CLIENT CLAIMS THAT $115,000 MUNICIPAL BOND PURCHASE WAS UNSUITABLE. CLIENT CLAIMS THE PURCHASE SHOULD HAVE BEEN DIVSERSIFIED INTO MORE THAN ONE INDIVIDUAL MUNICIPAL BOND. CLIENT ALSO CLAIMS THAT THE BOND IN QUESTION (CUSIP 98410ACF0) SHOULD HAVE BEEN RESEARCHED MORE BEFORE HE PURCHASED IT. CLIENT DOES NOT CLAIM ANY LOSSES, HOWEVER AFTER GOOD FAITH DETERMINATION, UNREALIZED LOSSES ARE GREATER THAN $5000.00. (05/21/2008 - 06/23/2009)

IN 2007, CLIENT HAD MUNI BONDS THAT EXPOSED HIM TO AMT. FA RECOMMENDED THEY DO A BOND SWAP TO LIMIT HIS AMT EXPOSURE. THE FA RECOMMENDED XENIA WATER REVENUE MUNI. IT WAS INVESTMENT GRADE, TRADING AT A DISCOUNT AND INSURED BY CGIF. BOND THEN GOES INTO TECHNICAL DEFAULT, HOWEVER STILL PAYING INTEREST. CGIF IS ALSO REINSURED BY ASSURED GUARANTY. HAS OUTSIDE MUNI BOND HOLDINGS AS WELL. PURCHASES WERE SUITABLE FOR HIS ACCOUNT OBJECTIVES AND INVESTMENT EXPERIENCE. IN COMPARISON TO HIS OUTSIDE HOLDINGS AND NET WORTH HE WAS NOT OVER CONCENTRATED.