CLIENT STATES HE INSTRUCTED IR TO SELL THE INVESTMENTS IN HIS ACCOUNT IF THE ACCOUNT VALUE DROPPED TO $500,000. CLIENT ALLEGES IR USED "INTIMIDATION REPEATEDLY" AND AS A RESULT OF IR'S FAILURE TO FOLLOW HIS INSTRUCTIONS, CLIENT LOST APPROXIMATELY $209,000.

$209,000.00

ACCORDING TO IR, THE CLIENT DID INFORM IR HE DID NOT WANT THE VALUE OF HIS ACCOUNT TO FALL BELOW $500,000. IR INDICATED HE EXPLAINED TO CLIENT, ON MORE THAN ONE OCCASION, THAT THE FUNDS COULD BE MOVED TO CASH AND/OR MONEY MARKET TO PROTECT THE INVESTMENTS FROM MARKET FLUCTUATION. IR ALSO STATED HE INFORMED THE CLIENT HE RECOMMENDED MAINTAINING A PORTFOLIO OF DIVERSIFIED INVESTMENTS FOR THE LONG TERM. IT IS UNDERSTOOD IR EXPLAINED HE COULD NOT PLACE A STOP LOSS ORDER FOR A SPECIFIC VALUE OF $500,000, AND, IF THE CLIENT MADE THE DECISION TO SELL INVESTMENTS HELD IN THE ACCOUNT, CLIENT WOULD NEED TO PROVIDE SPECIFIC INSTRUCTIONS TO DO SO. IR FURTHER INDICATED THE CLIENT DID CONTACT HIM EXPRESSING CONCERN REGARDING MARKET CONDITIONS. IR ALSO STATED THE CLIENT QUESTIONED IF THERE WERE INVESTMENT OPTIONS AVAILABLE THAT WOULD RESULT IN LESS RISK EXPOSURE AND PROVIDE BETTER RETURNS THAN CASH AND/OR MONEY MARKET. IR ALSO APPARENTLY INFORMED THE CLIENT BONDS WOULD PROVIDE A BETTER RATE OF RETURN; HOWEVER, THE INVESTMENTS WOULD BE SUBJECT TO MARKET FLUCTUATION AND LOSSES COULD RESULT IF THE INVESTMENTS WERE NOT HELD UNTIL MATURITY BASED ON OUR REVIEW, IT IS OUR OPINION THE CLIENT DID NOT PROVIDE IR WITH FIRM INSTRUCTIONS TO LIQUIDATE THE INVESTMENTS HELD IN THE ACCOUNT. CLAIM DENIED.

THE CLIENT CLAIMS THE IR RECOMMENDED THAT HE EXCHANGE HIS GE CAPITAL ANNUITY PAYING 5.5% FOR A VARIABLE HARTFORD ANNUITY. THE EXCHANGE TOOK PLACE IN APRIL 2000. THE CLIENT CLAIMS THE HARTFORD ANNUITY WAS TOO AGGRESSIVE AND HE LOST $11,160 AT THE TIME HE LIQUIDATED THE ANNUITY.

$11,160.00

THE IR STATED THE CLIENT MET WITH HIM TO DISCUSS HIS GE ANNUITY ON MARCH 9, 2000. THE IR STATED HE RECOMMENDED A 1035 EXCHANGE TO HARTFORD LEADERS FOR MORE DIVERSIFICATION, POSSIBLE GROWTH TO OFFSET INFLATION, AND THE CHOICE OF SEVERAL MONEY MANAGERS WITHIN THE ANNUITY. THE IR STATED HE NEVER DISCUSSED A 14% RETURN ON THE ANNUITY AND DID NOT MENTION THE MARKET WOULD BE BACK TO PREVIOUS LEVELS WITH A YEAR. THE IR STATED HE DISCUSSED THE POSSIBILITY OF A DROP IN THE MARKET AND THE MARKET WILL NORMALLY DROP 1 OUT OF EVERY 4 YEARS. THE IR STATED THE CLIENT COULD TAKE 15% WITHDRAWAL OF THE ORIGINAL CONTRACT VALUE WITHOUT PENALTY. CLAIM DENIED.