MISREPRESENTATION, NEGLIGENCE, BREACH OF FIDUCIARY DUTY, BREACH OF CONTRACT, FRAUD. DATES OF ALLEGED ACTIVITIES: 1/17/2008 - 1/28/2008.

$141,000.00

$70,500.00

[NOTE: SETTLEMENT OF $70,500 REPRESENTS PARTIAL COMPENSATION ON CLIENT'S LOSS ON AUCTION RATE PREFERRED SECURITIES.] I STRONGLY DISAGREE WITH ASSERTSIONS MADE BY THIS CLIENT. MY ASSOCIATE AND I SPOKE WITH THIS CLIENT ALMOST DAILY SINCE THE ACCOUNT WAS OPENED. WE DISCUSSED EVERY SECURITY THAT WAS BOUGHT AS IT WAS BOUGHT EVEN THOUGH I HAD DISCRETIONARY AUTHORITY TO TRADE AS I DEEMED APPROPRIATE. AFTER HE HAD BEEN WITH US FOR A COUPLE OF MONTHS AND THERE WAS TURBULENCE IN THE MARKETS, HE SAID TO US THAT HE HAS MENTAL ILLNESS AND IS AN INSOMNIAC. OF COURSE THIS WAS AFTER THE CREDIT MARKETS HAD FROZEN AND HE WAS TRYING TO FIGURE A WAY TO GET OUT. AS HIS ARPS HAD BECOME ILLIQUID, HE STILL HAD LIQUIDITY FOR ALMOST $1 MILLION AND WE HAD PREACHED TO HIM TO STAY PATIENT AND LET THE MARKETS WORK THEIR WAY OUT. HE REFUSED AND CHOSE TO SELL HIS AUCTION RATE SECURITIES AGAINST OUR RECOMMENDATIONS TO AN OUTSIDE FIRM FOR ROUGHLY 60 CENTS ON THE DOLLAR. HE DID NOT HAVE TO DO THIS AS HE HAD PLENTY OF LIQUIDITY AND COULD WEATHER THE STORM. HE ALSO STATED THAT WE DENIED HIM A LOAN AGAINST HIS ARP'S. ONE CANNOT BE DENIED IF THEY DO NOT APPLY FOR A LOAN. WELLS FARGO WAS OFFERING NON-RECOURSE LOANS UP TO 90%. THE FIRM DECIDED TO SETTLE THIS CASE WITHOUT GOING TO ARBITRATION. ALTHOUGH I WAS ADAMANT ABOUT BEING 100% ABOVE BOARD AND IN PROPER CONDUCT AND THAT THE FACTS AS STATED BY THE CLIENT WERE INACCURATE, THE FIRM DECIDED TO SETTLE FOR HALF THE MONEY THE CLIENT WAS SEEKING. I BELIEVE THE CLAIM SHOULD HAVE BEEN DENIED. THE FIRM SETTLED WITHOUT MY INPUT AND I FEEL MY INTERESTS WERE NOT REPRESENTED BY THE FIRM.

THE COMPLAINT AROSE OUT OF THE SALE OF AN AUCTION RATE SECURITY (ARS)THAT WAS MADE PRIOR TO THE WIDESPREAD ILLIQUIDITY IN THE ARS MARKET THAT OCCURRED IN FEBRUARY 2008. TRADE DATE 2/7/2008.

$325,000.00

THE FIRM REPURCHASED THE ARS SECURITIES AT ISSUE FROM THE CLIENT PURSUANT TO A GLOBAL REPURCHASE AGREEMENT IT ENTERED WITH SEVERAL REGULATORY BODIES. THIS WAS NOT A TRADITIONAL SETTLEMENT OF A DISPUTE BETWEEN THE CLIENT AND THE REPRESENTATIVE. THE NAMED REPRESENTATIVE: WAS NOT A PARTY TO, AND DID NOT AGREE TO OR PARTICIPATE IN, THE REPURCHASE AGREEMENT BETWEEN THE FIRM AND REGULATORS; 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 REPURCHASE AMOUNT. THIS MATTER IS BEING REPORTED AS A SETTLEMENT PURSUANT TO THE REQUIREMENTS OF FINRA REGULATORY NOTICE 09-12.

THE COMPLAINT AROSE OUT OF THE SALE OF AN AUCTION RATE SECURITY (ARS)THAT WAS MADE PRIOR TO THE WIDESPREAD ILLIQUIDITY IN THE ARS MARKET THAT OCCURRED IN FEBRUARY 2008. TRADE DATE 9/23/2009.

