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PER BOA: THIS MATTER INVOLVES THE SALE OF AUCTION RATE SECURITIES (ARS). THE TRANSACTION(S) AT ISSUE TOOK PLACE BEFORE MID-FEBRUARY 2008, WHEN THE ARS MARKET SUFFERED WIDESPREAD AUCTION FAILURES AND ILLIQUIDITY. THE FINANCIAL ADVISOR DID NOT CAUSE, CONTRIBUTE OR HAVE ANY CONTROL WHATSOEVER OVER THESE MARKET EVENTS. THE FIRM REACHED AGREEMENT WITH CERTAIN OF ITS REGULATORS, PURSUANT TO WHICH IT REPURCHASED ARS FOR THEIR FULL PAR VALUE FROM CERTAIN CLIENTS, INCLUDING THE INSTANT CLIENT, WHERE THEY COMPLAINED OR NOT. THE FINANCIAL ADVISOR WAS NOT A PARTY TO THAT AGREEMENTS, DID NOT MAKE ANY PAYMENT TO THE CLIENT, AND WAS NOT ASKED TO AND DID NOT CONTRIBUTE TO THE REPURCHASE AMOUNT. THE SETTLEMENT AMOUNT IN ITEM 11 ABOVE REFLECTS THE PAR VALUE OF THE REPURCHASED ARS, AS REQUIRED BY FINRA REGULATORY NOTICE 09-12.
PER REP: THE CUSTOMER COMPLAINT CONCERNS EVENTS THAT OCCURRED AFTER I LEFT BANC OF AMERICA (BOA). THE CLAIM NAMED BOA & ANOTHER BROKER WHO TOOK OVER THE ACCOUNT, AND THERE WERE NEVER ANY ALLEGATIONS AGAINST ME. THE CLIENT STATED I WAS NOT RESPONSIBLE FOR HIS LOSSES, AND LATER MOVED HIS PORTFOLIO TO MY NEW FIRM. BECAUSE I WAS NOT NAMED IN THE CLAIM, I WASN'T ASKED TO CONTRIBUTE TO ANY SETTLEMENT. BOA IS CORRECT WHEN IT SAYS THAT I "DID NOT CAUSE, CONTRIBUTE, OR HAVE ANY CONTROL WHATSOEVER" OVER THE EVENTS THAT CAUSED MY CLIENT'S INVESTMENTS TO FAIL. THE CLIENT WAS SEEKING CASH-LIKE TAX EXEMPT INVESTMENTS WITH HIGH RATES. HIS PREFERRED VARIABLE RATE DEMAND NOTES WERE UNAVAILABLE. I WAS ASKED BY BOA TO OFFER ARS AS ALTERNATIVE. THE CLIENT EXPRESSED CONCERN ABOUT LIQUIDITY. I EXPLAINED TO BOA THAT CLIENT NEEDED DAILY LIQUIDITY WHICH MEANT THE ARS WERE NOT SUITABLE. IN RESPONSE THE BOA TRADING DESK ASSURED ME THAT DUE TO THE SIZE OF THE CLIENT'S PORTFOLIO, THEY WOULD GUARANTEE LIQUIDITY. HE PURCHASED SOME ARS, AND I THEN LEFT BOA. I DO NOT KNOW WHAT THE SUCCESSOR BROKER DID WITH THE ACCOUNT AFTER I LEFT. IN 9/2008, AS A RESULT OF A REGULATORY SETTLEMENT, BOA UNCONDITIONALLY OFFERED TO REPURCHASE ALL AUCTION RATE SECURITIES SOLD TO INDIVIDUALS. IN RESPONSE, THE CUSTOMER TENDERED HIS ARS TO BOA. LATER, BOA SETTLED THE CUSTOMER'S CLAIM. THE ORIGINAL BROKER CHECK REPORT FOR THE OTHER BROKER NAMED IN THE CLAIM STATED THE SETTLEMENT WAS $65,000. BOA INCORRECTLY REPRESENTS THAT THE CLAIM WAS SETTLED ON 6/9/09. I AM ADVISED THAT IT WAS SETTLED ON 2/27/09. I DO NOT UNDERSTAND WHY IT REPORTED A CUSTOMER CLAIM THAT WAS NOT DIRECTED AT ME, AND THAT CONTAINS VERIFIABLY INCORRECT INFORMATION.
Disclosures can be customer complaints or arbitrations, regulatory actions, employment terminations, bankruptcy filings and certain civil or criminal proceedings that they were a part of.
Disclosures can be customer complaints or arbitrations, regulatory actions, employment terminations, bankruptcy filings and certain civil or criminal proceedings that they were a part of.