John Smith

1234 Investor St.

Los Angeles, CA 90024

(213) 000-0000

Date

National Association of Securities Dealers, Inc.

Arbitration Department

33 Whitehall Street

New York, New York 10004

Re: Statement of Claim and Request for Simplified Arbitration

John Smith, Claimant and

William Jones and XYZ Brokerage Company

Dear Sir or Madam:

Please accept this letter as my Statement of Claim and request for arbitration under the Small Claims rules of the Code of Arbitration Procedure. Also included is my Uniform Submission Agreement.

My name is John Smith and I live in Los Angeles County, California. I am 30 years old and am employed as a computer programer. I am bringing this claim against Respondent William Jones, a registered representative employed by Respondent XYZ Brokerage Company.

XYZ Brokerage Company (XYZ) does business in the State of California as a securities broker-dealer and maintains a branch office in Los Angeles, California. Its office is located at [This refers to the address of the branch used by the customer].

Before I met William Jones, my only previous investing experience was in mutual funds bought through my employer's payroll plan.

About the first week of May 1, 1996, Mr. Jones called me to introduce himself and he suggested that I make an investment in ABC Company. Mr. Jones told me that ABC was a company that specialized in recycling plastics, and that the company was coming out with a new product which Mr. Jones said would revolutionize recycling. Mr. Jones promised me that the stock, which was trading at $15 per share, would rise to at least $22 per share in a few months.

After talking to Mr. Jones, I agreed to buy the stock, but only on the condition and with the understanding, that Mr. Jones would enter a limit order to sell at $13 per share to minimize my risk. I had told Mr. Jones that I had never made an investment like the one he suggested before and that I could not afford to risk much money. Mr. Jones told me that there was a way to guarantee that, if the stock went down, my risk would be limited. Mr. Jones then explained to me that he could put a limit order on the stock to sell it at $13 per share and, based on his assurance that he would do that, I agreed to purchase the stock. Attached is a copy of the confirmation slip sent to me by Mr. Jones and XYZ. (Exhibit A). [Exhibit A, in this case, would be a copy of the relevant monthly statement or confirmation slip showing the purchase]. Mr. Jones had assured me that the stock would rise to $22 per share and that, even if it didn't, I could never lose more than $2 per share.

About the first week of June, I was reading the newspaper and there was an article about ABC company. The article said that the ABC product that Mr. Jones had told me about would not be completed at the time ABC had originally announced. The article went on to say that the price of ABC stock had dropped to $8 per share as soon as the company announced that its new product would not be completed on schedule.

I was disappointed that the price of the stock had dropped, but I didn't worry too much because I knew that there was no way I could lose more than $2 per share because of the limit order. I was shocked when Mr. Jones called me later that day and said: "I forgot to put on the stop. You lost $7,000." (Exhibit B). [Exhibit B would be a copy of the statement or confirmation showing the sale].

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