CUSTOMER ALLEGED UNSUITABLE INVESTMENT STRATEGY THAT CAUSED HER TO INCUR UNEXPECTED CAPITAL GAINS TAXES

$15,000.00

TWO MONTHS AFTER HER EMPLOYMENT WITH MY COMPANY HAD ENDED, A DISGRUNTLED FORMER ASSISTANT FILED A COMPLAINT WITH OUR BROKER DEALER TRIAD ADVISORS, INC. SHE CLAIMED THAT OUR INVESTMENT PROGRAM HAD BEEN UNSUITABLE FOR HER FINANCIAL SITUATION. WE RECOMMENDED SELLING A MAJORITY OF HER INVESTMENTS IN JUNE 2011 PRIOR TO THE MARKET COLLAPSE IN AUGUST 2011, TO AVOID THE MARKET LOSSES WE FORECASTED, AND TO INSTEAD REALIZE THE SUBSTANTIAL MARKET GAINS FROM THE BOTTOM IN MARCH 2009. ONCE THE INVESTMENTS WERE SOLD AHEAD OF THE MARKET COLLAPSE, THE CAPITAL GAINS IN HER ACCOUNTS WERE REALIZED, ALONG WITH CAPITAL GAIN TAX OWED. SHE WAS UNHAPPY WITH HAVING TO PAY TAX ON THOSE GAINS AND FELT SHE COULD NOT AFFORD THE TAX, ALTHOUGH IT IS COMMONPLACE FOR CLIENTS TO PAY THE TAX DUE OUT OF THE REALIZED GAINS, STILL LEAVING A SUBSTANTIAL NET UPSIDE. SHE FILED A COMPLAINT SEEKING REIMBURSEMENT FOR THE TAX SHE OWED ON THOSE REALIZED CAPITAL GAINS.