AUGUST 2010 THE CLIENT, [CUSTOMER] ALLEGED THAT I TOOK THE LIBERTY OF "MISREPRESENTING" HIS INVESTMENT OBJECTIVES AND GENERAL INVESTING KNOWLEDGE ON THE APPLICATION AND THAT THE INVESTMENT OF $100,000.00 IN THE PUTNAM CA TAX FREE BOND FUND CL-A WAS UNSUITABLE. I COMPLETED THE APPLICATION FOR THE CLIENT BASED ON HIS VERBAL STATEMENT WITH THE FINANCIAL INFORMATION HE PROVIDED IN THREE SEPARATE MEETINGS PRIOR TO INVESTMENT IN THE AFOREMENTIONED MUTUAL FUND. ALL OF THE DOCUMENTS WERE SIGNED AND INITIALED BY HIM PRIOR TO INVESTING IN ORDER TO CONFIRM ALL OF THE INFORMATION SUBMITTED WAS CORRECT AND TRUE AND ACCURATE. ON 08/18/2010, UNIONBANC INVESTMENT SERVICES SENT HIM A LETTER THAT REFLECTS THE THE SUITABILITY INFORMATION CONTAINED ON THE APPLICATION IMMEDIATELY AFTER THEIR NEW ACCOUNT HAS BEEN OPENED. THE LETTER CLEARLY REFLECTED HIS SUITABILITY INFORMATION THAT HE SIGNED AND INITIALED ON 08/13/2010. ADDITIONALLY, THE LETTER INCLUDES INSTRUCTION FOR THE CLIENT TO CONTACT HIS REGISTERED REP OR UNIONBANC INVESTMENT SERVICES TO CHANGE OR UPDATE ANY OF THE SUITABILITY INFORMATION IF IT WAS INCORRECT OR INACCURATE. THE CLIENT MADE NO SUCH EFFORT TO MAKE AMENDMENTS OR CHANGES AT ANY TIME ON RECORD. DURING THE FIRST MEETING I COLLECTED PERSONAL, FINANCIAL AND SUITABILITY INFORMATION ABOUT [CUSTOMER]. AT THE SECOND MEETING, I HAD THREE DISTINCTLY DIFFERENT PROPOSALS FOR HIM TO CONSIDER BASED NOT HE INFORMATION HE PROVIDED TO ME AND THEY WERE AS FOLLOWS: A MARKET LINKED CD OFFERED THROUGH UNION BANK WHICH WAS FDIC INSURED. THE PUTNAM CA TAX FREE BOND FUND CL A SHARE THE JACKSON NATIONAL LIFE VARIABLE ANNUITY WITH A LIVING BENEFIT RIDER ATTACHED KNOWN AS THE "LIFEGUARD FREEDOM 6" HE REJECTED THE MARKET LINKED CD (FDIC) BECAUSE OF THE LACK OF LIQUIDITY AND LACK OF INCOME ASSOCIATED WITH IT. HE WAS INTERESTED IN THE TAX FREE BOND FUND BECAUSE HE WAS INTERESTED IN THE INCOME IT GENERATED MONTHLY AT THAT TIME NEARLY 4.25 PERCENT, WAS LIQUID AND TAX FREE. THE CLIENT ALSO EXPRESSED INTEREST IN ANNUITIES IN GENERAL AND HAD RECENTLY GONE TO SEMINARS REGARDING INDEX ANNUITIES. WE DISCUSSED BOTH VARIABLE ANNUITIES AND INDEX (AT HIS REQUEST) WHICH INCLUDED LIVING BENEFIT RIDERS, DEATH BENEFIT PROVISIONS, EXPENSES, SURRENDER CHARGES AND M&E EXPENSES ASSOCIATED WITH VA'S. AFTER THE SECOND MEETING THE CLIENT STATED HE WOULD REVIEW THE INFORMATION DISCUSSED AND PERFORM HIS DUE DILIGENCE BIT EXCLUDING MEETING WITH OTHER ADVISORS AND ADDITIONAL SEMINARS. THE CLIENT EVENTUALLY CONTACTED ME TO SET UP THE THIRD MEETING ON AUGUST 13, 2010. WE AGAIN REVIEWED ALL PREVIOUS PROPOSALS AND THE CLIENT DECIDED TO INVEST THE MONEY IN THE PUTNAM CA TAX FREE FUND. WE DISCUSSED SPLITTING THE INVESTMENT INTO TWO SEPARATE STRATEGIES BUT THE CLIENT WANTED THE BREAK POINT DISCOUNT OFFERED BY PUTNAM FOR THE A-SHARES. HE EVENTUALLY INVESTED THE ENTIRE $100,000 IN THE MUTUAL FUND AND STATED THAT HE WOULD ADD ADDITIONAL MONIES INTO A VARIABLE ANNUITY AT A LATER DATE. THE CONVERSATION CONTINUALLY RETURNED TO HIS DESIRE FOR INCOME AND LIQUIDITY

$10,000.00

COMPLAINT ALLEGED MISREPRESENTATION IN CONNECTION WITH A VARIABLE UNIVERSAL LIFE INSURANCE POLICY ISSUED ON APRIL 28, 2005.

$40,387.73

COMPLAINT ALLEGED MISREPRESENTATION IN CONNECTION WITH A VARIABLE UNIVERSAL LIFE INSURANCE POLICY ISSUED ON MAY 10, 2005.

$40,387.73