CLAIMANTS ALLEGE BREACH OF FIDUCIARY DUTY, NEGLIGENT MISREPRESENTATION, OMISSIONS, FRAUD, UNSUITABLE RECOMMENDATIONS AND VIOLATIONS OF THE COLORADO SECURITIES ACT IN CONNECTION WITH THE RECOMMENDED PURCHASE OF AUCTION RATE SECURITIES IN CLAIMANTS' UBS ACCOUNT.

$238,250.00

$255,000.00

FOLLOWING AN INVESTIGATION, THE FINANCIAL ADVISOR HAD NO TANGENTIAL AFFECT OF THE PURCHASE OF THE AUCTION RATE SECURITIES. UPON REVIEW, THE FINANCIAL ADVISOR PRESENTED ALTERNATIVE SOLUTIONS TO THE AUCTION RATE SECURITIES. THE PLANTIFF DIRECTED THE FINANCIAL ADVISOR TO PURCHASE THE SECURITIES IN QUESTION. THE COMPLAINT AROSE BECAUSE OF UNPRECEDENTED MARKET EVENTS THAT CAUSED THE BREAKDOWN OF LIQUIDITY IN THE MARKET FOR AUCTION RATE SECURITIES. THE FIRM, UBS, AGREED TO REPURCHASE THE ARS SECURITIES AT ISSUE AT PAR VALUE FROM THE CLIENT. THIS WAS NOT A SETTLEMENT OF A DISPUTE BETWEEN THE CLIENT AND THE REPRESENTATIVE AND WAS NOT BASED ON THE MERITS OF THE CLIENT'S SPECIFIC CONCERNS OR ANY FINDING OF FAULT OR WRONGDOING BY THE NAMED REPRESENTATIVE. THE NAMED REPRESENTATIVE WAS NOT A PARTY TO, AND DID NOT AGREE TO OR PARTICIPATE IN, THE REPURCHASE AGREEMENT BETWEEN THE FIRM AND THE CLIENT. THE NAMED REPRESENTATIVE DID NOT MAKE ANY PAYMENTS TO THE CLIENT AND THE NAMED REPRESENTATIVE WAS NOT ASKED TO AND DID NOT CONTRIBUTE TO THE SETTLEMENT AMOUNT. THE LISTED "SETTLEMENT AMOUNT" REPRESENTS ONLY THE GROSS INITIAL PAR VALUE OF THE ARS POSITION AND DOES NOT TAKE INTO ACCOUNT THE ACTUAL VALUE OF THE ARS POSITION AT THE TIME THE FIRM RECEIVED IT BACK FROM THE CLIENT IN CONNECTION WITH THE SETTLEMENT. THIS MATTER IS BEING REPORTED AS A SETTLEMENT PURSUANT TO THE REQUIREMENTS OF FINRA REGULATORY NOTICE 09-12.