CUSTOMER CLAIMS THT BROKER SOLD HIS FATHER'S POSITION OF PUBLIC SERVICE STOCK AND PURCHASED AN EATON VANCE MUTUAL FUND IN DECEMBER 2002 WITHOUT PERMISSION. DAMAGES ESTIMATED TO EXCEED $5000.

CUSTOMER ALLEGES THAT MR. SCHNEE'S RECOMMENDATION OF THE DREYFUS HIGH YIELD STRATEGIES FUND IN APRIL 1998 WAS UNSUITABLE.

$12,000.00

$9,125.00

THIS OCCURRENCE IS NO LONGER REPORTABLE AND SHOULD BE ARCHIVED. IT WAS FILED MORE THAT 24 MONTHS AGO AND DID NOT RESULT IN A SETTLEMENT OF $10,000 OR MORE.

CUSTOMER ALLEGES THAT THE RISKS OF HIS INVESTMENTS IN GRAND UNION AND TRANSAMERICAN ENERGY HIGH YIELD CORPORATE BONDS WERE NOT FULLY AND ACCURATELY DISCLOSED TO HIM. DAMAGES UNSPECIFIED BUT BELIEVED TO BE IN EXCESS OF $5000.

BASED ON THE INFORMATION THAT WAS AVAILABLE AND THE RESEARCH FROM PAINEWEBBER HIGH YEILD RESEARCH, I DISCLOSED ALL THE RELEVANT INFORMATION THAT WAS AVAILABLE TO ME.

THE CUSTOMER COMPLAINS OF LOSSES IN HER ACCOUNT RESULTING FROM THE PURCHASE OF THREE HIGH YIELD CORPORATE BONDS THAT WERE CONTRARY TO HER ALLEGED DESIRE FOR "RISK-FREE" INVESTMENTS. DAMAGES NOT SPECIFIED BUT IN EXCESS OF $5000.

BASED ON THE INFORMATION THAT WAS AVAILABLE AND THE RESEARCH FROM PAINEWEBBER, I DISCLOSED ALL THE RELEVANT INFORMATION THAT WAS AVAILABLE. I DO NOT AGREE WITH THE CUSTOMER'S COMMENT ON RISK-FREE INVESTMENTS. SHE HAS PURCHASED A WIDE VARIETY OF INVESTMENTS FROM STOCKS TO BONDS OF WHICH HAVE A WIDE DEGREE OF RATINGS AND RISK.

CLIENT RAISES SUITABILITY CONCERNS WITH PURCHASE OF FIVE CORPORATE BONDS. TIME PERIOD NOT SPECIFIED.

$403,775.00

IN REGARDS TO THE CUSTOMER'S LETTERS DATED 9/20/99 AND 10/25/99: THIS COMPLAINT IS AGAINST PAINEWEBBER AND NOT JEFF SCHNEE. I WAS ONLY REFERENCED AS THE BROKER OF RECORD. THE TWO LETTERS THAT CONSTITUTE THIS COMPLAINT, ALLEGE THAT THE DAMAGES WERE DUE TO POOR RESEARCH AND POOR RECOMMENDATIONS FROM THE HIGH YIELD DEPARTMENT. THE UNSUITABILITY SPECIFICALLY ADDRESSED THE PREVIOUS CONVERSATIONS BETWEEN THE CUSTOMER AND MYSELF, WHERE WE HAD AGREED TO BUY BONDS THAT WERE SENIOR DEBT AND/OR ASSET BACK TO PROTECT AGAINST THE EVENT OF A BANKRUPTCY. THE RESEARCH PROVIDED TO ME CLEARLY STATED THAT THERE WAS SUFFICIENT ASSET AVAILABILITY TO PROTECT AGAINST A POSSIBLE BANKRUPTCY AND I CONVEYED THIS INFORMATION TO THE CUSTOMER. UNFORTUNATELY, A BANKRUPTCY OCCURS AND THE VALUE OR ASSETS ARE TOTALLY INADEQUATE OR NOT AVAILABLE AT ALL. THE CUSTOMER ALLEGES THAT THESE INVESTMENTS WERE UNSUITABLE FOR HIM, BECAUSE HIS DECISION TO BUY THESE SECURITIES WERE BASED ON PAINEWEBBER RESEARCH WHICH I BELIEVED TO BE TRUE AND ACCURATE AND CONVEYED THIS TO HIM. IT IS UNSUITABLE BECAUSE A TOTAL LOSS OF PRINCIPAL WAS TOO RISKY, THEREFORE, UNSUITABLE.

UNSUITABLE RECOMMENDATIONS - $450,000 ALLEGED AS DAMAGES

$450,000.00

$250,000.00

SMITH BARNEY PAID $250,000 AND MR. SCHNEE WILL PAY SMITH BARNEY $14,000. THE RESPONDENT'S CONTRIBUTION TOWARD THE SETTLEMENT WAS BASED ON RESPONDENTS ESTIMATE OF ATTORNEY FEES AND COST TO DEFEND THE MATTER. THE RESPONDENT STEADFASTLY DENIES ANY LIABILITY IN DEALING WITH CLAIMANT.