6/16/03-6/11/07; [CUSTOMER] IS QUESTIONING THE PURCHASES IN HIS MOTHER'S ACCOUNT FROM 2003- 2007. [CUSTOMER] IS CLAIMING HIS MOTHER WAS INFORMED THE INVESTMENTS WERE IN SAFE, GUARANTEED INVESTMENT PROGRAM WHICH WOULD PAY HER MORE INCOME THAN ANNUITIES AND CDS THAT SHE HELD IN THE CENTRALIA BANKS. [CUSTOMER] INDICATES HIS MOTHER INFORMED THE FA COULD NOT AFFORD TO LOSE MONEY. LOSSES CLAIMED EXCEED $5,000.

$41,000.00

FA MET THE CLIENT AS PART OF HIS DOOR-KNOCKING ROUTINE AND SHE INDICATED IT WOULD FINE TO CONTACT HER W/ INVESTMT IDEAS. IN OCT 2001 FA INDICATED HE CONTACTED CLIENT ABOUT INVESTING MONEY INTO A FREDDIE BOND. AS A RESULT OF THIS CALL THE CLIENT DROVE TO FA'S OFFICE TO OPEN AN ACCT AND PURCHASE THE BOND. AS THE BIZ RELATIONSHIP BETWEEN THE FA AND CLIENT CONTINUED, FA KEPT HER INFORMED OF HIGHLY RATED BONDS. FA STATED EACH BOND HAD AN ESTATE FEATURE AND A TOD WAS ADDED TO THE ACCT. FA INDICATED HE REVIEWED THE DETAILS OF EACH BOND AND HE MAKES IT CLEAR THE BONDS ARE NOT FDIC INSURED. FA ALSO STATED THERE WERE ACCT REVIEWS WITH THE CLIENT AND THE COMPLAINANT AND HIS SISTER WERE ALSO IN ATTENDANCE OF A LEAST ONE EACH. IN 2006 CLIENT BROKE HER ARM AND FA COULD SEE THE CLIENT'S HEALTH WAS DECLINING. FA WAS CONTACTED BY CLIENT AND HER DAUGHTER TO ADD A POA TO THE ACCT IN 6/07. A BOND WAS BEING CALLED DURING THIS TIME AND THE FA DISCUSSED THE REINVESTMENT WITH THE CLIENT AND HER DAUGHTER. IT WAS NOT UNTIL THE CURRENT FA AT THE CENTRALIA BRANCH CONTACTED THE DAUGHTER TO DISCUSS THE LEHMAN BROS BANKRUPTCY FILING THAT CONCERNS WERE EXPRESSED. IN REGARD TO THE REMAINING BONDS HELD IN THE CLIENT'S ACCT, WHILE THE MARKET VALUES HAVE DECLINED, THE INTEREST PAYMENTS HAVE CONTINUED TO PAY (ALTHOUGH THIS IS NOT GUARANTEED). IN THE COMPLAINANT'S LETTER IT STATES THE CLIENT HAS EXPERIENCED A LOSS OF $41,000.00, HOWEVER, THE DECLINE IN THE VALUES OF THE BOND HOLDINGS ARE TECHNICALLY NOT LOSSES UNTIL THE BONDS ARE SOLD. WHILE WE CERTAINLY UNDERSTAND THE COMPLAINANT'S FRUSTRATION WITH FLUCTUATION OF THE CLIENT'S ACCT, MOST INVESTMENTS HAVE SUFFERED FROM THE FINANCIAL CRISIS WE ALL HAVE BEEN EXPERIENCING. AS A RESULT OF OUR REVIEW, WE WILL NOT BE MAKING AN ADJUSTMENT TO THE CLIENT'S ACCOUNT.