$175,000.00

THE FIRM REPURCHASED THE ARS SECURITIES AT ISSUE FROM THE CLIENT PURSUANT TO A GLOBAL REPURCHASE AGREEMENT IT ENTERED WITH SEVERAL REGULATORY BODIES. THIS WAS NOT A TRADITIONAL SETTLEMENT OF A DISPUTE BETWEEN THE CLIENT AND THE REPRESENTATIVE. THE NAMED REPRESENTATIVE: WAS NOT A PARTY TO, AND DID NOT AGREE TO OR PARTICIPATE IN, THE REPURCHASE AGREEMENT BETWEEN THE FIRM AND REGULATORS; 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 REPURCHASE AMOUNT. THIS MATTER IS BEING REPORTED AS A SETTLEMENT PURSUANT TO THE REQUIREMENTS OF FINRA REGULATORY NOTICE 09-12.

THE COMPLAINT AROSE OUT OF THE SALE OF AN AUCTION RATE SECURITY (ARS)THAT WAS MADE PRIOR TO THE WIDESPREAD ILLIQUIDITY IN THE ARS MARKET THAT OCCURRED IN FEBRUARY 2008. TRADE DATE 12/6/2007.

$25,000.00

THE FIRM REPURCHASED THE ARS SECURITIES AT ISSUE FROM THE CLIENT PURSUANT TO A GLOBAL REPURCHASE AGREEMENT IT ENTERED WITH SEVERAL REGULATORY BODIES. THIS WAS NOT A TRADITIONAL SETTLEMENT OF A DISPUTE BETWEEN THE CLIENT AND THE REPRESENTATIVE. THE NAMED REPRESENTATIVE: WAS NOT A PARTY TO, AND DID NOT AGREE TO OR PARTICIPATE IN, THE REPURCHASE AGREEMENT BETWEEN THE FIRM AND REGULATORS; 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 REPURCHASE AMOUNT. THIS MATTER IS BEING REPORTED AS A SETTLEMENT PURSUANT TO THE REQUIREMENTS OF FINRA REGULATORY NOTICE 09-12.

THE COMPLAINT AROSE OUT OF THE SALE OF AN AUCTION RATE SECURITY (ARS) THAT WAS MADE PRIOR TO THE WIDESPREAD ILLIQUIDITY IN THE ARS MARKET THAT OCCURRED IN FEBRUARY 2008. ACTIVITY DATE(S): 9/13/2007-12/7/2007

$150,000.00

THE FIRM REPURCHASED THE ARS SECURITIES AT ISSUE FROM THE CLIENT PURSUANT TO A GLOBAL REPURCHASE AGREEMENT IT ENTERED WITH SEVERAL REGULATORY BODIES. THIS WAS NOT A TRADITIONAL SETTLEMENT OF A DISPUTE BETWEEN THE CLIENT AND THE REPRESENTATIVE. THE NAMED REPRESENTATIVE: WAS NOT A PARTY TO, AND DID NOT AGREE TO OR PARTICIPATE IN, THE REPURCHASE AGREEMENT BETWEEN THE FIRM AND REGULATORS; 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 REPURCHASE AMOUNT. THIS MATTER IS BEING REPORTED AS A SETTLEMENT PURSUANT TO THE REQUIREMENTS OF FINRA REGULATORY NOTICE 09-12.

COMPLAINT ALLEGED MISREPRESENTATION IN CONNECTION WITH AUCTION RATE PREFERRED SECURITIES PURCHASED BETWEEN JULY 20, 2007 AND OCTOBER 18, 2007. INITIAL COMPLAINT WAS NOT REPORTABLE AS CLIENT REQUESTED THE FIRM TO REPURCHASE HIS ARP AND MADE NO OTHER CLAIMS FOR DAMAGES.

