THE CLIENT ALLEGES THAT THE POSSIBILITY OF LEHMAN DEFAULTING WAS NEVER BROUGHT UP WHEN PURCHASING THIS SECURITY. TIME FRAME: FEBRUARY 8, 2008

$113,000.00

THIS IS A CASE OF A UBS FINANCIAL PRODUCT FAILURE OF A LEHMAN BROTHERS BOND, AA RATED BY THE S & P AT THE TIME OF SALE, AN "A" RATED INVESTMENT GRADE BY THE S & P THE "DAY" PRIOR TO FAILURE. THIS WAS PRESENTED AND SOLD BY UBS FINANCIAL PRODUCT SPECIALIST. I WAS SIMPLY THE BROKER OF RECORD. I, AS THE FINANCIAL ADVISOR, ACTED AS A CONDUIT OF UBS IN THE SALE OF A LEHMAN STRUCTURED PRODUCT, RELYING ON UBS & THE S&P RATING, TO BE DOING ITS APPROPRIATE & ACCURATE DUE DILIGENCE.

TIME FRAME: FEB. 2008 CLAIMANT ALLEGES MISREPRESENTATION, UNSUITABILITY, NEGLIGENCE, AND FRAUD REGARDING INVESTMENT RECOMMENDATIONS MADE BY FA CHRISTINE COTE.

$300,000.00

$230,000.00

I DENY THE ALLEGATIONS AS STATED IN THIS COMPLAINT. THE CLIENT IS A MAN OF MEANS AND SOPHISTICATION WHO HELD LARGE PERSONAL AND CORPORATE ASSETS NOT ONLY WITH MY FIRM BUT WITH MULTIPLE INVESTMENT FIRMS AND BANKS AT THE TIME HE WAS DOING BUSINESS WITH ME. AT THE POINT OF SALE, THIS INVESTMENT WAS SUITABLE FOR THE CLIENT AND ONLY BECAME AN ISSUE DUE TO THE FINANCIAL CREDIT COLLAPSE IN 2008 AND THE BANKRUPTCY OF LEHMAN BROTHERS.

TIME FRAME: FEB. 8, 2008 THE CLIENT ALLEGES THAT HER FINANCIAL ADVISOR MISLED HER TO THE RISK OF HER INVESTMENT IN STRUCTURED PRODUCTS

$438,000.00

$117,000.00

CLIENT INVESTED IN THE RETURN OPTIMIZATION PRINCIPAL PROTECTED STRUCTURED NOTE IN FEBRUARY OF 2008. AT THAT TIME AND UNTIL THE DAY THE COMPANY FILED FOR BANKRUPTCY, THE COMPANY WAS AN AA/A- RATED CREDIT WITH NO EXPECTATIONS OF BANKRUPTCY. IN THE WEEKS LEADING UP TO THE BANKRUPTCY, UBS AND OTHER RESEARCH ANALYSTS CONTINUED TO RECOMMEND INVESTING IN THE NOTES, AS WELL AS OTHER FIXED INCOME SECURITIES. AS WELL, ONE WEEK AFTER THE BANKRUPTCY, MOODY'S INVESTMENT SERVICE ISSUED A STATEMENT DEFENDING THE RATING THAT THEY HAD ASSIGNED. THE CLIENT'S HAD AT THAT TIME, A LARGE HOLDING OF GENERAL ELECTRIC STOCK WHICH CREATED A POSSIBLE CONCENTRATION RISK. AS THEY STATE IN THEIR LETTER, THEY RECOGNIZED THE POSSIBLE RISK AND WISHED TO BEGIN A DIVERSIFICATION PLAN. THE NOTE, WHICH HAD CERTAIN RETURN GUARANTEES AS WELL AS 10% PRINCIPAL PROTECTION, OFFERED THE CLIENT'S AN OPPORTUNITY TO RETAIN THEIR INTEREST IN GE STOCK, BUT BEGIN THE PROCESS OF DIVERSIFYING AWAY FROM A POSSIBLE CONCENTRATED POSITION. AS AN EXPERIENCED ADVISOR I FELT VERY COMFORTABLE RECOMMENDING THE NOTE AS A TOOL TO BEGIN THE PROCESS OF DIVERSIFICATION. THE NOTE WAS WELL RATED AND WAS DUE IN 18 MONTHS. IT APPEARED TO BE COMPLETELY SUITABLE FOR THE CLIENT. ADDITIONALLY, THROUGH TRAINING AND EDUCATION I HAD RECEIVED AT UBS, I WAS TOLD THAT UBS CONDUCTED ITS OWN DUE DILIGENCE ON ALL STRUCTURED NOTES THAT WERE OFFERED TO OUR CLIENTS. I WAS TOLD THAT ONLY THE BEST AND MOST SECURE FINANCIAL INSTITUTIONS WERE ALLOWED TO OFFER STRUCTURED NOTES THROUGH OUR SYSTEM. AS FAR AS I KNOW, UBS CONTINUED TO OFFER STRUCTURED NOTES RIGHT UP UNTIL THE BANKRUPTCY.