CLIENT ALLEGES THAT FINANCIAL ADVISOR "MADE AN UNSUITABLE RECOMMENDATION TO GO INTO THE(PAINEWEBBER) ACCESS PROGRAM IN 1993. ALLEGED DAMAGES: ESTIMATED TO EXCEED $5000.

I DENY THIS COMPLAINT. IT IS BASELESS AND WITHOUT MERIT.

CBOE

SEE SUMMARY

Decision

Censure

AHMIEL E. BAUM, A REGISTERED REPRESENTATIVE OF PAINE WEBBER, INCORPORATED ("PAINEWEBBER"), AN EXCHANGE MEMBER ORGANIZATION, WAS CENSURED.

IN ITS DECISION, THE CBOE ACKNOWLEDGED THAT THE CUSTOMER HAD GIVEN MR. BAUM CERTAIN VERBAL AUTHORIZATION TO USE DISCRETIOIN IN THE CUSTOMER'S ACCOUNT.

CLAIMANTS ASSERTED ALLEGATION OF UNSUITABILITY AND UNAUTHORIZED TRADING IN CONNECTION WITH THE PURCHASE OF CALL OPTIONS FROM JULY 1997 TO DECEMBER 1997. CLAIMANTS WHO HAD A NET WORTH IN EXCESS OF $8 MILLION AND MORE THAN $3 MILLION INVESTED AT PAINEWEBBER, ALLEGED LOSSES OF $680,000 TRADING OPTIONS. CLAIMANTS CONTENDED THAT RESPONDENT AHMIE BAUM EXCEEDED THE $300,000 AMOUNT THAT THEY AUTHORIZED FOR OPTIONS TRADING.

$680,000.00

$580,000.00

PAINEWEBBER AND MR BAUM DENIED THE ALLEGATIONS BY CLAIMANTS, AND ARGUED THAT CLAIMANTS WERE HIGH-NET WORTH INVESTORS WHO ASKED MR. BAUM TO EMULATE THE OPTIONS TRADING DONE BY CLAIMANT'S BROTHER, WHO WAS AND REMAINS A CLIENT OF MR. BAUM. NONETHELESS, IN AN EFFORT TO AVOID THE UNCERTAINTY AND RISKS ASSOCIATED WITH ARBITRATION, THE PARTIES AGREED TO SETTLE THE MATTER FOR $580,000. MR. BAUM HAS AGREED TO CONTRIBUTE TO THE SETTLEMENT. FOR FURTHER INFORMATION, PLEASE CONTACT [BROKER DEALER CONTACT PERSON] AT 201-902-6669.

SHEARSON FILED AN ACTION AGAINST A CLIENT, [CUSTOMER] SEEKING PAYMENT OF A DEBIT BALANCE. THE CLIENT COUNTER CLAIMED ALLEGING THE DEBIT AND LOSS OF $147,000.00 RESULTED FROM UNAUTHORIZED USE OF DESCRETION.

$147,000.00

$73,500.00

SHEARSON AGREED TO WRITE OFF THE DEBIT BALANCE AND PAY THE CLIENT, [CUSTOMER], THE SUM OF $22,500.00. I AM TO PAY SHEARSON THE SUM OF $36,750.00 WHICH REPRESENTS 50% OF THE SETTLEMENT AMOUNT.