CASE TRACK RECORD                        

                                                     ARBITRATOR DISCLOSURE REPORT

                                                            240 WINS - 30 LOSSES*

           Since 1991, he has testified in 270 arbitrations (600+ retentions) and participated in 55 mediations as a Securities Industry Expert Witness.  He has been qualified and testified as a securities industry expert witness before the Los Angeles, Fresno, Orange County & San Diego State Courts.  He also was qualified and testified as an Insurance Industry Expert before the Nevada State Court.  He has served as a FINRA/NASD Arbitrator and as been assigned to 9 arbitration panels, one as chairman.  Six cases were settled, while three went to award.  He is scheduled to serve as a FINRA industry arbitrtor in a securities case set for March, 2010.

          In 2009, Mr. Dinehart was an expert witness in a case concerning a Tenant In Common Real Estate transaction that was filed against an Independent Broker Dealer.  Two Claimants were awarded $830,000 including interest and their attorney's fees. 

           Last year, 3 arbitration awards were issued by panels, where he participated as an expert witness representing claimants, in cases against two of the nations largest stock brokerage firms in the amounts of $2,500,000, $3,000,000 and $1,300,000, respectively.  However, he represents claimants 65% of the time, with respondents 35%, and rising.   

          The following information was prepared by FINRA/NASD for inclusion in the Neutral Arbitrator List Selection System for assignments as an Industry Arbitrator on its Securities Arbitration Panels.             *  Past performance is no guarantee of future results. 

           Let me also provide a bit of additional background.   I have been both an NASD representative & registered principal since 1972.  For 16 years, until 1988, my career moved forward normally and without incident.  I had successfully acted as Branch Manager for two securities firms and acting branch manager for another.  During the period Jan. 1987- Jan. 1990, I was National Sales Director for Boardwalk Capital Corporation.  I held the title of Vice-President, Marketing Compliance, and reported directly to the owner and sole stockholder of Boardwalk, Mr. D.J. Welch.  I was a salaried employee and held no stock ownership in the broker-dealer or any of its related entities.  In mid -1988, the NASDR expressed concern that Mr. Welch was not securities licensed with the NASD and required him to take the Series 7 examination in order to manage the broker-dealer.  In August, he asked me to temporarily step in as acting President and assume responsibility for broker-dealer operations while he studied for and passed the registered representative examination.  The NASDR accepted my new role and the company was able to secure the licenses & livelihoods of its 200 registered  representatives.   In early 1989, at Mr. Welch's request, I also studied for and obtained the Financial Principals license (Series 27).  I was succeeded by Paul Krsek as President in August, 1989.  At that time I became President of Boardwalk Asset Management, the firms Registered Investment Advisor.  He, along with new management, was brought in by Mr. Welch after purportedly providing new infusions of capital in exchange for stock ownership, to expand broker dealer operations.   The  new management team provided me with copies of written notification to the NASDR evidencing  the new titles along with my  removal from its records as Boardwalk Capital's President.  The NASDR never received notice of my removal or the replacement names. 

       During 1988 & 1989, Mr. Welch failed to pass the Series 7 examination on two separate occasions.  During this time, he was responsible for the management of the holding company while I bore responsibility for the broker-dealer operations.  Since as acting president, I was required to sign the firm’s focus reports, I became concerned over my potential exposure as to the firm’s financial condition.  Since we had a bookkeeper/Registered Financial Principal who prepared the reports, I was signing off on a second hand basis at the end of the reporting month.  In mid-1989, when my suspicions became aroused due to Mr. Welch's two failed securities examinations, along with sudden, new and unproven management, I enlisted the firms outside legal counsel to initiate auditing procedures over Boardwalk’s net capital position.  In early 1990, they came back to me with shocking news.  The firm was drastically undercapitalized and substantially below required net capital minimums (Boardwalk was a fully disclosed broker-dealer with only $10,000 of minimum required net capital).  When no satisfactory answers were forthcoming from the bookkeeper,  Mr. Welch or the new management team , I personally called the NASDR and closed the firm’s doors on January 20, 1990.  The firm immediately ceased doing business and all licenses were transferred.   Further, I filed a Form BDW (Broker- Dealer Withdrawn) with the NASDR.

       The NASDR informed me that they would not accept this filing officially, until they performed net capital audits for 1988 and 1989. After completing its audits and reconciling bank statements for every business day during the months for the last quarters of 1988 and 1989, The NASDR filed two separate complaints against Boardwalk, Welch et al, including myself, resulting in the claims that now are disclosed:

          1.  This was a books and records violation for the firm being out of net capital compliance during the last quarter of 1988, on NON REPORTING DATES.  This distinction means that the firm was within net capital compliance on the month-end reporting dates, when I signed the focus reports, but short on dates within the months.  This is considered to be a violation since firms are required to be in net capital compliance every business day of each month.  By auditing the bank statements, the NASDR observed several days of noncompliance on non month-end reporting dates.  I was fined $6,000 and paid the fine.  It is important to note that no customer was hurt or damaged in any way as a result of this "technical" violation.

          2.  The second complaint was a continuation of the first one, but charged separately months after the first one and long after my closing the firm.  During the last quarter of 1989, the firm was shown again to be out of net capital compliance on days during the months, on non-reporting dates.  The NASDR considered this to be a second offense and once again classified it as a "technical" violation.  I was fined $7,500 plus underwent a suspension (11-18-91) of my registered principal's license (Series 24 as opposed to my Series 7 license) for a period of 60 days.  Once again, I paid the fine and no customer was hurt or damaged, whatsoever.  I appealed both claims having the first one reduced and was praised for the timely closing of the firm when the shortage of net capital was clearly determined and first became known to me.  Further, I was required to re-qualify for the Financial Principals license should I desire to retain that license. I chose not to assume that liability ever again.  .  

          3.  The third complaint also occurred while at Boardwalk and was a supervisory action that had originally been thoroughly examined and dismissed, without sanction, by the L.A. District #2 office of the NASDR.  It was subsequently re-opened by the Dallas NASDR office.  A registered principal of Boardwalk sold a $30,000 preferred stock position to a Dallas, Texas based corporation.  The sale occurred in Texas with my never having spoken with or having met the client.  My total involvement included signing off on the business as Acting Branch Manager, when it was mailed into Boardwalk from Texas.   The registered principal, it was found, filled out the paperwork, misrepresenting certain client information and forging the signature on the subscription agreement.  The award against me of $5,000 was for lack of supervision in not detecting the fraud against the customer.  At the end of the hearing, the registered principal had declared bankruptcy and failed to attend the last day of the arbitration.   The panel fined him $40,000 for the forgery and misrepresentation. 

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