CUSTOMER SUBMITTED A LETTER OF COMPLAINT ALLEGING THAT THE REP DID NOT FOLLOW HER INSTRUCTION TO LOWER THE RISK ON THE 'HIGH RISK' ASSET ALLOCATION FOR HER HUSBAND'S IRA FOR WHICH SHE HAD POWER OF ATTORNEY. THE FIRM'S REVIEW OF THE ACCOUNT INDICATES THAT THE PORTFOLIO WAS POSITIONED IN MODERATE RISK MUTUAL FUNDS AT ALL TIMES DURING THE LIFE OF THE ACCOUNT AND, IN FACT, THAT [CUSTOMER] NEVER ASKED THE REP TO MAKE ANY CHANGES IN THAT REGARD. CUSTOMER ALSO ALLEGED A LOSS IN THE ACCOUNT IN THE AMOUNT OF $71,000 FOR THE PERIOD 4/21/08-9/5/08 DUE TO WHAT SHE CHARACTERIED AS THE 'HIGH RISK' NATURE OF THE ACCOUNT. WHILE IT IS TRUE THAT THE ACCOUNT INCURRED A LOSS, IT WAS NOT DUE TO THE ASSET ALLOCATION. DURING THAT TIME PERIOD, THERE WERE DISTRIBUTIONS TAKEN IN THE AMOUNT OF $9000. ADDITIONALLY, AS THIS WAS THE TIME PERIOD IN WHICH ECONOMIC TRENDS WERE DEVELOPING THAT AFFECTED ALL GROWTH ACCOUNTS UNIVERSALLY, THE ACCOUNT DID INCUR AN UNREALIZED LOSS OF $31,809 DUE TO MARKET PERFORMANCE.

$71,000.00

[CUSTOMER] HAS ASKED THAT THERE BE SANCTIONS AGAINST THE FIRM AND THE REP AND THAT "SOME OF THE MONIES BE RECOUPED". THE FIRM'S INVESTIGATION HAS INDICATED THAT THE REP, KEN COMO, ACTED IN ACCORDANCE WITH ALL CLIENT COMMUNICATIONS AND ALWAYS WITH HER HUSBAND'S AND HER BEST INTEREST. HE ALSO ACTED IN ACCORDANCE WITH THE FIRM'S POLICIES AND PROCEDURES AND GENERAL PHILOSOPHIES IN TERMS OF PUTTING THE CLIENT'S INTERESTS FIRST AT ALL TIMES. THEREFORE, THE FIRM HAS TAKEN NO FORMAL OR INFORMAL ACTION AGAINST MR. COMO. WITH REGARD TO LOSSES TO BE RECOUPED, THE FIRM HAS DETERMINED THAT ANY LOSSES WERE AS A RESULT OF MARKET PERFORMANCE IN AN APPROPRIATELY POSITIONED ASSET ALLOCATION BASED UPON STATED GOALS AND OBJECTIVES FOR THE ACCOUNT.

WITHOUT SUBMITTING A WRITTEN COMPLAINT WITH SPECIFIC ALLEGATIONS TO THE BROKER/DEALER OR REP, THE CUSTOMER FILED AN ARBITRATION REQUEST(CASE NUMBER 07-02851)WITH FINRA REQUESTING $4448 IN DAMAGES ALLEGING THAT THE REP FAILED TO FOLLOW THE CUSTOMER'S INSTRUCTIONS. A SETTLEMENT WAS IMMEDIATELY REACHED AND THE ARBITRATION WAS DISMISSED.

$4,448.00

$4,448.00

DAMAGES OF $4448 WAS REQUESTED BY CUSTOMER THEREFORE ITEM 14I(3)(A)IS ANSWERED IN THE NEGATIVE. HOWEVER, THE SETTLEMENT OFFER INCLUDED INTEREST BRINGING THE TOTAL PAID TO CUSTOMER TO $5804.30