COMPLAINT, FILED BY CLIENTS' NIECE ON THEIR BEHALF, ALLEGED THAT THE CLIENTS DID NOT UNDERSTAND ENGLISH AND THE BROKER DID NOT SPEAK SPANISH, AND THAT AS A RESULT THE CLIENTS THOUGHT THEY WERE BUYING A CD BUT INSTEAD THEY HAD INVESTED IN MUTUAL FUNDS IN AN INVESTMENT ACCOUNT. COMPLAINT ALSO ALLEGED THAT MISREPRESENTATIONS WERE MADE SUBSEQUENT TO THE PURCHASES, WHICH OCCURRED ON JUNE 29, 2007. DAMAGES ARE UNSTATED, BUT BELIEVED TO BE IN EXCESS OF $5,000.

$24,000.00

I DENY ALL THESE ALLEGATIONS. THE CLIENTS, WHO WERE CURRENT WELLS FARGO CUSTOMERS, WERE REFERRED TO ME IN 6/07. THEY WANTED TO OPEN A JOINT BROKERAGE ACCOUNT. WE DISCUSSED THEIR INVESTMENT OBJECTIVES/RISK TOLERANCE; THEY CONFIRMED THEIR TIME HORIZON/INVESTMENT OBJECTIVE. WE DISCUSSED WEALTH BUILDER FUND, ITS FEATURES & THE REQUIRED DISCLOSURES; ALL OF WHICH CLIENTS ACKNOWLEDGED/UNDERSTOOD. THEY DIDN'T HAVE ANY QUESTIONS, INDICATED THEY UNDERSTOOD MUTUAL FUNDS & HAVE SEEN MARKET VOLATILITY BEFORE. THEY SIGNED REQUIRED NEW ACCOUNT/DISCLOSURE DOCUMENTS, WHICH THEY RECEIVED COPIES OF, AS WELL AS, A PROSPECTUS. WITH THEIR PERMISSION THE ACCOUNT WAS OPENED/THE TRADE EXECUTED. INVESTMENT RECOMMENDATION WAS DEEMED SUITABLE BASED OF THEIR INVESTMENT OBJECTIVE, TIME HORIZON, & KNOWLEDGE OF MUTUAL FUNDS. EVEN THOUGH ENGLISH IS CLIENTS' 2ND LANGUAGE, THEY UNDERSTOOD THE PRODUCT & THE ACCOUNT DOCUMENTATION. AFTER THE ACCOUNT WAS OPENED & RECEIVING THEIR MONTHLY STATEMENTS, THEY NEVER ONCE CAME IN TO DISCUSS/DISPUTE THE ACCOUNT; EVEN WHEN THE MARKET/BALANCE WAS DOWN. IN 7/08, AFTER MARKET DROPPED TREMENDOUSLY, THEY WANTED TO MEET TO DISCUSS THEIR ACCOUNT. CLIENTS WANTED TO MOVE THE ORIGINAL INVESTMENT BACK TO SAVINGS ACCOUNT. I EXPLAINED WE COULDN'T AS THE INVESTMENT WAS DOWN IN VALUE. WE AGREED THAT WE WOULD WATCH THE ACCOUNT. WE SPOKE IN 8/08 & CLIENTS DIDN'T WANT TO MEET, NOR MAKE ANY DECISIONS. ON 11/5/08, THEY CAME IN W/ A FAMILY MEMBER TO SEE THEIR BALANCE. I ASKED IF THEY WANTED TO SELL; THEY MADE NO DECISION. ON 11/15, THEY CAME IN WITH THEIR NIECE TO SEE THEIR BALANCE & DISCUSS THE ACCOUNT. I EXPLAINED THE MARKET CONDITIONS & ITS EFFECT ON THEIR ACCOUNTS BALANCES. AGAIN, THEY MADE NO DECISION. ON 11/18, THE NIECE CALLED TO FILE A COMPLAINT. ON 11/19, THE CLIENTS CALLED & AUTHORIZED A SELL TO MOVE ALL FUNDS OUT OF THE EXISTING BROKERAGE ACCOUNT; I REQUESTED WRITTEN INSTRUCTIONS. I DOCUMENTED THE CONVERSATION. I DID NOT BRUSH THEM OFF OR NEGLECT THEIR SITUATION.

CLIENT CLAIMS LB PLACED FUNDS INTO A HIGH RISK INVESTMENT. CLIENT SAYS INITIAL INVESTMENT HAS LOST 18%, OVER $5,000.

I DENY THE ALLEGATIONS. I MET WITH THE CLIENT AND HIS INVESTMENT OBJECTIVE WAS GROWTH AND THAT HE DID NOT NEED THE FUNDS FOR 3-5 YEARS. I RECOMMENDED THE WELLS FARGO WEALTH BUILDER FUND, DISCUSSED THE PRODUCT WITH THE CLIENT AND PROVIDED HIM A PROSPECTUS. I SPECIFICALLY INFORMED THE CLIENT THAT WE COULD NOT BASE FUTURE RETURNS ON PAST PERFORMANCE. WE FURTHER DISCUSSED MUTUAL FUND PRICE IS SUBJECT TO THE VOLATILITY OF THE MARKET AND THAT THE FUND'S PRICE WILL CHANGE ON A DAILY BASIS (UP AND DOWN). HE AGREED WITH THE RECOMMENDATION AND THE FUND WAS PURCHASED. WHILE COMPLETING THE NEW ACCOUNT PAPERWORK, I REVIEWED THE MUTUAL FUND ACKNOWLEDGMENT FORM, INCLUDING ALL MUTUAL FUNDS DISCLOSURES. THE CLIENT UNDERSTOOD THE RISKS ASSOCIATED WITH PURCHASING A MUTUAL FUND. A SECOND PROSPECTUS WAS MAILED TO THE CLIENT ONCE THE TRANSACTION WAS COMPLETED.