Award NASD Dispute Resolution

In the Matter of the Arbitration Between:

James Balsano, Sr. and Nordon Industries, Inc. Pension Plan dtd 1/31/85, James Balsano Sr. and Ida Mae Balsano, Trustees (Claimants) v. Morgan Stanley DW, Inc. and Dolores Mitchell (Respondents)

Case Number: 03-06739 Hearing Site: New Yorlc, New York

Nature of the Dispute: Customers vs. Member and Associated Person.

REPRESENTATION OF PARTIES

Claimants James Balsano, Sr. ("Balsano") and Nordon Industries, Inc. Pension Plan dtd 1/31/85, James Balsano Sr. and Ida Mae Balsano, Trustees ("Nordon") heremafter collectively referred to as "Claimants": John E. Lawlor, Esq., Mineola, NY.

Respondents Morgan Stanley DW, Inc. ("MSDW") and Dolores Mitchell ("Mitchell") hereinafter collectively referred to as "Respondents": Glen Silverstein, Esq., Leader & Berlcon, LLP, New Yorlc, NY.

CASE INFORMATION

Statement of Claim filed on or about: September 12,2003. Claimants signed the Uniform Submission Agreement: June 30,2003.

Joint Statement of Answer filed by Respondents on or about: December 4,2003. Respondent MSDW signed the Uniform Submission Agreement: December 2,2003. Respondent Mitchell signed the Uniform Submission Agreement: December 4,2003.

CASE SUMMARY

Claimants asserted the following causes of action: unsuitability; breach of fiduciary obligations; misrepresentations and omissions; negligence and negligent misrepresentation; breach of contract; and failure to supervise. The causes of action relate to shares of C-Net, Excite, Amazon, Qwest, V A Linux, Cisco, JDS Uniphase, and Oracle, AOL, Metromedia Fiber Network, Phone.com, V K Telecom and Bandwith Trust, V K Focus Internet Trust, Openwave Systems, Viasystems, Yahoo, CMGI, Exodus Communications, as well as other unspecified securities.

NASD Dispute Resolution ArbitratiraiNo. 03-06739 Award Page 2 of 4

Unless specifically admitted in theu Answer, Respondents denied the allegations made m the Statement of Claim and asserted various afiBrmative defenses.

RELIEF REOUESTED

Claimants requested compensatory and/or rescissory damages in the amoimt of $305,000.00; accrued interest fi-om the date of loss to the date of the award and payment of final judgment; reasonable attorneys' fees; costs, expert and witness fees, and adininistrative expenses; and any other and fiuther rehef the Panel finds just and equitable.

Respondents requested that the Panel dismiss Claimants' Statement of Claim.

OTHER T.SSTTF.S CONSIDERED AND DECIDED

At the hearing in this matter. Claimants reduced their request for damages fi'om $305,000.00 to $180,000.00.

The parties, have agreed that the Award in this matter may be executed in counterpart copies or that a handwritten, signed Award may be entered.

AWARD

After considering the pleadings, and the testimony and evidence presented at the hearing, the Panel has decided in fiill and final resolution of the issues submitted for determination as follows:

1. Claimants' claims are dismissed in their entirety.

2. Any and all rehef not specifically addressed herein is denied.

FEES

Pursuant to the Code, the following fees are assessed:

Filing Fees NASD Dispute Resolution will retain or collect the non-refimdable fiUng fees for each claim:

Initial claim filing fee = $300.00

Member Fees Member fees are assessed to each member firm that is a party in these proceedings or to the member firm that employed the associated person at the time of the events giving rise to the dispute. Accordingly, Morgan Stanley DW, Inc. is a party.

Member surcharge = $ l ,700.00 Pre-hearing process fee = $ 750.00 Hearing process fee = $2,750.00

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Forum Fees and Assessments The Panel has assessed forum fees for each session conducted. A session is any meeting between the parties and the arbitrators, including a pre-hearing conference with the arbitrators, that lasts four (4) hours or less. Fees associated with these proceedings are:

One (1) Pre-hearing session vvdth Panel @ $1,125.00 = $1,125.00 Pre-hearing conference: July 21,2004 1 session

Four (4) Hearing sessions @ $1,125.00 = $4,500.00 Hearing Dates: January 5,2005 2 sessions

Januarv 6.2005 2 sessions Total Forum Fees = $5,625.00

1. The Panel has assessed $2,812.50 of the fonun fees jointly and severally against Claimants. 2. The Panel has assessed $2,812.50 of the forum fees against Morgan Stanley DW, Inc.

Fee Summary

1. Claimants are jointly and severally liable for: Initial Filing Fee =$ 300.00 Forum Fees =$2.812.50 Total Fees =$3,112.50 Less pavments = $1.425.00 Balance Due NASD Dispute Resolution = $1,687.50

2. Respondent MSDW is solely Uable for: Member Fees = $5,200.00 Forum Fees =$2.812.50 Total Fees = $8,012.50 Less pavments = $5.200.00 Balance Due NASD Dispute Resolution = $2,812.50

All balances are payable to NASD Dispute Resolution and are due upon receipt pursuant to Rule 10330(g) of the Code.

NASD Diqiute Rssdiution ArbitratUn No. 03-06739 AwaHl Page 4 of 4

NASD REGULATION

Cycil A. Jef&raoo, Esq. Jassk Ftiadman, Esq. 01enR.Stil&Iman

ARBTTRATinN Pf̂ iywi.

Public Axbitretor, Presiding Chaftpoiou Public Aibitrator Non-Public Arbitrator

Conenrrfag Arbttrators* SfanatnrM

I, the tmdeislgnad Bibhiator, do hereby afiSnn, pnxsnant to Aitide 7507 of ^ and Roles, th^ I am the individaal descrDted hmin and who axecutsd Ibis instnnneiit ̂ cb is my award.

(L.Ja.[J Cyfil A. JefiiacsOD, Bsq. Public Aibitiator, Presiding Chaiiperson

Signature Dato

JfaokFiiedmsn,Esq. Public Aibitntor

SigaatareDate

GleaiR.StiMnan Non-Publio Aibitrator

Signature Date

January 18, 2005 Date of Sarvioe CPor NASD Dispute Resolution use only)

NASD Dispute JtcBOlntioti AiUtntioa No. 03-4)6739 Award P^4of4.

NASD KEGOLATION

Cyril A. JefietBon, Esq. Jsek Friedman. Es). GlSD R. StUdnwii

ARBITRATIOlSr PANEL

Public Aibitrator, Presiding Chairpeison Public Aibitiator Non-Poblic Arbitrator

Coaenrrlat Artrftratora' Si

I, the undoiigDed aibitrator, do hereby sffiim, pursuant U> Anicle 7507 of the Civil Practice Law and RulM, fliat I am the individual described herein and who exeettted diis insttument which i> myawsrd.

Cyril A. JefiRRson. Bsq. Pal̂ lic Aibitrstor, Presiding Chsiipeisan

'•i-TP̂ — lie Aibitnior

Siguiiire Date

tgnatunDa ignatun Date

OlenlLSti&hnan Non-Public Aibitrstor

Signature Dale

January i«, ?nns Date of Service (Fbr NASD Dispute Resolution use only)