ARBITRATION CASE DESCRIPTION: ALLEGATIONS OF UNSUITABLE RECOMMENDATIONS AND MISREPRESENTATION IN ADVISING CLAIMANT TO INVEST $15,000 IN MUTUAL FUNDS. (AMOUNT CLAIMED: $3,071 PLUS LOST INTEREST AT 7 1/2% FOR TWO YEARS ON $15,000)

$5,000.00

$2,000.00

ARBITRATION RESOLUTION: SETTLED FOR $2,000

CLIENT STATES WHEN HE ORIGINALLY MET WITH THOMPSON IN 8/2000, HE INFORMED THOMPSON HE HAD NO PRIOR INVESTMENT EXPERIENCE AND HIS PRIORITY WAS PROTECTING PRINCIPAL. CLIENT STATES THOMPSON PERSUARED HIM TO PURCHASE MUTUAL FUNDS. IN AUGUST, 2000 THE CLIENT PURCHASED SHARES OF FUNDAMENTAL INVESTORS FUND, GROWTH FUND OF AMERICA AND INVESTMENT COMPANY OF AMERICA. CLIENT ALLEGES IN 1/2003 THOMPSON SUGGESTED EXCHANGING THE EXISTING MUTUAL FUNDS FOR MORE CONSERVATIVE FUNDS, BUT THE CLIENT DID NOT MAKE ANY CHANGES MAKING THE DETERMINATION DISPUTE RESOLUTION WAS HIS ONLY RECOURSE. CLIENT REQUESTS A REIMBURSEMENT OF PRINCIPAL INVESTED AS WELL AS INTEREST AT THE RATE OF 7.5% FOR TWO YEARS. CLAIM EXCEED $5,000.00. ******************* ARBITRATION CASE DESCRIPTION: ALLEGATIONS OF UNSUITABLE RECOMMENDATIONS AND MISREPRESENTATION IN ADVISING CLAIMANT TO INVEST IN MUTUAL FUNDS. (AMOUNT CLAIMED: $8,057 ACTUAL DAMAGES, $1,000 PUNITIVE DAMAGES AND $3,750 IN INTEREST)

$5,000.00

$4,350.00

ACCORDING TO OUR RECORDS, ON AUGUST 14, 2000, SHARES OF FUNDAMENTAL INVESTORS FUND, GROWTH FUND OF AMERICA AND INVESTMENT COMPANY OF AMERICA WERE PURCHASED IN THE CLIENT'S ACCOUNT. THE IR INDICATED THAT AT THE TIME OF PURCHASE HE EXPLAINED ALL ASPECTS OF A MUTUAL FUND, INCLUDING THE RISKS ASSOCIATED WITH MARKET FLUCTUATION. THE IR RECALLED THAT THE FUNDS BEING INVESTED BY THE CLIENT WERE NOT REQUIRED TO MEET IMMEDIATE NEEDS AND THE CLIENT'S INVESTMENT HORIZON WAS LONG-TERM. AT THE TIME OF THE PURCHASES, THE CLIENT WOULD HAVE RECEIVED TRADE CONFIRMATIONS AS WELL AS THE APPROPRIATE PROSPECTUS. SINCE THE PURCHASES, THE CLIENT WOULD HAVE RECEIVED STATEMENTS, WHICH PROVIDE INFORMATION REGARDING THE INVESTMENTS HELD IN THE ACCOUNT (INCLUDING ASSET CATEGORY) AS WELL AS REFLECTING ACCOUNT ACTIVITY. BASED ON OUR REVIEW, THE IR MADE HIS SUGGESTIONS BASED ON DISCUSSIONS WITH THE CLIENT AND THE PURCHASES WERE MADE WITH THE CLIENT'S AUTHORIZATION. OUR RECORDS INDICATE THE INVESTMENT OBJECTIVES OF THE ACCOUNT ARE GROWTH, GROWTH AND INCOME, AND AGGRESSIVE GROWTH. WHEN THE ACCOUNT WAS ESTABLISHED, A VERIFICATION LETTER CONFIRMING THESE OBJECTIVES (AS WELL AS OTHER ACCOUNT INFORMATION) WOULD HAVE BEEN SENT TO THE CLIENT. IT IS OUR OPINION THE INVESTMENTS PURCHASED IN THE ACCOUNT WERE NOT OUTSIDE THE SCOPE OF THE INVESTMENT OBJECTIVES. CLAIM DENIED.********************************** ARBITRATION RESOLUTION: SETTLED FOR $4,350