TIME FRAME: JANUARY 2007 CLIENT ALLEGES THAT HE PURCHASED THE AUCTION RATE SECURITIES ON THE RECOMMENDATION OF THE FA WHO REPRESENTED THE INVESTMENT AS MONEY MARKET ACCOUNTS THAT WERE LIQUID. CLIENT FURTHER ALLEGES THAT THE TRUE NATURE OF THE ARS WAS NOT DISCLOSED. DAMAGES ESTIMATED TO BE IN EXCESS OF $5,000.

$5,000.00

$25,000.00

THE COMPLAINT AROSE BECAUSE OF UNPRECEDENTED MARKET EVENTS THAT CAUSED THE BREAKDOWN OF LIQUIDITY IN THE MARKET FOR AUCTION RATE SECURITIES. THE FIRM, UBS, AGREED TO REPURCHASE THE ARS SECURITIES AT ISSUE AT PAR VALUE FROM THE CLIENT. THIS WAS NOT A SETTLEMENT OF A DISPUTE BETWEEN THE CLIENT AND THE REPRESENTATIVE AND WAS NOT BASED ON THE MERITS OF THE CLIENT'S SPECIFIC CONCERNS OR ANY FINDING OF FAULT OR WRONGDOING BY THE NAMED REPRESENTATIVE. THE NAMED REPRESENTATIVE WAS NOT A PARTY TO, AND DID NOT AGREE TO OR PARTICIPATE IN, THE REPURCHASE AGREEMENT BETWEEN THE FIRM AND THE CLIENT. THE NAMED REPRESENTATIVE DID NOT MAKE ANY PAYMENTS TO THE CLIENT AND THE NAMED REPRESENTATIVE WAS NOT ASKED TO AND DID NOT CONTRIBUTE TO THE SETTLEMENT AMOUNT. THE LISTED "SETTLEMENT AMOUNT" REPRESENTS ONLY THE GROSS INITIAL PAR VALUE OF THE ARS POSITION AND DOES NOT TAKE INTO ACCOUNT THE ACTUAL VALUE OF THE ARS POSITION AT THE TIME THE FIRM RECEIVED IT BACK FROM THE CLIENT IN CONNECTION WITH THE SETTLEMENT. THIS MATTER IS BEING REPORTED AS A SETTLEMENT PURSUANT TO THE REQUIREMENTS OF FINRA REGULATORY NOTICE 09-12.

1. 1-COUNT PETIT LARCENY 2. MISDEMEANOR

MISDEMEANOR

A. DISMISSED B. 7/13/95 C. 6 MONTHS PROBATION D. 6 MONTHS E. 7/13/95 F. $00.00