THE CLIENT IS ALLEGING THAT HIS INVESTMENT, OF $25,000, IN CORNING, INC. BONDS WAS NOT APPROPRIATE. THE CLIENT IS BASING THIS ON HIS READING OF THE BOND PROSPECTUS AND THE MINIMUM TRADING REQUIREMENT, AND IS REQUESTING A THAT THE SALE, FROM MARCH 2001, BE RESCINDED AND HIS PURCHASE PRICE BE REFUNDED.

$25,000.00

AFTER REVIEWING THIS MATTER WITH THE IR AND OUR FIXED INCOME DEPT, IT WAS FOUND THAT THE CORNING BOND IN QUESTION WAS INITIALLY ISSUED ON MARCH 8, 1993. THE CLIENTS' PURCHASE TOOK PLACE ON FEBRUARY 26, 2001. IT APPEARS THAT AT THE TIME OF PURCHASE, THESE BONDS WERE A/A2 RATED. THE CURRENT RATING OF THE BOND IS BA2. THE IR STATED THAT SHE DISCLOSED AT THE TIME OF PURCHASE THAT THESE BONDS WERE UNINSURED. THE RATING INFORMATION FOR THIS BOND APPEARS ON THE CLIENTS' MONTHLY STATEMENT. CONCERNING THE PROSPECTUS RESTRICTION MENTIONED BY THE CLIENT, MOST SALES RESTRICTIONS CONTAINED WITHIN THE PROSPECTUS REFER TO THE INITIAL OFFERING OF THE INVESTMENTS. THE IR STATED THAT AT ONE TIME SHE OFFERED TO SELL THIS BOND FOR THE CLIENT; HOWEVER, BECAUSE OF THE "HOLD" RATING THE CLIENT DECLINED TO COMPLETE THE TRANSACTION. THE BOND CAN BE TRADED ON ANY BUSINESS DAY, AT THE MARKET PRICE. THE IR DID NOT INDICATE THAT THE CLIENT WAS RESTRICTED BASED ON THE SIZE OF HIS HOLDING, WHICH IS $25,000. THE REVIEW OF THE PORTFOLIO ALSO INDICATED THAT THE CLIENT HAS CONSIDERABLE EXPERIENCE INVESTING IN BONDS, AND THAT THIS PURCHASE DID NOT APPEAR TO BE OUTSIDE THE INVESTMENT OBJECTIVES OF THE ACCOUNT. BASED ON THIS INFORMATION, THE FIRM DECLINED TO RESCIND THE SALE AND REFUND OF THE PURCHASE PRICE.