4/1/07-10/25/08; CLIENT CLAIMS APPROXIMATELY 18 MONTHS AGO, HE CONCLUDED THE ECONOMY WAS IN DEEP TROUBLE AND HE EXPRESSED HIS BELIEFS TO THE FA. CLIENT STATES THE FA DOUBTED HIS CONCLUSION AND HE RECOMMENDED TO CONTINUE TO BUY MUTUAL FUNDS AND RIDE THE MARKET DOWN. CLIENT CLAIMS HE INFORMED THE FA THAT CDS WERE THE SAFEST PLACE FOR HIM TO BE AND THE FA DID NOT LIKE THE FACT THAT THE CLIENT WAS ONLY INTERESTED IN CDS AND MONEY MARKETS AT THAT TIME. CLIENT STATES THE FA FIRED HIM AS A CLIENT AS A RESULT OF THIS MATTER AND HE FINDS IT INTERESTING THAT THE FA WILL ACCEPT ADMINISTRATIVE FEES BUT WILL NOT EXECUTE ANY FURTHER INVESTMENTS FOR HIM. LOSSES WITHIN THE LAST 18 MONTHS EXCEED $5,000.

$5,000.00

ACCORDING TO FA, CLIENT HAD OVER $53,000.00 HELD IN MONEY MARKET IN AUGUST 2007. FA STATED HE MADE TWO RECOMMENDATIONS FOR THIS MONEY; DOLLAR COST AVERAGE INTO AMERICAN FUNDS OR INVESTING IN A BOND AND REINVESTING THE INTEREST FROM THE BOND INTO MUTUAL FUNDS. IT IS MY UNDERSTANDING THE FA DISCUSSED INVESTING BASED ON PRINCIPLES AND NOT PREDICTIONS AND THAT THE CLIENT SHOULD OWN QUALITY INVESTMENTS AND HOLD FOR THE LONG TERM. FA INDICATED AFTER THIS DISCUSSION, CLIENT AGREED TO START THE MONTHLY DCA INTO AMERICAN FUNDS. IN REGARD TO CLIENT'S CONCERNS THAT THE FA WAS ONLY INTERESTED IN SELLING HIM MUTUAL FUNDS, THE CLIENT'S ACCOUNT REFLECTS CERTIFICATE OF DEPOSITS WERE PURCHASED SHORTLY BEFORE AND AFTER THIS DISCUSSION TOOK PLACE. WHILE WE UNDERSTAND CLIENT'S DISAPPOINTMENT REGARDING THE PERFORMANCE OF HIS ACCOUNT, WE HAVE BEEN EXPERIENCING TUMULTUOUS MARKET CONDITIONS AND FLUCTUATION IS A RISK ASSOCIATED WITH OWNING ANY INVESTMENT. AS A RESULT OF OUR REVIEW, WE MUST RESPECTFULLY DENY ANY REQUEST FOR REIMBURSEMENT OF MARKET LOSSES ASSOCIATED WITH THE INVESTMENTS HELD IN THE CLIENT'S ACCOUNT.