CLIENT CLAIMS THE IR INVESTED THEIR $70,000 INTO AN INVESTMENT WITH A LOCKED RATE OF 7 1/4 % AND THAT THE INTEREST CHECK WOULD BE $408 PER MONTH. ACCORDING TO THE CLIENT, THEY ASKED THE IR IF THEY COULD LOSE ANY OF THEIR $70,000 AND THAT THE IR ASSURED THEM THEY WOULD NOT. THE CLIENT CLAIMS TO HAVE SUBSEQUENTLY INQUIRED INTO THEIR $70,000 INVESTMENT AND ALLEGES THAT THE IR INFORMED THEM THAT THEY ONLY HAD $38,000 LEFT BECAUSE THE $408 MONTHLY DISTRIBUTION WAS BEING TAKEN FROM THE PRINCIPAL. CLIENT IS ASKING FOR SOME OF THEIR INVESTMENT BACK. ALLEGED LOSSES EXCEED $5,000.

$5,000.00

A REVIEW OF OUR RECORDS INDICATES THAT CLIENT HAS OWNED MUTUAL FUNDS SINCE 2000. THE CLIENT WAS RECEIVING A MONTHLY DISTRIBUTION OF $408 SINCE 2000. ACCORDING TO THE IR, HE DISCUSSED IN DETAIL THE MUTUAL FUND PROSPECTUS AND SHOWED THE CLIENT ILLUSTRATIONS REGARDING THE INVESTMENTS. ACCORDING TO THE IR, HE DISCUSSED WITH THE CLIENT TO HAVE CLIENT'S MONTHLY DISTRIBUTION LOWERED AND THE CLIENT ELECTED TO KEEP HIS DISTRIBUTION AMOUNT THE SAME REGARDLESS OF WHAT THE IR RECOMMENDED. BASED UPON OUR RESEARCH IT DOES NOT APPEAR THE IR MISLED THE CLIENT AND IT DOES NOT APPEAR THE INVESTMENTS WERE UNSUITABLE. REQUEST FOR REIMBURSEMENT DENIED.

THE CLIENT QUESTIONS THE SUITABILITY OF BUYING AND SELLING 34 STOCKS IN A THREE YEAR TIME PERIOD. IN ADDITION, THE CLIENT IS NOT HAPPY WITH THE PERFORMANCE OF FOUR RECENTLY PURCHASED STOCKS WHICH HE STATES HAVE DECREASED IN VALUE APPROXIMATELY $8,000.

$8,000.00

THOMAS STATES THE CLIENT HAS DIRECTED THE TRANSACTIONS EFFECTED IN HIS ACCOUNT. FURTHERMORE, THOMAS HAS CONSISTENTLY DISCOUNTED THE COMMISSIONS ON THESE TRANSACTIONS. THE CLIENT HAS TAKEN SUBSTANTIAL SYSTEMMATIC WITHDRAWALS, APPROXIMATELY $35,000 SINCE THE ACCOUNT INCEPTION. THOMAS STATES HE EXPLAINED TO THE CLIENT THAT THE RETURN ON THE INVESTMENTS WOULD NOT MAKE UP FOR THE WITHDRAWALS. CLAIM DENIED