01/2008-04/2009; CLIENT STATES BECAUSE OF "SORRY" ADVICE RECEIVED FROM THE FA, SHE HAS LOST MONEY IN HER ACCOUNTS. CLIENT STATES, AS THE VALUE OF THE ACCOUNT DECLINED, THE FA DID NOT MENTION A FIXED ACCOUNT OR OTHER OPTIONS. CLIENT STATES THE VALUE OF HER ANNUITY DECLINED APPROXIMATELY $48,000.00 IN 2008 AND THAT THE VALUE OF HER ACCOUNT ONE YEAR AGO WAS $832,000.00. ALLEGED DAMAGES EXCEED $5,000.00 - FILING REQUIRED.

$5,000.00

ACCORDING TO OUR RECORDS, THE ACCOUNT WAS ESTABLISHED IN SEPTEMBER 1998. ACCORDING TO THE FA, UNTIL RECENTLY, THE CLIENT HAS SEEMED TO BE VERY COMFORTABLE WITH THE PORTFOLIO ALLOCATION. HE HAS INDICATED THE CLIENT ENJOYS OWNING INDIVIDUAL STOCKS AND SHE SELECTED MANY OF THE STOCKS THAT WERE PURCHASED IN THE ACCOUNT. SINCE THE ACCOUNT WAS ESTABLISHED, THE CLIENT HAS RECEIVED STATEMENTS PROVIDING INFORMATION REGARDING THE INVESTMENTS HELD IN THE ACCOUNT AS WELL AS REFLECTING ALL ACCOUNT ACTIVITY. WE CERTAINLY UNDERSTAND THE CLIENT'S CONCERNS RELATED TO THE DECLINE IN THE VALUE OF THE ACCOUNT; HOWEVER, MARKET FLUCTUATION IS A RISK ASSOCIATED WITH INVESTING. UNFORTUNATELY, WE HAVE BEEN EXPERIENCING UNPRECEDENTED, TUMULTUOUS MARKET CONDITIONS WHICH HAVE HAD A SIGNIFICANT IMPACT ON VALUATIONS. EXPLAINED EDWARD JONES INVESTMENT PHILOSOPHY IS TO BUY AND HOLD QUALITY INVESTMENTS FOR THE LONG TERM. AS SUCH, WE DO NOT BELIEVE ATTEMPTING TO TIME THE MARKET OR EXITING AND RE-ENTERING THE MARKET ON A FREQUENT BASIS ARE PRUDENT INVESTMENT STRATEGIES. APOLOGIZED THAT THE SERVICE THE CLIENT HAS RECEIVED FROM THE FIRM HAS NOT MET HER EXPECTATIONS.

THE POA ON THE ACCOUNT STATES THAT THE FINANCIAL ADVISOR ADVISED THEM TO SELL 8,336 SHARES OF CATERPILLER STOCK IN OCTOBER 2006. THE POA CLAIMS THAT THIS HAS RESULTED IN A TAX BILL OF $102,120. THE POA STATES THAT THE FINANCIAL ADVISOR DID NOT CONTACT THE CLIENTS CPA. THE POA STATES THAT DUE TO THE AGE OF THE ACCOUNT OWNER AND THE TAXES INVOLVED THE SALE WAS MADE WITHOUT PROPER COUNSELING. NO SPECIFIC RESOLUTION WAS PROPOSED.

$102,120.00

THE FINANCIAL ADVISOR RECALLED THAT OVER THE COURSE OF SEVERAL MEETINGS, HIS CONCERN WITH THE VULNERABILITY OF SUCH A LARGE POSITION IN ONE STOCK WAS DISCUSSED. THE FINANCIAL ADVISOR STATED THAT THE POA ON THE ACCOUNT EXPRESSED A SIMILAR CONCERN. THE FINANCIAL ADVISOR STATED THAT HIS RECOMMENDATION TO SELL THE CATERPILLAR SHARES AND REINVEST THE PROCEEDS WAS TO FURTHER DIVERSIFY THE PORTFOLIO. HE ALSO STATED THAT THE POTENTIAL TAX LIABILITY WAS DISCUSSED AND A PORTION OF THE PROCEEDS WERE HELD IN MONEY MARKET FOR THAT PURPOSE. THE FINANCIAL ADVISOR RECALLED THAT IN THE PREVIOUS YEAR THE CLIENT HAD CONSIDERED THE SALE OF THE STOCK AND IT WAS INDICATED TO THE FINANCIAL ADVISOR THAT THIS HAD BEEN DISCUSSED WITH THE TAX PREPARER AT THAT TIME. BASED ON THAT, THE FINANCIAL ADVISOR BELIEVED THE CLIENT WAS AWARE OF THE TAX CONSEQUENCES. IT APPEARS AS THOUGH THE RECOMMENDATION WAS MADE TO FURTHER DIVERSIFY THE PORTFOLIO AND LOWER THE VULNERABILITY OF THE PORTFOLIO BY NOT HOLDING SUCH A LARGE POSITION IN ONE STOCK. IN ADDITION, TAX CONSEQUENCES WERE DISCUSSED.

CLIENT IS QUESTIONING THE RECOMMENDATION TO SELL HER TELEPHONE STOCKS. CLIENT CLAIMS THIS HAS COST HER $10,000 IN TAXES WHEN THIS COULD HAVE BEEN AVOIDED. CLIENT CLAIMS SHE NEVER INTENDED TO SELL HER STOCKS AND FELT PRESSURED TO DOING SO. CLIENT CLAIMS AT HER AGE SHE WILL NEVER BE ABLE TO RECOUPE THESE LOSSES. CLIENT CLAIMS SHE REQUESTED THE TRADE BE CANCELLED EARLY THE NEXT MORNING AND WAS TOLD BY IR THE ORDERS COULD NOT BE CANCELLED.

$10,000.00

OUR RECORDS REFLECT THE TRANSACTIONS WERE EFFECTED IN ACCOUNT IN SEPTEMBER 2004 (NOT 2005 AS REFLECTED IN LETTER). AT THE TIME IN QUESTION, IR INDICATED HE WAS SPEAKING WITH CLIENTS REGARDING CONCERNS WITH THE TELECOMMUNICATION INDUSTRY AND RECOMMENDING CHANGES. ACCORDING TO IR, HE AND IR [OTHER FIRM EMPLOYEE] MET WITH CLIENT TO DISCUSS THE PROPOSED CHANGES. IR STATED CLIENT WAS NOT PRESSURED TO MAKE THE RECOMMENDED CHANGES, HOWEVER, AFTER TAKING THEIR COMMENTS INTO CONSIDERATION CLIENT AUTHORIZED THE LIQUIDATIONS AND PURCHASES. CLIENT WAS PROVIDED WITH TRADE CONFIRMATIONS AND CUSTOMER STATEMENTS WHICH REFLECTED THE ACTIVITY. OUR RECORDS REFLECT THE NEW INVESTMENTS PURCHASED ARE WITHIN THE SCOPE OF THE INVESTMENT OBJECTIVES OF THE ACCOUNT. BASED ON CLIENT'S COMMENTS, IT DOES APPEAR SHE WAS AWARE THE TRANSACTIONS WOULD GENERATE POTENTIAL TAX CONSEQUENCES. WHILE WE UNDERSTAND CLIENT MAY HAVE HAD AN ATTACHMENT TO THE STOCKS LIQUIDATED, THE ORDERS TO SELL THESE STOCKS WERE PLACED WITH CLIENT'S AUTHORIZATION IN SEPTEMBER 2004.