MERRILL LYNCH, PIERCE, FENNER & SMITH INCORPORATED

Discharged

CONDUCT INCLUDING SENDING UNAPPROVED CORRESPONDENCE TO A CLIENT, FAILURE TO REPORT SUSPICIOUS ACTIVITY TO MANAGEMENT AND FAILURE TO FOLLOW MANAGEMENT'S DIRECTIVE RELATED TO A CLIENT'S BUSINESS.

CUSTOMER STATES THEY WERE UNAWARE THAT THEY WERE TAKING ASSETS FROM A SAVINGS ACCOUNT AND PLACING THEM INTO AN INVESTMENT ACCOUNT WITH RISK. (08/22/2007)

$11,900.00

COMPLAINT DENIED.

GA CLIENT, THROUGH HER ATTORNEY-IN-FACT, CLAIMS THAT HER ADVISOR DID NOT PROPERLY DISCLOSE THE TAX CONSEQUENCES ARISING FROM HER SALE OF STOCK. CLIENT, WHO COMPLETED THIS TRANSACTION IN MAY 2003, CLAIMS THAT SHE INCURRED A $45,000 TAX LIABILITY.

$45,000.00

CLAIM DENIED. ADVISOR IS ABSOLUTELY CERTAIN THAT HE DID NOT PROVIDE THE CLIENT WITH ANY TAX ADVICE REGARDING THIS OR ANY OTHER TRANSACTION, AND HE REPEATEDLY INFORMED HER THAT SHE SHOULD SEEK PROFESSIONAL TAX ADVICE.

CLIENT CLAIMS UNSUITABLE MUTUAL FUNDS PURCHASED SINCE 6/01/02. DAMAGES UNSPECIFIED BUT APPEARS TO SEEK MORE THAN $5000.00

$5,001.00

ON 10/17/02, THE FIRM SENT THE CLIENT A LETTER DENYING HER CLAIMS.

CLIENT ALLEGES THAT INVESTMENTS RECOMMENDED BY THE REPRESENTATIVE WERE UNSUITABLE AS TO INVESTMENT OBJECTIVES FOR HER AND HER TWO SONS.

$28,729.42

CLIENT'S REQUEST FOR ACCOMMODATION WAS DENIED. AN INDEPENDENT REVIEW AS CONDUCTED BY COMPLIANCE OF BOTH DOCUMENTATION AND PROFILE INFORMATION INDICATED THAT THEY RECOMMENDED MUTAL FUNDS WERE CONSISTENT WITH THE CLIENT'S INVESTMENT OBJECTIVES

MICHIGAN

FAILURE TO PAY THE BALANCE OF THE $30 1989 RENEWAL FEE, IN THE AMOUNT OF $15

Decision

Revocation/Expulsion/Denial

DOUGLAS WARREN SMITH'S REGISTRATION WAS REVOKED DUE TO THE FAILURE TO PAY THE BALANCE OF THE $30 1989 RENEWAL FEE, IN THE AMOUNT OF $15.

THE BROKER DEALER I WAS PREVIOUSLY REGISTERED WITH POWER SEC. LAS VEGAS NV WENT OUT OF BUSINESS FEB. 1989. I WAS TOLD REGISTRATION RENEWAL FEES WERE PAID. I U4'D WITH A NEW FIRM (B.C. FINANCIAL) IN FEB 89 AND PAID NEW REGISTRATION FEES. SINCE I NEVER DID ANY BUSINESS OR HAD ANY CLIENTS IN THE STATE OF MICH. I NEVER REAPPLIED. MICH MADE NO ATTEMPT TO NOTIFY ME OF THE REVOCATION THEREFORE ITS EXISTENCE WAS UNKNOWN TO ME. IN SHORT RENEWAL FEE WAS NEVER PAID BECASUE I DIDN'T KNOW IT NEEDED TO BE.