CUSTOMER ALLEGED NON-DISCLOSURE OF MKT RISK ON INVESTMENT IN STAGECOACH CAL TAX-FREE BOND FUND.

$50,000.00

PAYMENT TO THE CUSTOMER OF THE ORIGINAL PRINCIPAL AMOUNT OF $50,000 CONSISTED OF RETURN OF PRINCIPAL. THE SETTLEMENT OF THIS CLAIM DOES NOT CONSTITUTE A FINDING OF WRONGDOING BY EITHER THE FIRM OR REGISTERED REPRESENTATIVE A FEW WEEKS AFTER THE ORIGINAL TRADE CLIENT NO LONGER WANTED ACCOUNT. CLIENT HAD SIGNED AN INVESTMENT ACKNOWLEDGEMENT THAT AMONG OTHER THING DISCLOSED THE FACT THAT MUTUAL FUNDS ARE NOT FDIC INSURED AND ARE SUBJECT TO INVESTMENT RISK INCLUDING THE POSSIBLE LOSS OF PRINCIPAL. THIS ACKNOWLEDGEMENT IS SIGNED AND EACH DISCLOSURE IS INITIATED BY CLIENTS

UNSUITABLE INVESTMENT RECOMMENDATION FOR PURCHASE OF DEAN WITTER REALTY YIELD PLUS II. INVESTED 150,00 ON 12/89 & SOUGHT RESCISSION OF INVESTMENT. ALLEGATIONS WERE FOCUSED TOWORD THE AMOUNT OF THE INVESTMENT IN RELATION TO TOTAL NET WORTH.

DEAN WITTER AGREED TO REPURCHASE $100,000 OF CUSTOMERS ORIGINAL INVESTMENT WITH CUSTOMER AGREEING TO HOLD $50,000. THERE WERE NO FINES OR PENALTIES PAID AND NO DISCIPLINARY ACTION TAKEN. I REFUSE TO ANSWER YES TO QUESTION 22H1 FOR THE FOLLOWING REASON. THIS EVENT BEGAN WHEN [CUSTOMER'S] STEP-SON OBTAINED A POWER OF ATTORNEY OVER THE [CUSTOMERS] PERSONAL AND BUSINESS AFFAIRS. THE [CUSTOMERS] HAD BEEN MY CLEINTS FOR APPROX. 3 YEARS. THE STEP-SON WHO WAS LICENSED TO SELL ANNUITIES, WISHED TO SELL [CUSTOMERS] A FIXED ANNUITY. AFTER HAVING LIQUIDATED $200,000 IN GOVT SECURITIES FOR THIS PURPOSE PREVIOUSLY, STEP-SON WISHED TO LIQUIDATE THIS INVESTMENT FOR AN ADDITIONAL ANNUITY, BECAUSE OF FEE'S ASSOC. WITH LIQUIDATION STEP-SON ASKED TO HAVE THE INVESTMENT REPURCHASED.