1. CUSTOMER COMPLAINTS

2.  Review the Complaint Is the complaint within the jurisdiction of your agency? If not, forward to appropriate agency.Is the complaint within the jurisdiction of your agency? If not, forward to appropriate agency. Are there other complaints against:Are there other complaints against: The firm?The firm? The agent?The agent? The branch office?The branch office? If there are complaints, are they similar?If there are complaints, are they similar?

3. CUSTOMER COMPLAINTS Conduct background checks on all targets in the CRD and other databases such as corporate records and your agency’s internal tracking program. Check registration status of all targets. Conduct background checks on all targets in the CRD and other databases such as corporate records and your agency’s internal tracking program. Check registration status of all targets. Did the complainant provide enough information to work the complaint? If not, send a request for additional information. Did the complainant provide enough information to work the complaint? If not, send a request for additional information.

4. CUSTOMER COMPLAINTS Can the complaint be resolved by making a few telephone calls? Can the complaint be resolved by making a few telephone calls? Examples– accounting problem, check not received, certificate not received, etc. Is complaint of a serious nature (such as theft, conversion, etc.) that requires immediate action? Is complaint of a serious nature (such as theft, conversion, etc.) that requires immediate action?

5. CUSTOMER COMPLAINTS  Acknowledge receipt of complaint to complainant  Send target letter to the home office of the broker dealer What documents do you want to ask for? Make request reasonable, yet adequate to address concerns. Consult your agency’s policy on whether to include a copy of the complaint. What documents do you want to ask for? Make request reasonable, yet adequate to address concerns. Consult your agency’s policy on whether to include a copy of the complaint.

6. CUSTOMER COMPLAINTS Do you want an affidavit or statement from: agent, manager, compliance officer, sales assistant, trader, etc. Do you want an affidavit or statement from: agent, manager, compliance officer, sales assistant, trader, etc. If records are not voluntarily provided via target letter you may wish to consider, if feasible, a visit to the agent’s office or the use of a subpoena. If records are not voluntarily provided via target letter you may wish to consider, if feasible, a visit to the agent’s office or the use of a subpoena.

7. CUSTOMER COMPLAINTS  Are there other parties such as clearing brokers, other market makers, banks, other regulators, etc. that may provide useful information?

8. CUSTOMER COMPLAINTS  Review all information received. Is target’s response adequate? Is target’s response adequate? Does complainant need to confirm/deny anything in target’s response? Does complainant need to confirm/deny anything in target’s response? Do other parties need to confirm any information? Do other parties need to confirm any information?

9. CUSTOMER COMPLAINTS  Evaluate the target on a continual basis Are they being cooperative? Do the documents support their claims? Are they hesitant to release information? Are they being cooperative? Do the documents support their claims? Are they hesitant to release information? If issues are complicated or the responses don’t seem truthful, you may want to consider taking the target’s on-the-record testimony. If issues are complicated or the responses don’t seem truthful, you may want to consider taking the target’s on-the-record testimony. What is/are their defense(s)? What is/are their defense(s)?

10. CUSTOMER COMPLAINTS  Evaluate the complainant on a continual basis Are they being open and cooperative? Are they being open and cooperative? Would they be willing to testify if the case went to hearing? If so, evaluate their ability to be an effective witness i.e. if their story remains consistent, if they have health issues such as memory loss. If not, can you proceed with the case without their testimony? Would they be willing to testify if the case went to hearing? If so, evaluate their ability to be an effective witness i.e. if their story remains consistent, if they have health issues such as memory loss. If not, can you proceed with the case without their testimony?

11. CUSTOMER COMPLAINTS  Evaluation of the complaint If no violations, send closeout letter. As the investor may file for arbitration, your closeout letter should be carefully worded. It is recommended in most cases, especially where there is a verbal dispute with no corroborating evidence, your letter indicate there are no “apparent” violations based upon the information in the possession of your agency. If no violations, send closeout letter. As the investor may file for arbitration, your closeout letter should be carefully worded. It is recommended in most cases, especially where there is a verbal dispute with no corroborating evidence, your letter indicate there are no “apparent” violations based upon the information in the possession of your agency.

12. CUSTOMER COMPLANITS For example: Documentation not in the possession of your agency, i.e. testimony, may be available to you but may be taken or provided during an arbitration hearing.

13. CUSTOMER COMPLAINTS The reason for using this type of language is to dissuade a firm’s attorney from using your letter as a definitive statement in an arbitration against the complainant. The reason for using this type of language is to dissuade a firm’s attorney from using your letter as a definitive statement in an arbitration against the complainant.

14. CUSTOMER COMPLAINTS If violations are present, discuss the case with your supervisor or an attorney to determine the best course of action to resolve the complaint (i.e., de minimis violation letter, letter of caution, administrative actions, etc.) If violations are present, discuss the case with your supervisor or an attorney to determine the best course of action to resolve the complaint (i.e., de minimis violation letter, letter of caution, administrative actions, etc.) If administrative action is warranted, be sure you have documented the violations via documents and testimony. If administrative action is warranted, be sure you have documented the violations via documents and testimony.

15. COSTUMER COMPLAINTS  Other Considerations Unlike many other financial deals which are done pursuant to a written contract, securities transactions are, for the most part, done orally. Therefore, absent any other corroborating evidence, you may encounter a “he said-she said” situation. Unlike many other financial deals which are done pursuant to a written contract, securities transactions are, for the most part, done orally. Therefore, absent any other corroborating evidence, you may encounter a “he said-she said” situation. If your review has documented a violation, was there a failure to supervise on the part of the supervisor/firm? If so, document appropriately. If your review has documented a violation, was there a failure to supervise on the part of the supervisor/firm? If so, document appropriately. If you are unable to document a violation, maintain the information in some form of database in the event future complaints are received. If you are unable to document a violation, maintain the information in some form of database in the event future complaints are received.

16. CUSTOMER COMPLAINTS  Important Reminders Be sure to look for additional violations even though they are not alleged by the complainant. A typical example of this is a complaint where the investor indicates they were promised a 50% return in one year. In addition to reviewing this type of complaint for misrepresentations, be sure to review for registration (i.e., firm, agent, branch office, securities) and suitability, etc. Be sure to look for additional violations even though they are not alleged by the complainant. A typical example of this is a complaint where the investor indicates they were promised a 50% return in one year. In addition to reviewing this type of complaint for misrepresentations, be sure to review for registration (i.e., firm, agent, branch office, securities) and suitability, etc.

17. CUSTOMER COMPLAINTS Do not make representations to investors which lead them to believe you will be able to obtain a rescission offer/restitution for them. Remember, with the exception of a small number of states, the only “established” means by which a customer can seek a return of their funds is via arbitration/ litigation. Do not make representations to investors which lead them to believe you will be able to obtain a rescission offer/restitution for them. Remember, with the exception of a small number of states, the only “established” means by which a customer can seek a return of their funds is via arbitration/ litigation.