[CUSTOMER] COMPLAINED TO PRIOR BROKER/DEALER AFTER VALUE OF HIS MUTUAL FUNDS DECLINED, ALLEGING THAT HE DID NOT UNDERSTAND RISKS ASSOCIATED WITH MUTUAL FUND INVESTMENTS. CUSTOMER HAD PRIOR INVESTMENT EXPERIENCE IN STOCKS AND BONDS, AND BEFORE HE INVESTED, I HAD FULL AND COMPLETE CONVERSATIONS WITH CUSTOMER ABOUT ASSOCIATED RISKS OF MUTUAL FUND INVESTMENTS, INCLUDING MARKET FLUCTUATION AND POSSIBLE LOSS OF PRINCIPAL. I ALSO PROVIDED CUSTOMER WITH PROSPECTUS FOR EACH FUND BEFORE HE INVESTED. BROKER/DEALER RESOLVED COMPLAINT WITH CUSTOMER MONETARILY, WITHOUT FIRST INFORMING ME THAT THERE HAD BEEN A WRITTEN COMPLAINT, WITHOUT REQUESTING ANY INFORMATION OR RESPONSE FROM ME, AND WITHOUT FULLY INVESTIGATING THE CUSTOMER'S ALLEGATIONS. NASD ALSO INQUIRED INTO THIS MATTER, AND CLOSED ITS INQUIRY WITH NO ACTION TAKEN AFTER FINDING THAT NO SALES PRACTICE VIOLATION HAD OCCURRED. [CUSTOMER] HAD PURCHASED THE MUTUAL FUNDS IN MID TO LATE 1999 WITH ME AS HIS REPRESENTATIVE IN GLENDALE, CA. IN DECEMBER OF 1999, I ACCEPTED A TRANSFER TO THE NORTHERN CALIFORNIA OFFICES OF CAL FED INVESTMENTS. FROM JANUARY OF 2000 TO APRIL OF 2001, ANOTHER REPRESENTATIVE HANDLED [CUSTOMER] ACCOUNT. YET, CAL FED INVESTMENTS ERRONEOUSLY MARKED MY U-5 FOR 100% OF THE CUSTOMER ACCOMMODATION SETTLEMENT OF $34,000.00 WHICH REPRESENTS THE MARKET FLUCTUATION OF HIS ACCOUNT UP UNTIL THE DATE HIS ACCOUNT WAS LIQUIDATED IN APRIL 2001 WHEN I ONLY ADVISED HIM ON HIS ACCOUNT FOR LESS THAN 6 MONTHS IN 1999.

$34,000.00

$34,000.00