CLIENT ALLEGED THAT FINANCIAL ADVISOR MADE UNAUTHORIZED TRADES AND ENGAGED IN EXCESSIVE TRADING.

$11,312.00

MERRILL LYNCH FOUND [CUSTOMER'S] CLAIMS TO BE WITHOUT MERIT.

MERRILL LYNCH

Discharged

ALLEGED THAT I WAS NOT TRUTHFUL IN COMPLETING INTERNAL AUDIT QUESTIONAIRE

FOUR WEEKS BEFORE A INTERNAL AUDIT I WAS ASKED TO FILL OUT A QUESTIONAIRE REGARDING MY BUSINESS. I WAS GIVEN NO INSTRUCTIONS AND ONE OF THE QUESTIONS WAS HAVE I RECEIVE A CUSTOMER COMPLAINT IN THE LAST TWELVE MONTS AND HAD I BEEN REPRIMANDED. I ANSWERED NO WHEN I SHOULD OF ANSWERED YES. THIS WAS A MISTAKE.

THE CLIENT ALLEGES THAT ORDERS TO LIQUIDATE WERE NOT FOLLOWED.

$6,012.70

$6,021.70

THIS MATTER WAS SETTLED AS A BUSINESS DECISION AND TO AVOID THE COSTS AND UNCERTAINTIES ASSOCIATED WITH LITIGATION.

CUSTOMER ALLEGES THAT SHE WAS UNAWARE THAT SHE WOULD INCUR SURRENDER CHARGES ON PARTIAL WITHDRAWALS TAKEN TO SATISFY HER MINIMUM MANDATORY DISTRIBUTION REQUIREMENTS FROM AN ANNUITY HELD IN HER IRA ACCOUNT.

$12,586.76

MATTER SETTLED. WE ALLOWED CLIENT TO SURRENDER POLICY WITHOUT PENALTY AND WAIVED THE NEGATIVE MARKET VALUE ADJUSTMENT AMOUNT. SETTLEMENT AMOUNT $12,586.76. FINANCIAL CONSULTANT CONTENDS THAT THE CLIENT WAS AWARE OF THE MANDATORY DISTRIBUTION REQUIREMENTS, AND THAT THE ALLEGATIONS STEMMED FROM ADVISE SHE RELIED ON FROM SOMEONE OUTSIDE OF MERRILL LYNCH. HOWEVER, SINCE IT COULD NOT BE PROVEN THAT SHE WAS SATISFYING HER MINIMUM DISTRIBUTION REQUIREMENTS WITH INVESTMENTS ELSEWHERE, A BUSINESS DECISION WAS MADE TO SETTLE THIS MATTER.

IT WAS ALLEGED THAT THE ACCOUNT WAS EXCESSIVELY TRADED AND THAT MISREPRESENTATIONS AND OMMISSIONS OF MATERIAL FACT WERE MADE AND THAT CUSTOMER WAS UNSUITABLE. DAMAGES ALLEGED - $139,215.11 AND $1,000,000.00 PUNITIVE DAMAGES (DISMISSED).

$139,215.11

$48,250.00

THIS MATTER WAS SETTLED TO AVOID THE RISKS AND CONTINUED EXPENSES OF THE FEDERAL COURT LITIGATION AND JURY TRIAL AND THE EXPENSE IN CONNECTION WITH THE ALMOST CERTAIN ARBITRATION OF THE COMMON LAW CLAIMS NOT TRIED IN THE FEDERAL PROCEEDING. MERRILL LYNCH PAID THE CUSTOMER $48,250.00. THE CUSTOMER WAS IN HIS MID TWENTIES WITHOUT FAMILY OBLIGATIONS, A COLLEGE GRADUATE AND, IN MERRILL LYNCH'S VIEW, SUITABLE FOR THE TRANSACTIONS IN HIS ACCOUNT. EACH TRADE ENTERED FOR THE CUSTOMER WAS SPECIFICALLY REQUESTED AND AUTHORIZED BY HIM. MERRILL LYNCH DID NOT "CONTROL" THE ACCOUNT, NOR DID IT ENTER TRADES FOR THE PURPOSE OF GENERATING COMMISSION. THE CUSTOMER WAS INFORMED OF AND WAS AWARE OF THE RISKS ASSOCIATED WITH HIS TRADING. A SIGNIFICANT PORTION OF THE LOSSES WERE RELATED TO THE OCTOBER, 1987 CRASH. THE ACCOUNT WAS INHERITED FROM JAMES DEMURO IN SEPTEMBER 1987. 90% - 95% OF LOSSES HAVE BEEN INCURRED PREVIOUS TO MY INHERITING THE ACCOUNT. I HANDLED THE ACCOUNT FOR LESS THAN ONE MONTH.