CLIENT SURRENDER A SCUDDER ANNUITY IN DECEMBER 2006. CLIENT CLAIMS SHE ADVISED THE FA TO SPEAK WITH HER FORMER ADVISOR PRIOR TO HAVING THE ANNUITIES SURRENDERED. CLIENT INDICATES SHE INCURRED A $4,000.00 SURRENDER CHARGE AND ALSO LOST $10,000.00 AS A RESULT OF NOT BEING ABLE TO TAKE ADVANTAGE OF A GUARANTEED INCOME RIDER ON THE ANNUITY THAT WAS SURRENDERED.*****ARBITRATION: ALLEGATIONS THAT CO-RESPONDENT FAILED TO CONTACT CLAIMANT'S PREVIOUS BROKER, AND AS A RESULT CLAIMANT SUFFERED $14,000 IN LOSSES RESULTING FROM THE LIQUIDATION OF HER ANNUITY. (AMOUNT CLAIMED: COMPENSATORY DAMAGES IN THE AMOUNT OF $14,000.)

$14,000.00

$10,500.00

AS PREVIOUSLY INDICATED, IT WOULD APPEAR AS THOUGH THE GRIB WOULD APPLY ONLY IF THE CLIENT ELECTED TO ANNUITIZE THE CONTRACT. IN ADDITION, AS THE FA HAS INDICATED THE ANNUITY WAS SURRENDERED IN AN EFFORT TO CONSOLIDATE THE CLIENT'S IRA ACCOUNTS, REDUCE HER TOTAL EXPENSES AND DIVERSIFY HER PORTFOLIO. IT IS OUR OPINION THE ANNUITY WAS SURRENDERED WITH THE CLIENT'S KNOWLEDGE AND AUTHORIZATION. HOWEVER, IN AN EFFORT TO RESOLVE THIS SITUATION, WE ARE EXTENDING AN OFFER TO THE CLIENT IN THE AMOUNT OF $2,000.00. CLIENT HAS THIRTY DAYS TO CONSIDER OUR OFFER. CLIENT DID NOT ACCEPT OUR OFFER; THEREFORE, IT HAS BEEN WITHDRAWN.*****ARBITRATION RESOLUTION: SETTLED FOR $10,500.00, TO BE PAID BY FA.