CLIENT ALLEGED, INTER ALIA, THAT THEIR ACCOUNT WAS NOT MANAGED IN THEIR BEST INTEREST 2013 - 2022 DAMAGES UNSPECIFIED

Claimant alleged that Respondents mismanaged his discretionary account by investing in unsuitable securities that underperformed the S&P 500

$250,000.00

$75,000.00

Respondents deny Claimant's allegations in the claim and contend that Claimant's account was appropriately managed. Morgan Stanley settled the claim to avoid the costs and uncertainty of litigation. Mr. Phillips was not asked to contribute to the settlement.

THE COMPLAINT AROSE OUT OF THE SALE OF AN AUCTION RATE SECURITY (ARS) THAT WAS MADE PRIOR TO THE WIDESPREAD ILLIQUIDITY IN THE ARS MARKET THAT OCCURRED IN FEBRUARY 2008.

$575,000.00

THE COMPLAINT AROSE IN CONNECTION WITH THE INDUSTRY WIDE BREAKDOWN OF LIQUIDITY IN THE MARKET FOR AUCTION RATE SECURITIES ("ARS"). THE FIRM AGREED TO REPURCHASE THE ARS SECURITIES AT ISSUE AT PAR VALUE FROM THE CLIENT PURSUANT TO A GLOBAL REPURCHASE AGREEMENT IT ENTERED INTO WITH SEVERAL REGULATORY BODIES. THIS WAS NOT A SETTLEMENT OF A DISPUTE BETWEEN THE CLIENT AND THE REPRESENTATIVE AND WAS NOT BASED ON THE MERITS OF THE CLIENT'S SPECIFIC CONCERNS OR ANY FINDING OF FAULT OR WRONGDOING BY THE NAMED REPRESENTATIVE. THE NAMED REPRESENTATIVE WAS NOT A PARTY TO, AND DID NOT AGREE TO OR PARTICIPATE IN, THE REPURCHASE AGREEMENT BETWEEN THE FIRM AND THE RELEVANT REGULATORY BODIES. THE NAMED REPRESENTATIVE DID NOT MAKE ANY PAYMENTS TO THE CLIENT AND THE NAMED REPRESENTATIVE WAS NOT ASKED TO AND DID NOT CONTRIBUTE TO THE SETTLEMENT AMOUNT. THE LISTED "SETTLEMENT AMOUNT" REPRESENTS ONLY THE GROSS INITIAL PAR VALUE OF THE ARS POSITION AND DOES NOT TAKE INTO ACCOUNT THE ACTUAL VALUE OF THE ARS POSITION AT THE TIME THE FIRM RECEIVED IT BACK FROM THE CLIENT IN CONNECTION WITH THE SETTLEMENT. THIS MATTER IS BEING REPORTED AS A SETTLEMENT PURSUANT TO THE REQUIREMENTS OF FINRA REGULATORY NOTICE 09-12.

THE CLIENTS ALLEGED UNSUITABILITY OF INVESTMENTS - 2000.

$13,400.00

$13,400.00

THE CLAIM WAS SETTLED FOR $13,400.

THE CLIENT ALLEGED FAILURE TO FOLLOW INSTRUCTIONS WITH REGARD TO RISK TOLERANCE OF INVESTMENTS IN MANAGED ACCOUNT. 4/1/00 TO 5/30/02.

$50,000.00

THE CLAIM WAS DENIED

THE CLIENTS' ATTORNEY ALLEGED THAT THE BROKER FAILED TO FOLLOW INSTRUCTIONS TO SET ASIDE MONEY FOR TAXES, AND ALSO ALLEGED THAT THE CLIENTS' MONEY WAS INVESTED IN STOCKS WHICH WERE CONTRARY TO THE ALLOCATION THEY DISCUSSED. JANUARY, 2000 - APRIL, 2001

$44,000.00

THE CLIENT'S CLAIM WAS DENIED.