CLIENT STATES SHE INVESTED WITH COVINGTON IN EARLY 2000. CLIENT FURTHER STATES AT THE TIME SHE MADE THE DECISION TO INVEST $5,000 IN AN AGGRESSIVE FUND AND THE REMAINDER IN GROWTH AND INCOME AND EMERGING GROWTH FUNDS. CLIENT INDICATES SHE RECEIVED INAPPROPRIATE ADVICE FROM THE COVINGTON. CLIENT FURTHER INDICATES SHE REALIZES THE FIRM IS NOT RESPONSIBLE FOR ALL OF HER LOSSES, BUT BELIEVES COVINGTON WAS RESPONSIBLE FOR INVESTING A CLIENT'S MONEY IN UNSUITABLE INVESTMENTS. UNREALIZED LOSSES EXCEED $5,000.00.

$5,000.00

COVINGTON STATES, WHEN THE ACCOUNT WAS ORIGINALLY ESTABLISHED, SHE EXPLAINED THE IMPORTANCE OF DIVERSIFICATION AND ALSO REVIEWED THE INVESTMENT PYRAMID (WHICH PROVIDES SUGGESTED PORTFOLIO ALLOCATIONS). SHE HAS INDICATED HER DISCUSSION WITH THE CLEINT INCLUDED INVESTMENTS WHICH WOUD COMPLIMENT HER EXISTING PORTFOLIO. SHE HAS FURTHER INDICATED SHE REVIEWED EACH OF THE FUNDS PURCHASED INCLUDING HISTORICAL PERFORMANCE AS WELL AS THE MORE AGGRESSIVE NATURE OF THE VAN KAMPEN EMERGING GROWTH FUND AND VAN KAMPEN TECHNOLOGY FUND. IN ADDITION, THE CLIENT RECEIVED PROSPECTUSES FOR EACH OF THE FUNDS. ACCORDING TO OUR RECORDS, FOUR DIFFERENT VAN KAMPEN FUNDS WERE PURCHASED IN 2/00. BASED ON OUR REVIEW, COVINGTON MADE HER SUGGESTIONS BASED ON DISCUSSIONS WITH THE CLEINT. AT THE TIME OF THE PURCHASES, THE CLIENT WOULD HAVE RECEIVED TRADE CONFIRMATIONS AND HAS ALSO RECEIVED CUSTOMER STATEMENTS. IT IS OUR OPINION THE PURCHASES WERE AUTHORIZED AND THE CLIENT WAS PROVIDED WITH INFORMATION REGARDING THE RISKS ASSOCIATED WITH THE PURCHASES. IN ADDITION, IT DOES NOT APPEAR THE INVESTMENTS WERE OUTSIDE THE SCOPE OF THE INVESTMENT OBJECTIVES OF THE ACCOUNT. CLAIM DENIED.