$225,000.00

THIS ISSUE AROSE AS A RESULT OF UNPRECEDENTED ILLIQUIDITY IN THE AUCTION-RATE SECURITIES MARKET, A SITUATION THE REPRESENTATIVE DID NOT CAUSE AND OVER WHICH THE REPRESENTATIVE HAD NO CONTROL. COMPLAINT IS BEING CLOSED BECAUSE FIRM AGREED TO REPURCHASE SECURITIES TO PROVIDE LIQUIDITY TO CUSTOMER TO RESOLVE DISPUTED CLAIMS. THE RESOLUTION DOES NOT REFLECT ANY FINDING OF MISCONDUCT BY THE REPRESENTATIVE. ALTHOUGH THE SECURITIES REPURCHASED BY THE FIRM ARE CURRENTLY VALUED AT PAR BY INDEPENDENT THIRD-PARTY PRICING SERVICE, BASED ON FINRA REGULATORY NOTICE 09-12 THE SETTLEMENT AMOUNT IS BEING REPORTED AS THE FULL PAR VALUE OF SECURITIES. [PER REP: THIS CLIENT HAD BEEN PURCHASING AUCTION RATE PREFERREDS SINCE 2004! HE UNDERSTOOD WHAT HE WAS BUYING WITH THE EXCEPTION THAT NONE OF US UNDERSTOOD THAT THE INDUSTRY COULD COLLAPSE & THEREFORE CREATE AN ILLIQUID MARKET BASED ON ALL DISCLOSED FACTS PRESENTED BY THE FIRMS THAT ISSUED THESE PRODUCTS AND THAT WELLS FARGO SUPPORTED THESE PRODUCTS TO THEIR BROKERS, I WAS IN NO POSITION TO ASSUME THE MARKET COULD ABRUPTLY HALT. HAD WELLS FARGO ACCOMMODATED THIS CLIENT'S REQUEST WHEN THE COMPLAINT OR REQUEST WAS FILED, THERE WOULD HAVE BEEN NO REASON TO SUBMIT THIS AMENDMENT AS NOTHING HAS CHANGED IN THE PAST YEAR.]

CLIENT ALLEGED UNAUTHORIZED TRADES.

$36,820.43

THE CUSTOMER MENTIONED THAT HIS SON-IN-LAW, BOB FERAHI, WAS ADVISING HIM ON MANAGING HIS MONEY. WHEN- EVER WE DISCUSSED HIS AFFAIRS, HE WAS GOING TO CONSULT BOB. THIS PROMPTED AT LEAST 2 APPOINTMENTS WITH BOTH THE CUSTOMER & BOB FACE TO FACE. IN ADDITION, WE HAD CONFERENCE CALLS WITH ALL 3 OF US ON THE LINE. THE DAY OF PURCHASE OF POLAROID BOND WAS SAME DAY THAT WE PURCHASED FRANKLIN FUND. THE CUSTOMER & I SAT IN BEVERLY HILLS OFFICE TOGETHER FOR OVER 2 HOURS DISCUSSING POTENTIAL INVESTMENT OPTIONS THAT HAD BETTER GROWTH POTEN- TIAL THAN CDS & T-BILLS. WE HAD A CONVERSATION VIA CONFERENCE CALL WITH BOB FERAHI. I NOT ONLY DISCUSSED INVESTMENT IN GREAT DETAIL BUT ALSO SHOWED THE CUSTOMER BOND ON COMPUTER SCREEN WHICH SHOWED BOND AND ITS RATING. AT THAT TIME I EXPLAINED THAT MORE RETURN EQUALS MORE RISK. BONDS THAT HAVE INTEREST RATES SIGNIFI- CANTLY HIGHER THAN T-BILLS & CDS ARE BECAUSE THEY AREN'T AS FINANCIALLY STABLE AS THESE OTHER INVESTMENTS. I EVEN WENT AS FAR AS SHOWING HIM HOW WE MAKE TRADES & BOUGHT THE SECURITIES WHILE HE WATCHED. BOTH THE CUSTOMER & BOB WERE BOTH AWARE OF TRANSACTIONS AS THEY HAD CONVERSATIONS IN FRONT OF ME IN BOTH ENGLISH & FARSEID (PERSIAN) WHILE WE WERE ON SPEAKERPHONE. THE CUSTOMER REQUESTED A MEETING DEC 13TH IN BEVERLY HILLS OFFICE. HE REQUESTED WE REVIEW HIS ACCOUNTS AGAIN AFTER AT LEAST 6 MEETINGS THROUGHOUT COURSE OF YEAR. AS I WENT OVER HIS ACCOUNTS, HE WAS FRUSTRATED WITH FRANKLIN FUND & SAID THAT HE DOESN'T WANT ANYTHING OTHER THAN CDS. AS I TRIED TO CONVINCE HIM TO STICK OUT INVESTMENT HE WAS ADAMANT THAT HE WANTED OUT OF FUND. I REMINDED HIM THAT IF HE WERE TO GET OUT OF FUND WITHIN 1ST YEAR, THERE WOULD BE 1% SURRENDER CHARGE. THE FUND ALSO HAS ONLY QUARTERLY REDEMPTION PERIODS. ALTHOUGH HE WAS NOT HAPPY ABOUT SURRENDER CHARGE HE SAID, "I WANT MY MONEY OUT AS SOON AS POSSIBLE." AT TENDER PERIOD AT END OF DEC, I PROCEEDED TO LIQUIDATE FRANKLIN FUND PER HIS REQUEST. PROPER DUE DILIGENCE WAS DONE