CUSTOMERS ALLEGE THAT THEY REQUESTED A 2 YEAR MATURITY CD BUT THE REPRESENTATIVE INSTEAD SOLD THEM A 15 YEAR MATURITY CD. FIRM REFUNDED CUSTOMER'S ORIGINAL INVESTMENT OF $82,000.00 AT A LOSS (DUE TO CURRENT INTEREST RATES) TO THE FIRM OF $13,504.38.

$13,504.38

$82,000.00

FA HAD DETAILED NOTES AND DOCUMENTATION IN THE CLIENT'S FILE OF DISCUSSIONS DESCRIBING A 15-YEAR MATURITY CD THAT WOULD BE CALLABLE AFTER 2 YEARS. THE INTEREST RATE BEING OFFERED WAS MUCH MORE ATTRACTIVE THAN WHAT A TRADITIONAL 2-YEAR CD WAS OFFERING AT THE TIME. APPARENTLY, THE CLIENT CONFUSED THE 2-YEAR CALL FEATURE WITH A 2-YEAR MATURITY DATE. THE FA WAS NOT HELD RESPONSIBLE MONETARILY NOR WAS ANY PENALTY ASSESSED. REGIONS DECIDED ON THEIR OWN TO CLOSE OUT THE CLIENT'S POSITION AND PAY HIM THE AMOUNT HE WOULD HAVE GOTTEN WHEN THE CD WAS EITHER CALLED OR MATURED.

CD SOLD TO CUSTOMER ON 01/14/1999. CUSTOMER ALLEGES HE UNDERSTOOD HE WAS INVESTING IN A 1 YEAR CD WHEREIN HE HAD THE OPTION OF REINVESTING OR WITHDRAWING AFTER THE 1 YEAR TERM. THE CD SOLD WAS INSTEAD A 15 YEAR MATURITY.

$5,250.00