The Financial Industry Regulatory Authority ("FINRA") recently posted "Margin Debt at Record Levels: Know the Risks" http://www.finra.org/investors/highlights/margin-debt-record-levels-know-risks, which warns that:

The customers alleged that Mr. Cain ordered the liquidation of securities in their UBS account although there were no outstanding margin calls and [the customers] were not in default on any loan or obligations.

Claimant submitted (UBS Bates Stamp 002112- Daily Margin House Call Report MGED651P dated October 12, 2012) which is made part of Arbitrator's Exhibit 2. In accordance with this Margin Report on October 12, 2012, and Mr. Cain's sworn testimony, the customer accounts with UBS over which Mr. Cain as Complex Director had ultimate oversight, were no less than $199,742.00 in deficit (negative equity), let alone below the 35% margin maintenance requirement for the uncovered option writing that was the basis for these collateral, options and loan accounts.

Mr. Cain as Complex Director for UBS had both marketing and compliance responsibilities. He and his subordinates wearing their marketing hats contacted the customers in advance of liquidating their accounts with UBS to try to have them meet their contractual obligations with UBS, both as to negative equity and to margin requirements. They were not required to contact the customer under the terms of the UBS Client Relationship Agreement and Loan Disclosure. Any modification of the Client Relationship Agreement had to be in writing, which Mr. Cain and his subordinates did not amend by having conversations with the customers. The options available to UBS under the Client Relationship Agreement are summarized in the Statement of Claim at pages 7 and 8. UBS also had security interest in all of the customers' assets held or carried by any UBS entity. The customers were both experienced lawyers and one of them claimed to be experienced in options and selected the investments. Their profiles, including for a family trust for which one of them was a trustee and beneficiary, sought aggressive and speculative trading. Purportedly, only 20% of their assets were with UBS, but they did not transfer any of their own assets to remedy their negative equity position.

Mr. Cain testified that if he did not liquidate the customers; accounts to enforce rights UBS had, UBS' Margin Department would have done so to comply with regulatory rules. Given the volatility of these investments UBS believed it necessary to liquidate the customers' open positions to determine the actual amount of the deficit at the time and then to liquidate their assets held with UBS to meet regulatory and UBS requirements.

In this Arbitrator's view, Mr. Cain acted appropriately. Despite the marketing downside to his decision, he took the appropriate compliance action

CLAIMANTS ALLEGE IT WAS REPRESENTED TO THEM THEIR OPTIONS POSITIONS WOULD NOT BE LIQUIDATED IF FUNDS TO COVER A MARGIN DEBIT WERE TRANSFERRED BY AN AGREED DEADLINE. TIME FRAME; OCTOBER 2012- JANUARY 2013.

I DENY ALL CLAIMANTS' ALLEGATIONS AND BELIEVE THEY ARE TOTALLY WITHOUT MERIT. THE CUSTOMERS' ACCOUNT WAS SUBJECT TO A MARGIN CALL AND WAS IN DEFICIT. PURSUANT TO APPLICABLE RULES. INVESTMENTS WERE REQUIRED TO BE LIQUIDATED TO SATISFY THE MARGIN CALL. THE CUSTOMERS WERE GIVEN SUFFICIENT NOTICE REGARDING THE POSSIBILITY OF MARGIN CALLS IN THEIR ACCOUNT AND HOW TO AVOID SUCH CALLS BY MAKING SURE SUFFICIENT FUNDS ARE IN THE MARGIN ACCOUNT. PURSUANT TO APPLICABLE RULES, MARGIN CALLS MUST BE SATISFIED OR THE FIRM COULD BE IN VIOLATION OF THOSE MARGIN RULES. I DID NOT PROMISE OR GUARANTEE THAT POSITIONS IN THE CUSTOMERS' ACCOUNT WOULD NOT BE LIQUIDATED IF FUNDS WERE TRANSFERRED IN BY A PARTICULAR DEADLINE. FURTHER, WHILE THE CUSTOMERS INDICATED THAT THEY WOULD TRANSFER FUNDS IN TO REMEDY THE MARGIN CALL, THEY DID NOT DO SO. FINALLY, UNDER THE CUSTOMERS' MARGIN ACCOUNT AGREEMENT, THEY WERE SPECIFICALLY NOTIFIED THAT THE FIRM IS NOT REQUIRED TO GIVE ANY PRIOR NOTICE IF POSITIONS ARE LIQUIDATED AS THE RESULT OF A MARGIN CALL OR DEFICIT. IN INTEND TO DEFEND THESE CLAIMS VIGOROUSLY AND PURSUANT TO FINRA RULES, SEEK EXPUNGEMENT OF THESE FALSE ALLEGATIONS FROM MY PUBLIC RECORD.

Understand Margin Calls

You Can Lose Your Money Fast and With No Notice.

If your account falls below the firm's maintenance requirement, your firm generally will make a margin call to ask you to deposit more cash or securities into your account. If you are unable to meet the margin call, your firm will sell your securities to increase the equity in your account up to or above the firm's maintenance requirement.

However, your broker may not be required to make a margin call or otherwise tell you that your account has fallen below the firm's maintenance requirement. Your broker may be able to sell your securities at any time without consulting you first. under most margin agreements, even if your firm offers to give you time to increase the equity in your account, it can sell your securities without waiting for you to meet the margin call.

Margin Trading Risks

There are a number of risks that you need to consider in deciding to trade securities on margin. These include:

• Your firm can force the sale of securities in your accounts to meet a margin call. If the equity in your account falls below the maintenance margin requirements under the law-or the firm's higher "house" requirements-your firm can sell the securities in your accounts to cover the margin deficiency. You will also be responsible for any short fall in the accounts after such a sale.
• Your firm can sell your securities without contacting you. Some investors mistakenly believe that a firm must contact them first for a margin call to be valid. This is not the case. Most firms will attempt to notify their customers of margin calls, but they are not required to do so. Even if you're contacted and provided with a specific date to meet a margin call, your firm may decide to sell some or all of your securities before that date without any further notice to you. For example, your firm may take this action because the market value of your securities has continued to decline in value.
• You are not entitled to choose which securities or other assets in your accounts are sold. There is no provision in the margin rules that gives you the right to control liquidation decisions. Your firm may decide to sell any of the securities that are collateral for your margin loan to protect its interests.
• Your firm can increase its "house" maintenance requirements at any time and is not required to provide you with advance notice. These changes in firm policy often take effect immediately and may cause a house call. If you don't satisfy this call, your firm may liquidate or sell securities in your accounts.
• You are not entitled to an extension of time on a margin call. While an extension of time to meet a margin call may be available to you under certain conditions, you do not have a right to the extension.
• You can lose more money than you deposit in a margin account. A decline in the value of the securities you purchased on margin may require you to provide additional money to your firm to avoid the forced sale of those securities or other securities in your accounts.
• Open short-sale positions could cost you. You may have to continue to pay interest on open short positions even if a stock is halted, delisted or no longer trades.