FROM 1/2001 TO 12/31/11 ATTORNEY FOR THE CLIENT MAKES SEVERAL ALLEGATIONS AGAINST THE FINANCIAL ADVISOR INCLUDING: THE FINANCIAL ADVISOR BREACHED HIS DUTIES AS A FINANCIAL ADVISOR AND HEIGHTENED DUTIES HE OWED TO THE CLIENT; THE FINANCIAL ADVISOR MADE UNSUITABLE RECOMMENDATIONS LIKE ESTABLISHING MARGIN ACCOUNTS AND INVESTING IN THE CLIENT'S DAUGHTER'S DRESS SHOP; THE FINANCIAL ADVISOR "SELF DEALT" IN ALLOWING THE CLIENT TO UTILIZE HIS MOTHER AS AN AGENT FOR THE SALE OF PROPERTY; THE FINANCIAL ADVISOR ALLOWED ANOTHER INDIVIDUAL TO ESTABLISH A SUBSTANTIAL LOAN AND MAKE HUNDREDS OF UNAUTHORIZED TRANSACTIONS IN THE CLIENT'S ACCOUNTS. ATTORNEY ALLEGES THE UNAUTHORIZED TRANSACTIONS WERE OFTEN COMPLETED BASED ON FRAUDULENT TRADING AUTHORIZATIONS OR WITHOUT ANY TRADING AUTHORIZATIONS AND THAT THE FINANCIAL ADVISOR FAILED TO MAKE THE CLIENT AWARE OF THE ACTIVITY IN HER ACCOUNTS. ATTORNEY CLAIMS $6,000,000.00 IN DAMAGES. LITIGATION: ALLEGATIONS AGAINST EDWARD JONES AND FINANCIAL ADVISOR GARY SCOTT INCLUDE BREACH OF FIDUCIARY DUTY, CONVERSION, NEGLIGENCE, BREACH OF ORAL CONTRACT, PROMISSORY ESTOPPEL, CONSPIRACY AND VICARIOUS LIABILITY REGARDING CO-DEFENDANT [THIRD PARTY'S] ALLEGED UNAUTHORIZED TRANSACTIONS, INCLUDING UNAUTHORIZED MARGIN ACTIVITY, IN PLAINTIFF [CUSTOMER'S] BROKERAGE ACCOUNTS. ARBITRATION: ALLEGATIONS AGAINST EDWARD JONES AND FINANCIAL ADVISOR GARY SCOTT INCLUDE BREACH OF FIDUCIARY DUTY, CONVERSION, NEGLIGENCE, BREACH OF ORAL CONTRACT, PROMISSORY ESTOPPEL, CONSPIRACY AND VICARIOUS LIABILITY REGARDING CO-DEFENDANT SANDY VITORELO'S ALLEGED UNAUTHORIZED TRANSACTIONS, INCLUDING UNAUTHORIZED MARGIN ACTIVITY, IN PLAINTIFF [CUSTOMER'S] BROKERAGE ACCOUNTS.

$6,000,000.00

$450,000.00

THE COMPLIANCE RESOLUTION DEPARTMENT WILL NOT BE RESPONDING TO THE ATTORNEY'S INQUIRY AS HE HAS CHOSEN TO PURSUE LITIGATION IN ORDER TO RESOLVE THIS MATTER. ALL FUTURE COMMUNICATION REGARDING THIS MATTER WILL BE DIRECTED BY THE FIRM'S LEGAL DEPARTMENT. CLAIM DENIED.