Customer Alleges the rep failed to properly explain provisions/riders.

FLORIDA OFFICE OF FINANCIAL REGULATON

VIOLATION OF SECTION 517.161 (1) (H) F.S.; RULE 69W-600.013(2) (H) F.A.C.; NASD RULES 2110 AND 3110; AND SEC RULE 17A-3 BY DIRECTING AN ADMINISTRATIVE ASSISTANT TO SIGN HIS SIGNATURE ON INVESTMENT RELATED APPLICATIONS AND DOCUMENTS IN CONTRAVENTION OF HIS EMPLOYING BROKER DEALER FIRM'S SUPERVISORY PROCEDURES.

Order

Cease and Desist

Civil and Administrative Penalty(ies)/Fine(s)

$5,000.00

MADISON AVENUE SECURITIES, INC.

Permitted to Resign

REPRESENTATIVE SUBMITTED A LETTER OF RESIGNATION PRIOR TO THE CONCLUSION OF AN INTERNAL INVESTIGATION. INVESTIGATION CONCERNED ALLEGATIONS OF REPRESENTATIVE CAUSING AN EMPLOYEE TO SIGN REGISTERED REPRESENTATIVE'S SIGNATURE ON SPECIFIC CLIENT APPLICATIONS. EMPLOYEE ALSO ALLEGED THAT REPRESENTATIVE PAID SURRENDER CHARGES INCURRED BY CLIENT DIRECTLY INTO AN INSURANCE CONTRACT. THE INVESTIGATION HAS NOW BEEN CLOSED, AND THE FIRM IS TAKING NO FURTHER ACTION.

THE ALLEGATIONS ARE DENIED AND WERE MADE BY A DISGRUNTLED EMPLOYEE WHO HAD JUST BEEN TERMINATED.

STATE OF FLORIDA DEPARTMENT OF INSURANCE

MISREPRESENTATION

Settled

Suspension

RESPONDENT'S LICENSES AND ELIGIBILITY FOR LICENSURE ARE SUSPENDED FOR A PERIOD OF SIX(6) MONTHS COMMENCING ON APRIL 15, 2000.AT THE END OF THE SIX(6) MONTH PERIOD OF SUSPENSION RESPONDENT SHALL BE ENTITLED TO REAPPLY FOR REINSTATEMENT OF HIS LICENSES.

PRUCO SECURITIES CORPORATION CANCELLED THE TRADITIONAL POLICY WITH TOTAL PREMIUMS PAID IF $12,916.20 AND RESTORED CLIENT'S PREVIOUSLY ISSUED POLICY.PRUCO CANCELLED BOTH VAL CONTRACTS AND ISSUED TWO TRADITIONAL LIFE POLICIES WITH 100 FUTURE PAYMENTS DUE FROM CLIENT.

TWO VARIABLE LIFE POLICIES WERE LUMP SUM FUNDED. THE CLIENT ALLEGES THAT ``WE WERE ASSURED BY A PRUDENTIAL AGENT THAT THESE POLICIES WOULD STAY IN FORCE UNTIL ABOUT THE AGE OF 80 OR 90, EUEJ AT $200,000, WITHOUT ADDITIONAL MONIES``

$101,162.00

COMPANY CANCELLED BOTH VAL CONTRACTS AND ISSUED TWO TRADITIONAL LIFE POLICIES WITH 100 FUTURE PAYMENTS DUE FROM CLIENT THE PROJECTIONS MADE TO THE CLIENT WERE PROVIDED BY PRUDENTIAL. THE PROJECTIONS ASSUMED A RATE OF RETURN BASED ON HISTORICAL PERFORMANCE OF THE INVESTMENT SUB-ACCOUNTS. THE CUSTOMER TRANSFERRED ALL CONTRACT FUNDS INTO A FIXED ACCOUNT TWO YEARS AFTER ISSUE. THE LOWER INVESTMENT YIELD CAUSED THE CONTRACTS TO BE INSUFFICIENTLY FUNDED. THE COMPANY ALLEGES UNAUTHORIZED SALES MATERIAL WAS USED. AT THE TIME (1983) THERE WAS NO RESTRICTION ON SALES MATERIAL. THE COMPANY IS APPLYING PRESENT DAY PRACTICE RULES- NOT EFFECTIVE AT THE TIME