REP TOLD HUSBAND'S MOTHER THAT SHE WAS TOO OLD TO HAVE A VARIABLE ANNUITY. THE FIRM HAS MADE A GOOD FAITH DETERMINATION THAT THE COMPENSATORY DAMAGES ARE OVER $5,000.

ON 5/9/06 CLIENT CAME INTO MY OFFICE WITH HIS MOTHER TO DISCUSS OPTIONS FOR HER MONEY TO PROTECT IT FROM NURSING HOME EXPENSES. I TOLD THEM I COULD NOT ADVISE THEM ON ANYTHING ILLEGAL BUT COULD EXPLAIN SINGLE PREMIUM LIFE INSURANCE OR A LONG-TERM CD WHICH INCLUDES A DEATH PUT. CLIENT SAID SHE COULD DO WHAT SHE WANTED WITH HER MONEY AND WANTED TO GIVE IT TO HER SON. HER SON REQUESTED A PRODUCT THAT WOULD DEFER TAXES AND PROVIDE AN OPPORTUNITY FOR GROWTH AND RETIREMENT INCOME. I INTRODUCED AN ANNUITY PRODUCT. I EXPLAINED THE PRODUCT, ITS COSTS, FEATURES, RISKS AND THE SUBSTANTIAL PENALTIES FOR EARLY WITHDRAWAL. HE SIGNED A STATEMENT THAT DISCLOSED THE COSTS AND EARLY WITHDRAWAL PENALTIES ASSOCIATED WITH THE PRODUCT. OVER THE NEXT 7 MONTHS CLIENT AND I HAD SEVERAL CONVERSATIONS TO REVIEW THE STATEMENT, PERFORMANCE, DEATH BENEFITS, SURRENDER PERIOD AND BENEFICIARY. ON FEBRUARY 7, 2007 THE CLIENT REQUESTED THAT HIS SPOUSE BE ADDED AS AN OWNER ON THIS POLICY AND THEY BOTH SIGNED THE NECESSARY DOCUMENT TO FACILITATE THAT CHANGE. ON JANUARY 14, 2007 HE WANTED TO BUY ANOTHER ANNUITY LIKE THE ONE HE ALREADY OWNED. I SUGGESTED MAKING AN ADDITIONAL DEPOSIT INTO HIS EXISTING POLICY, BUT HE DECLINED. HE AND HIS SPOUSE CAME IN ON JANUARY 15, 2007 AND THE PRODUCT WAS AGAIN THOROUGHLY EXPLAINED AND THEY CHOOSE TO SIGN THE NECESSARY DOCUMENTS INSTRUCTING US TO PUT THE POLICY IN PLACE. THIS WAS THE FIRST TIME I HAD MET WITH THE CLIENT'S SPOUSE AND HAD A CONVERSATION WITH HER. BETWEEN 1/20/07 AND 2/1/08 CLIENT/CLIENT'S SPOUSE CHOOSE TO MAKE WITHDRAWALS FROM THE ANNUITIES EVEN AFTER THEY WERE ADVISED AGAINST DOING SO BECAUSE OF THE PENALTIES.

MISMANAGEMENT OF PORTFOLIO, UNAUTHORIZED TRADING, POOR PERFORMANCE, AND MISREPRESENTATION. ACTIVITY DATES, FEBRUARY 23, 2000 TO APRIL 3, 2005.

$50,000.00

ON MARCH 7, 2000, I DEVELOPED AN AGGRESSIVE GROWTH PORTFOLIO STRATEGY WITH THE CLIENTS BASED ON THEIR FINANCIAL GOALS AND RISK TOLERANCE. I EXPLAINED THE RISKS AND VOLATILITY ASSOCIATED WITH THIS STRATEGY. BETWEEN 2000 AND 2005, I CONTACTED THE CLIENTS BETWEEN 10-13 TIMES TO ADVISE THEM TO REDUCE THEIR RISK EXPOSURE, BUT THEY DECLINED. AS A FINANCIAL CONSULTANT, I FOLLOW A REGIMENTED CLIENT CONTACT STRATEGY. I MONITOR THEIR BIRTHDAYS, IMPORTANT LIFE CHANGES, AND ROUTINELY MEET WITH THEM TO ASSURE THEIR PORTFOLIOS REFLECT THEIR CURRENT STATUS. THE CLIENTS ALSO RECEIVE MONTHLY STATEMENTS REFLECTING THE VALUES OF THEIR ACCOUNT COMPARED TO LAST MONTH. TO THE [CUSTOMER'S], I CAREFULLY MADE MY RECOMMENDATIONS AFTER GOING OVER ALL OPTIONS AND RECEIVING BOTH THEIR ORAL AND WRITTEN ACKNOWLEDGMENT THAT THE ULTIMATE INVESTMENTS WERE THEIR PERSONAL CHOICES. IN ADDITION, THE CLIENTS SIGNED WELLS CHOICE PRODUCT DOCUMENTATION, THE SIGNATURE PAGE OF THE WELLS CHOICE PRODUCT CLEARLY CONTAINS THE FEE STRUCTURE AND REQUIRES THE CLIENTS TO READ, UNDERSTAND, AGREE, AND SIGN THE FORM. IN NOVEMBER 2004, THEY KNOWINGLY, PURPOSEFULLY, AND INTENTIONALLY INSTRUCTED ME TO SELL THE INVESTMENTS IN THE PORTFOLIOS TO MOVE TO A DIFFERENT PRODUCT. ON MANY OCCASIONS, THE CLIENTS TOLD ME THEY DON'T ENJOY DISCUSSING FINANCES, ADMITTED THEY CHOSE NOT TO OPEN THEIR STATEMENTS ALTHOUGH THEY RECEIVED THEM, AND ROUTINELY DECLINED TO FOLLOW MY ADVICE. IN DECEMBER 2004, I SPOKE WITH [CUSTOMER], WHO COMPLAINED THAT THEIR PORTFOLIOS WERE SIGNIFICANTLY DOWN AND THAT WAS NOT ACCEPTABLE. HE REPEATEDLY ADMITTED THAT THEY NEVER LOOKED AT THEIR STATEMENTS AND CLAIMED TO RELY ON ME FOR ALL MONEY MANAGEMENT DECISIONS, DESPITE REFUSAL TO FOLLOW MY ADVICE.