Hearing sessions x $1,200.00 = $ 4,800 00 Hearing Dates: June 4,2013 2 sessions

June 5. 2013 2 sessions Total Hearing Session Fees = $ 8,100 00

The Panel has assessed $4,050.00 of the hearing session fees jointly and severally to Harvey Loomstein Irrevocable Trust, The Mildred Loomstein GST Exempt IRREVTR, The Mildred Loomstein GST Non-EXEMPT TR, and Joseph Loomstein IRR TR.

The Panei has assessed $4,050.00 ofthe hearing session fees jointly and severally to FSC Secunties Corporation and Jeffrey David Stem.

All balances are payable to FINRA Dispute Resolution and are due upon receipt

ARBITRATION PANEL

Louis J. Weber, Jr. - Public Arbitrator, Presiding Chair Patricia B. Lehtola - Public Arbitrator Martha Z. Ralstin - Public Arbitrator

I, the undersigned Arbitrator, do hereby affirm that I am the individual described herein and who executed this instrument which is my award.

Concurring Arbitrators' Signatures:

/s/ Louis J. Weber. Jr. June 18. 2013 Louis J. Weber, Jr. Signature Date Public Arbitrator, Presiding Chair

/s/ Patricia 8. Lehtola June 17. 2013 Patricia B. Lehtola Signature Date Public Arbitrator

/s/ Martha Z. Ralstin June 17.2013 Martha Z. Ralstin Signature Date Public Arbitrator

June 18.2013 Date of Service (For FINFIA office use only)

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Four (4) Htiiaring sessions x $1,200.00 liearing Dates: June 4,2013

June 5.2013 2 seBslons 2 sessions

$ 4,800 00

Total Hearing Session Fees 8$ 8.100.00

The Psnel has assass l̂ $4,050.00 ofthe hsarlng session fees jointty and severally to Harvey Loomstein Inisvooable Trust, The MiMred Loomstein GST Exempt IRREV TR, The Mildred Loomstein GST Non-EXEMPT TR, and Joseph Loomstein IRR TR.

The Panel has assessed $4,050.00 ofthe haaring sesston fees jointly and severally to FSC Saourities Corporation and Jeffrey David Stem.

Ail balances are payable to FINRA Dispute Resolution and ara due upon racelpt.

ARBITRATfOW PANEL

Louis J. Weber, Jr. - Public Arbitrator. Preskling Chair Patrida B. Lehtola - Public Arbitrator Martha Z. Ralstin • Public Arbitrator

I, the undersigned Arbitrator, do hereby affimi that I am the individual described herein and who executed this Instmment which is my award.

residing Chair Signature Date

Patricia B. Lehtola Publlo Arbttrator

Signature Date

Martha Z. Ralstin Public Aibitrator

Signature Data

Date of Sen/ice (For FINRA ofRce use only)

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Four (4) Hearing sessions x $1,200.00 Hearing Dates: June 4,2013

June 5.2013 2 sessions 2 sessions

$ 4,800.00

Total Hearing Session Fees $ 8,100.00

The Panel has assessed $4,050.00 of tiie hearing session fees jointly and severally to Hanfey Loomstein Irrevocable Trust, The Mildred Loomstein GST Exempt IRREVTR. The Mildred Loomstein GST Non-EXEMPT TR, and Joseph Loomstein IRR TR.

The Panel has assessed $4,050.00 of the hearing sesston fees jointly and severally to FSC Securities Corporation and Jeffrey David Stem.

AH balances are payable to FINRA Dispute Resolution and are due upon receipt.

ARBITRATION PANEL

Louis J. Weber, Jr. - Public Arbitrator. Preskling Chair Patrida 6. Lehtola - Publtc Arbttrator Martha Z. Ralstin • PubHc Arbitrator

I, ttie undersigned Arbitrator, do hereby affimi tiiat I am the Individual described herein and who executed tills InstrumentwhIch is my award.

Concurring Arbitrators' Signatures:

Louis J. Weber, Jr. ar. Presiding Chair

'atrida B. Lehtola Public Arbitrator

Signature Date

Signature Date

Martha Z Ralstin Publto Arbitrator

Signatura Date

Date of Service (For FINRA office use only)

PINRA Disputa Resolution ArbltcallDn No. 12-02081 Awid Paqa 5 of S

Four (4) Hearing sessions x $1,200.00 Hearing Dates: June 4,2013

June 5. 2013 2 sessions 2 sessions

s $ 4,800.00

Total Hearing Session Fees »$ 8,100.00

The Panel has assessed $4,050.00 of the hearing session fees jointly and severally to Harvey Loomstein Inrevocable Trust, The Mildred Loomstein GST Exempt IRREVTR, The Mildred Loomstein GST Non-EXEMPT TR, and Joseph Loomstein IRR TR.

The Panel has assessed $4,050.00 ofthe hearing session fees jointly and severally to FSC Securities Corporation and Jeffrey David Stem.

All balances are payable to FINRA Dispute Resolution and are due upon receipt.

ARBITRATION PANEL

Louis J. Weber, Jr. - Public Arbitrator, Presiding Chair Patricia B. Lehtola - Public Arisitrator Martha Z. Ralstin - Public Arisitrator

I, the undersigned Ariiitrator, do hereby affirm that I am tiie Individual described herein and who executed this instrument which is my award.

Concuning Arbitrators' Signatures:

Louis J . Weber, Jr. Public Arisltrator, Presiding Chair

Signature Date

Patrida B. Lehtola Public Arbitt-i

MartloaZ/Raj PublicArbiti

Signature Date

Signature Date

Date of Sen/ice (For FINRA office use only)