CLIENT STATES HE IS RETIRED AND THE FA SOLD HIS INCOME GENERATED STOCKS AND PLACED THE PROCEEDS INTO A LONG TERM GROWTH MUTUAL FUND. CLIENT STATED HE ADVISED THE FA HE NEEDED TO TAKE DISTRIBUTIONS IN ORDER TO MEET LIVING EXPENSES AND AFTER THE CHANGES TO THE PORTFOLIO WERE MADE, THEY CEASED TO RECEIVE INCOME. CLIENT ALSO STATES HE INCURRED COMMISSION CHARGES OF OVER $6,000.00.***** ARBITRATION ALLEGATIONS: PLAINTIFF ALLEGES UNSUITABILITY AND MISREPRESENTATION WITH REGARDS TO THE SALE OF A NUVEEN INCOME FUND AND SUBSEQUENT PURCHASE OF AMERICAN FUNDS. (AMOUNT CLAIMED: $40,000 IN ACTUAL DAMAGES AS WELL AS UNSPECIFIED PUNITIVE DAMAGES.)

$5,000.00

$14,000.00

THE ACCOUNT WAS CREATED ON 03/12/07 AND ASSETS WERE RECEIVED INTO THE ACCOUNT ON 03/21/07 THROUGH A TRANSFER FROM ANOTHER FIRM. IN 07/07 AND 05/08, NUVEEN FUNDS WERE SOLD AND THE PROCEEDS WERE INVESTED IN AMERICAN FUNDS. THE CLIENT BELIEVES THE COMMISSIONS ASSOCIATED WITH THE TRANSACTIONS WERE EXCESSIVE; HOWEVER, THE FA DISCOUNTED THE NUVEEN TRADES AND BREAKPOINTS WERE APPLIED TO THE AMERICAN FUNDS PURCHASES. AT THE TIME OF THE TRADES, THE CLIENT WOULD HAVE RECEIVED CONFIRMATIONS WHICH PROVIDED DETAILS OF THE TRANSACTIONS TO INCLUDE COMMISSIONS. IN ADDITION, THE CLIENT HAS INDICATED HE WAS WITHDRAWING $1,500 PER MONTH FROM HIS ACCOUNT AT HIS PREVIOUS FIRM. HOWEVER, OUR RECORDS REFLECT $30,205.56 WAS WITHDRAWN FROM THE EDWARD JONES ACCOUNT IN 2007 AND $10,746.25 HAS BEEN WITHDRAWN TO DATE FOR 2008. THEREFORE, IT APPEARS THE PROJECTED WITHDRAWALS HAVE BEEN AND WILL BE EXCEEDED. IN ADDITION, THE CLIENT SIGNED A LARGE ONGOING ACCOUNT WITHDRAWAL LETTER ON 08/09/07 IN WHICH HE WAS ADVISED IF HE CONTINUED WITHDRAWING FUNDS AT THE CURRENT RATE(S); THE ACCOUNT BALANCE COULD BE DEPLETED. THE FIRM BELIEVES THE FA MADE HIS SUGGESTIONS IN GOOD FAITH BASED ON INFORMATION THAT WAS AVAILABLE TO HIM. IN ADDITION, IT IS OUR OPINION THE TRANSACTIONS WERE COMPLETED WITH THE CLIENT'S KNOWLEDGE AND AUTHORIZATION. WHILE THE CLIENT HAS INDICATED HE IS A CONSERVATIVE INVESTOR WITH AN "INCOME" OBJECTIVE, A COPY OF THE FEBRUARY 2007 STATEMENT FROM THE CLIENT'S PRIOR FIRM INDICATES A LARGE PORTION OF THE PORTFOLIO WAS INVESTED IN AGGRESSIVE AND/OR AGGRESSIVE INCOME INVESTMENTS. IT WAS NOT UNTIL A VERIFICATION LETTER WAS RECEIVED FROM THE CLIENT ON OR AROUND 02/11/08 THAT HE REQUESTED AN UPDATE TO THE INVESTMENT OBJECTIVES TO "INCOME". BASED ON THE FINDINGS OF OUR REVIEW, WE WILL BE MAKING NO ADJUSTMENTS TO THE ACCOUNT IN REGARD TO THIS SITUATION.*****ARBITRATION SETTLED FOR $14,000.00