[OTHER CUSTOMER NAMED] ALLEGES THAT MY RECOMMENDATION, I RECOMMENDED THE LIQUIDATION OF [CUSTOMER'S] ENTIRE STOCK AND BOND INVESTMENT PORTFOLIO AND RECOMMENDED THAT PROCEEDS OF $234,000 BE INVESTED IN A NYLIAC FLEXIBLE PREMIUM DEFERRED VARIABLE ANNUITY. [OTHER CUSTOMER NAMED] CLAIMS THAT THE TRANSACTIONS ARE "CLEARLY INAPPROPRIATE TO [CUSTOMER'S] PERSONAL FINANCIAL SITUATION". [OTHER CUSTOMER NAMED] IS REQUESTING CANCELLATION OF THE VARIABLE ANNUITY AND A REFUND OF ALL PREMIUMS PAID. NO SPECIFIC AMOUNT OF DAMAGES WERE ALLEGED. MR. MCCALLUM STATES THAT "[CUSTOMER] AND [SPOUSE] HAVE BEEN CLIENTS OF MINE FOR NEARLY FOUR YEARS AND HAVE EXPRESSED SATISFACTION WITH THE FIVE TRANSACTIONS WE HAVE DONE. THEIR SON-IN-LAW [OTHER CUSTOMER NAMED] BECAME INVOLVED FOLLOWING THE LATEST TRANSACTION. [CUSTOMER] HAD DECIDED TO LIQUIDATE HIS INVESTMENTS AND TRANSFER THEM INTO A NYL VARIABLE ANNUITY BECAUSE OF THE GUARANTEED DEATH BENEFIT THAT THE ANNUITY PROVIDED WITH A STEP UP AFTER THREE YEARS, DIVERSIFICATION OF THEIR ASSETS WITH PROFESSIONAL MANAGEMENT, THE OPPORTUNITY FOR TAX-DEFERRED GROWTH PROVIDED BY THE ANNUITY, THE GREATER OF THE 10% SURRENDER CHARGE FREE WINDOW OR THE GAIN WINDOW, AND THE LIVING NEEDS BENEFITS RIDER. IN MY OPINION, THE LONG-TERM ADVANTAGES OF THIS TRANSACTION FOR [CUSTOMER] AND [SPOUSE] OUTWEIGHED THE SHORT-TERM DISADVANTAGES."

$234,000.00

$242,900.00

UPON REVIEW OF POLICY RECORDS AND DATA, THE COMPANY OFFERED TO RESCIND THE VARIABLE ANNUITY, WAIVING THE APPLICABLE SURRENDER CHARGES. THE OFFER WAS ACCEPTED BY THE CUSTOMER.