CLIENT ALLEGES SUITABILITY RELATING TO VARIABLE ANNUITY INVESTMENT. ACTIVITY DATES 03/21/05-07/09/06.

$36,407.41

CLIENT ALLEGES MISREPRESENTATION RELATING TO A VARIABLE ANNUITY INVESTMENT.

$24,196.84

I HAVE EXPLAINED THE PRODUCT ENTIRELY TO [CUSTOMER]. I NEVER MISREPRESENTED ANYTHING TO HIM. I FOLLOWED THE CISC'S PRESENTATION AND DISCLOSURE PROCESS TO THE T. I DISCLOSED ALL OF THE FOLLOWING: THIS VA INVESTMENT IS NOT VERY LIQUID, THAT HE HAS TO HOLD IT FOR A MINIMUM OF 7 YEARS, OTHERWISE, HE WOULD HAVE TO PAY HIGH PENALTY. HE SAID HE DID NOT NEED THIS MONEY UNTIL RETIREMENT. I DISCLOSED TO HIM THE 7-YEARS SURRENDER SCHEDULE. HE SIGNED DOCUMENTS INDICATING THAT DISCLOSURE. I TOLD HIM THAT HE HAS A PRINCIPAL GUARANTEE ON HIS MONEY, THAT IN 5 YEARS NATIONWIDE WILL RETURN HIS FULL PRINCIPAL IF HIS ACCOUNT VALUE IS LESS ON THE 6TH (AFTER 5 YEARS) ANNIVERSARY. I TOLD HIM THAT THE GUARANTEE IS BY NATIONWIDE AND WILL DEPEND ON THEIR ABILITY TO PAY THEIR CLAIMS. HE TOLD ME THAT HE DEALT WITH NATIONWIDE ON THE HOME INSURANCE SIDE AND THAT THEY WERE TOUGH TO DEAL WITH AND THAT HE DID NOT LIKE THEM BECAUSE THEY QUESTIONS EVERY CLAIM. HOWEVER, HE STILL WANTED TO GET INTO THIS INVESTMENT I TRIED TO TELL HIM NOT INVEST THE ENTIRE $97,000. I TOLD HIM TO INVEST ONLY $70K TO $75K AND LEAVE SOME MONEY IN CASH. BUT HE INSISTED ON INVESTING THE WHOLE AMOUNT AND SAID THAT HE DOES NOT NEED IT FOR A LONG TIME AND THAT HE HAS OTHER MONIES THAT HE CAN USE. I EXPLAINED THAT THE MONEY WILL BE INVESTED IN THE MARKET. THAT IT WILL GO UP AND DOWN, THE THAT THERE IS NO FIXED RATE OF RETURN THAT HE IS GUARANTEED IN ANY ONE YEAR. I EXPLAINED THE DIFFERENCE BETWEEN VA AND FIXED ANNUITIES. I TOLD HIM THAT THIS IS NOT A CD, THAT IT DOES NOT PAY FIXED RATE AND THAT WHAT HE EARNS WILL VARY FROM ONE YEAR TO THE NEXT. HE KNEW VERY WELL THAT THERE IS NOT PROMISED FIXED RETURN GIVEN FOR THIS INVESTMENT. IN A LATER CONVERSATION HE TOLD ME THAT HE KNOWS ALL OF WHAT I MENTIONED ABOVE BUT HE WANTS TO FIND A WAY TO GET OUT, AND HE THOUGHT THAT IF HE COMPLAINS TO NATIONWIDE, THAT THEY MAY LET HIM GET OUT OF THIS INVESTMENT.