5/08; CLIENTS STATE THEY ADVISED THE FA TO SELL INVESTMENTS HELD IN THEIR ACCOUNT IN MAY 2008 AND THEIR INSTRUCTIONS WERE NOT FOLLOWED. IN ADDITION, CLIENTS STATE AN INVESTMENT WAS SOLD IN THE ACCOUNT WITHOUT THEIR PERMISSION. CLIENTS STATE THEY HAVE INCURRED LOSSES OF APPROXIMATELY $57,000.00 AND REQUEST THAT THEIR ACCOUNT(S) BE CREDITED FOR THE LOSSES.

$5,000.00

ACCORDING TO THE FA AS WELL AS THE BRANCH OFFICE RECORDS, HE DID HAVE A CONVERSATION WITH THE CLIENT IN MAY 2008 AFTER RECEIVING A LETTER DATED MAY 20, 2008. HE HAS INDICATED HE REVIEWED MARKET CONDITIONS WITH THE CLIENTS AS WELL AS THE FIRM'S RECOMMENDATIONS AND INVESTMENTS PHILOSOPHY. BASED ON THEIR DISCUSSIONS, THE DECISION WAS MADE TO CONTINUE HOLDING THE INVESTMENTS. THE FA HAS INDICATED HE WAS ON VACATION WHEN THE CLIENTS CONTACTED HIM IN JULY 2008. HOWEVER, HE DID SPEAK WITH THE CLIENTS LATE IN THE AFTERNOON ON JULY 10, 2008 DURING WHICH THEY DISCUSSED THE INVESTMENTS HELD IN THE ACCOUNTS. HE HAS INDICATED HE RECEIVED INSTRUCTIONS FROM THE CLIENTS TO EXCHANGE THE AMERICAN FUNDS HELD IN THE ACCOUNTS TO CASH MANAGEMENT TRUST OF AMERICA; HOWEVER, THERE WERE TO BE NO CHANGES TO THE OTHER INVESTMENTS HELD IN THE ACCOUNTS. THE FA HAS STATED HE EXPLAINED THE MARKET HAD CLOSED FOR THE DAY; THEREFORE, THE EXCHANGES WOULD BE COMPLETED ON THE FOLLOWING DAY - JULY 11, 2008. THE FA HAS INDICATED (AND THE BRANCH OFFICE RECORDS SUPPORT) THAT THE CLIENTS VISITED HIS OFFICE ON JULY 28, 2008 AT WHICH TIME THEY REVIEWED ALL OF THE ACCOUNTS AS WELL AS THE ORDERS THAT HAD BEEN PLACED. THE FA HAS INDICATED HE REVIEWED EACH CONFIRMATION WITH THE CLIENT. IN ADDITION, ACCORDING TO THE BRANCH RECORDS, THE FA SPOKE WITH THE CLIENT'S ON SEPTEMBER 12, 2008 AT WHICH TIME HE AGAIN REVIEWED THE TRANSACTIONS THAT WERE COMPLETED IN JULY AND ALSO DISCUSSED LEHMAN BROTHERS AND BANK OF AMERICA. AT THE TIME OF THE TRANSACTIONS (BUYS/SELLS) EFFECTED IN THE ACCOUNTS, YOU WOULD HAVE RECEIVED TRADE CONFIRMATIONS. IN ADDITION, YOU HAVE RECEIVED ACCOUNT STATEMENTS WHICH REFLECT ALL ACTIVITY IN THE ACCOUNT. IT IS OUR OPINION THE TRANSACTIONS EFFECTED IN THE ACCOUNT WERE COMPLETED WITH THE PROPER AUTHORIZATION. CLAIM DENIED.