COMPLAINT ABOUT AUCTION RATE SECURITIES THAT ALLEGED MISREPRESENTATION. DAMAGES UNSPECIFIED.

$875,000.00

THIS MATTER INVOLVES THE SALE OF AUCTION RATE SECURITIES (ARS). THE TRANSACTION(S) AT ISSUE TOOK PLACE BEFORE MID-FEBRUARY 2008, WHEN THE ARS MARKET SUFFERED WIDESPREAD AUCTION FAILURES AND ILLIQUIDITY. THE FINANCIAL ADVISOR DID NOT CAUSE, CONTRIBUTE OR HAVE ANY CONTROL WHATSOEVER OVER THESE MARKET EVENTS. THE FIRM REACHED AGREEMENT WITH CERTAIN OF ITS REGULATORS, PURSUANT TO WHICH IT REPURCHASED ARS FOR THEIR FULL PAR VALUE FROM CERTAIN CLIENTS, INCLUDING THE INSTANT CLIENT, WHETHER THEY COMPLAINED OR NOT. THE FINANCIAL ADVISOR WAS NOT A PARTY TO THAT AGREEMENT, DID NOT MAKE ANY PAYMENT TO THE CLIENT, AND WAS NOT ASKED TO AND DID NOT CONTRIBUTE TO THE REPURCHASE AMOUNT. THE SETTLEMENT AMOUNT IN ITEM 11 ABOVE REFLECTS THE PAR VALUE OF THE REPURCHASED ARS, AS REQUIRED BY FINRA REGULATORY NOTICE 09-12. CLIENT WAS RANDOMLY ASSIGNED TO THE FINANCIAL ADVISOR AFTER HIS FORMER FINANCIAL ADVISOR LEFT THE FIRM. THE AUCTION RATE SECURITY POSITIONS WERE IN THE CLIENTS ACCOUNT PRIOR TO BEING RANDOMLY ASSIGNED TO THE FINANCIAL ADVISOR. THE CLIENT HAD ONLY AUCTION RATE SECURITIES IN HIS ACCOUNT AND CONTINUED TO CALL TO SEE WHAT WAS AVAILABLE. THE CLIENT PRESENTED HIMSELF AS A VERY SOPHISTICATED INVESTOR AND WAS NOT INTERESTED IN ANY RECOMMENDATIONS. FINANCIAL ADVISOR'S ONLY FUNCTION FOR THIS CLIENT WAS TO LET HIM KNOW WHAT AUCTION RATE SECURITIES WERE AVAILABLE, FINANCIAL ADVISOR DID NOT SOLICIT THE PURCHASES. THE CLIENT SUFFERED NO LOSSES. THE FINANCIAL ADVISOR AND HIS TEAM MADE MANY ATTEMPTS TO MEET WITH THE CLIENT TO LEARN HIS OBJECTIVES AND GOALS, WHICH THE CLIENT WAS NOT INTERESTED. PRIOR TO THE AUCTION FAILURES AND ILLIQUIDITY, THE FINANCIAL ADVISOR REQUESTED TO LOCAL MANAGEMENT THAT THE ACCOUNT BE REASSIGNED AS THE CLIENT HAD NO INTEREST IN DEVELOPING A RELATIONSHIP WITH THE FINANCIAL ADVISOR AND HIS WEALTH MANAGEMENT TEAM.