Alvin and Dana Gebhart were Registered Principals with Mutual Service Corporation when they allegedly engaged in private securities transactions.  NASD, now FINRA charged the couple with failing to give prior written notification to, or get prior approval from, their member firm.  They also allegedly sold unregistered securities that were not exempt from registration, and recklessly made material misrepresentations and omissions in connection with the sale of securities. 

In the end, Alvin Waino Gebhart Jr. was barred from association with any FINRA member in any capacity.  Donna Traina Gebhart was fined $15,000, and suspended from association with any FINRA member in any capacity for one year. 

            A Trail of Appeals (according to Alvin's CRD Report- Donna's CRD Report bears similar dates).  The FINRA Hearing panel rendered a decision on 2/9/04, ordering Gebhart to pay a $100K fine and $5K in hearing costs, and to serve a 12-month suspension.  On 3/8/04, the decision was appealed to the NAC, which rendered an opinion on 5/24/05.  The NAC barred Gebhart and imposed the $5K in costs.  The NAC decision was appealed to the SEC on 6/14/05, which rendered its decision on 1/18/06 affirming the disciplinary action taken by NASD and the sanctions imposed in earlier proceedings.  The case was appealed to the U.S. Court of Appeals for the Ninth Circuit on 2/27/06, which affirmed in part and reversed in part an SEC order on 11/21/07.  He petitioned the Court of Appeals on 12/1/09, which on 2/17/10 denied the petition for review, supporting the SEC's conclusion that Gebhart had  acted with scienter (intent).   On 5/18/10, Gebhart petitioned the U.S. Supreme Court to hear his case, but petition was denied on 6/21/10.

        NASD Allegations in the Case.   The sanctions were based on findings that Alvin and Donna Gebhart engaged in private securities transactions without prior written notification to, or prior approval from, their member firm. The findings stated that Alvin and Donna Gebhart sold unregistered securities that were not exempt from registration, and recklessly made material misrepresentations and omissions in connection with the sale of securities.  

This is FINRA Case #C0220020057.   [April 2011 Disc. Actions]