CLIENT'S ATTORNEY IS ALLEGING JOHN VONDRA, THE IR, TOLD THE CLIENT THE FIDELITY GNMA SHE OWNED WAS A BAD INVESTMENT AND SHE SHOULD SELL IMMEDIATELY. CLAIMS IR SOLD THIS AND TWO OTHER FIDELITY FUNDS WITHOUT AUTHORIZATION AND THE PROCEEDS WERE USED TO BUY POLARIS II VAR ANNUITY ALSO WITHOUT AUTHORIZATION. ALSO CLAIMS CLIENT'S OBJECTIVES WERE LIQUIDITY, CASH FLOW AND SECURITY BUT WAS PUT INTO AN ANNUITY INVESTING 100% IN STOCKS. CLIENT CLAIMS SHE WAS NEVER COMFORTABLE WITH ANNUITIES BUT KEPT IT BECAUSE OF DEATH BENEFIT. CLAIMS THE DEATH BENEFIT WAS WRONG AMOUNT BECAUSE IR PUT WRONG DATE OF BIRTH DOWN ON APPLICATION. REQUESTS RETURN OF ORIGINAL INVESTMENT OF POLARIS ANNUITY PLUS INTEREST AND EXPENSES EVEN IF IF TURNS OUT THAT CLIENT DID AUTHORIZE PURCHASE BECAUSE IT WAS UNSUITABLE. LOSSES OVER $5,000

$5,000.00

OUR RECORDS INDICATE CUSTOMER AFFIRMED, IN WRITING, SHE RECEIVED THE POLARIS II CONTRACT, NUMBERED [CONTRACT NUMBER], AND WAS AWARE THIS WAS A VARIABLE PRODUCT AND NOT GUARANTEED AS TO A FIXED RETURN. THIS CONFIRMATION ALSO STATES CUSTOMER RECEIVED CURRENT PROSPECTUSES AND SHE READ THEM CAREFULLY AND UNDERSTOOD THEIR CONTENTS. OUR RECORDS FURTHER INDICATE CUSTOMER ACKNOWLEDGED, IN WRITING, HER UNDERSTANDING OF THE TERMS OF THE SURRENDER SCHEDULE OF THE NEW CONTRACT AND THE DCA RATE ALONG WITH THE ALLOCATIONS TO THE SUBACCOUNTS. OUR RECORDS ALSO INDICATE CUSTOMER CURRENTLY OWNS A HARTFORD DIRECTOR VI VARIABLE ANNUITY PURCHASED MARCH 12, 1996. BASED ON MY REVIEW, IT APPEARS CUSTOMER WAS PROVIDED WITH DETAILS OF THIS INVESTMENT, TO INCLUDE CURRENT PROSPECTUSES AND CUSTOMER ACCOUNT STATEMENTS. IT APPEARS CUSTOMER'S ACCOUNT HAS BEEN HANDLED PROPERLY. THE ADDITION OF THE POLARIS II VARIABLE ANNUITY ALONG WITH CUSTOMER'S OTHER HOLDINGS APPEARS TO BE SUITABLE AND REPRESENTS A REASONABLE PORTION OF HER STATED NET WORTH. REQUEST FOR REIMBURSEMENT OF THE ORIGINAL INVESTMENT PLUS INTEREST IS RESPECTFULLY DENIED.

D.A. DAVIDSON & CO.

Permitted to Resign

N/A SUSPECTED USE OF PROSPECTING INFORMATION BELIEVED TO BE OBTAINED IN AN UNAUTHORIZED MANNER.

THIRD PARTY NON SECURITIES INDUSTRY INDIVIDUALS INVOLVED HAVE REQUESTED ANONYMITY AND CONFIDENTIALITY AND ARE FULLY SATISFIED WITH THE RESOLUTION OF THIS MATTER. ON WEDNESDAY, DECEMBER 28, 1987, I WAS MAKING SOME PHONE CALLS AT APPROX. 8:00 P.M. AND WENT DOWNSTAIRS TO WHERE THE POP MACHINES ARE FOR A CAN OF POP. THE BASEMENT BUILDING IS BASICALLY VACANT EXCEPT FOR A COUPLE OF ROOMS. I SAW A DOOR OPEN THAT WAS NORMALLY SHUT AND I WALKED DOWN THE HALL. AS I APPROCHED THE DOOR, I WAS ASKED BY A JANITOR, WHO CAME BEHIND ME, IF SHE COULD HELP ME. I TOLD HER THAT I WAS JUST SNOOPING AROUND AND SHE SAID THAT I SHOULD NOT BE IN THAT AREA. I DID NOT REALIZE THE SENSITIVITY OF THE AREA OR THAT IT WAS AN ACTIVE AREA OF THE 1ST INTERSTATE BANK.