Investor Alert

Mutual Fund Breakpoints: Are You Owed a Refund?

You may be eligible for a refund of a portion of the front-end sales charge that you paid when you purchased Class A shares of a mutual fund from your securities firm. An industry-wide survey indicated that investors did not receive discounts in approximately one out of every five transactions that were eligible for discounts.

Are you one of these investors? Ask yourself:

• Have I purchased a mutual fund with a front-end sales load?
• Have I purchased additional funds in the same fund family?
• Have close family members purchased shares of this fund or fund family?
• Is the total of all my purchases and my family's purchases together greater than $25,000?

Discounts on front-end sales loads are offered for larger mutual fund investments and usually start at $50,000, but sometimes can be as low as $25,000. If you did not receive a discount to which you were entitled, NASD requires your securities firm to refund the money.

Read our Investor Alert to learn whether you are eligible for a refund and what steps you should take to get a refund.

Equity-Index Annuities - A Complex Choice

Sales of equity-indexed annuities (EIAs) have grown considerably in recent years. Although one insurance company includes the word "simple" in the name of their product, EIAs are anything but easy to understand. One of the most confusing features of an EIA is the method used to calculate the gain in the index to which the annuity is linked. To make matters worse, there is not one, but several different indexing methods. Because of the variety and complexity of the methods used to credit interest, investors will find it difficult to compare one EIA to another.

Before you buy an EIA, you should learn about the various features of this investment and be prepared to ask your insurance agent, broker, financial planner, or other financial professional lots of questions about whether an EIA is right for you.

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News Dispatch

NASD Charges Long Island Firm, its President, and Two Former Managers as a Result of Fraudulent "Boiler Room" Sales Practices

NASD has announced that it has filed a complaint charging Yankee Financial Group, Inc. of Melville, N.Y., its President and a former branch manager with engaging in high-pressure, boiler-room type sales practices that defrauded investors of $8 million. NASD also permanently barred 11 other individuals, who worked for Yankee Financial and two other firms, for related fraudulent conduct.

NASD charged that, in the fall of 2001, Richard F. Kresge, Yankee Financial's President and majority owner, opened offices in Brooklyn and Staten Island. Brokers in these offices used high-pressure sales tactics, including misrepresentations, baseless price predictions, and omissions of material facts, to persuade investors to purchase shares of three highly speculative Over-the-Counter Bulletin Board (OTCBB) securities: Silver Star Foods, Inc.; Western Media Group Corp.; and Golden Chief Resources, Inc. In many instances, Yankee Financial brokers targeted sales of these stocks to the elderly and others for whom they were patently unsuitable.

Investors can obtain more information and the disciplinary record of any NASD-registered broker or brokerage firm by calling (800) 289-9999 or by sending an email through NASD's Web Site.

Past Issues of Investor News Now Available

In response to numerous requests, previous issues of Investor News are now available on our Web site.

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