CLIENT, VIA ATTORNEY, ALLEGED I MISREPRESENTED STRATEGY OF INVESTING IN 3 MONTH FUTURES CONTRACTS ON THE 30 YEAR TREASURY BOND IN ORDER TO OFFSET THE MARKET FLUCUTATION IN CLIENT'S DEFINED BENEFIT PLAN WHOSE VALUE IS DERIVED, IN PART, FROM THE AVERAGE OF THE 30 YEAR TREASURY BOND RATES IN EFFECT OVER A PERIOD OF TIME. CLIENT ALLEGED I ASSISTED HIM IN OPENING AN ACCOUNT UNDER [CUSTOMER] NAME AT [THIRD PARTY] TO IMPLEMENT THE STRATEGY.

$93,000.00

THIS ALLEGATION IS FALSE. THESE INDIVIDUALS WERE WELL AWARE OF THE RISKS INVOLVED IN SPECULATING IN TREASURY FUTURES CONTRACTS. THE INVESTMENT WAS MADE AS A HEDGE AGAINST INTEREST RATE RISK ASSOCIATED WITH THEIR DEFINED BENEFIT PENSION. THE HEDGE WORKED EXACTLY AS THEY WERE TOLD IT WOULD. THEY MADE MONEY IN THEIR PENSION, SO THEY LOST MONEY IN THE FUTURES. IF INTEREST RATES HAD GONE UP, THEY WOULD HAVE PROFITED IN THE FUTURES AND LOST IN THEIR PENSION, AND THIS COMPLAINT WOULD NEVER HAVE OCCURRED. FINALLY, THESE PEOPLE ARE NOT EVEN PIPER JAFFRAY CLIENTS; THEY WORKED THROUGH OUR REFERRAL TO THE FUTURES TRADERS AT [THIRD PARTY].