Customer alleges unsuitable investment allocations to international growth and emerging markets stocks, lack of diversification in managed account structured note portfolio and misrepresentations regarding tax exempt municipal bond yields.

$26,000.00

$14,500.00

"I vehemently deny that the customer's investment allocation was unsuitable. The customer is an experienced and sophisticated investor. The customer's investment plan was discussed with the customer multiple times at the outset of the relationship in or around April and May 2022. We regularly updated the customer thereafter as assets came into the firm and investments were made, both in writing and in multiple meetings and calls. With respect to the specific asset classes mentioned, the portfolio's small allocation to international equities was made through professional managers and with the full knowledge of the customer. There was no "emerging market" stock exposure in the portfolio. The customer was offered the opportunity to sell these international stock positions at a gain the day after purchases were made, but chose not to do so. With respect to tax exempt municipal bonds, the approach was discussed with the customer prior to purchase and was based on our initial understanding of the customer's tax situation based on the customer's representations in the account opening documentation and existing market conditions. Subsequently, when we were advised that the customer's tax rate was expected to be lower, the customer was offered the opportunity to exit the municipal bonds at a profit, but the customer declined to do so. With respect to structured notes, these investments, which constituted a small portion of the customer's overall portfolio, were consistent with the customer's investment profile, and were discussed on multiple occasions with the customer, who approved the allocation."