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Broker Dealer Analysis

Wall Street can be a rewarding as well as frustrating experience. Principals of our firm have spent the better part of century involved in all aspects of the industry as members of the exchanges, chief executives of broker-dealers, arbitrators and officials for the NASD and exchanges and on the floor of the New York Stock Exchange itself. We have acted as consultants to people that want to get into the business, people that are in the business that want to get out of it and finally people that have been affected by it in one way or another.  

We are experts in transaction analysis, exchange and SEC rules and regulations, listing and delisting requirements, arbitration procedures and the circumstances under which it can be avoided, the proper firms to bring public certain types of financing and all of the accruements that go with being a full time member of the community.

Our associates have also been deeply involved in the banking community as both consultants, advisors, expert witnesses and strategists. We have been instrumental in arranging financing for a number of substantial bank re-financings.

We thought that it would be of interest to our readers to have some insight into what a brokerage firms deem their own responsibilities to itself and to its customers. Each firm is obliged to have a manual which presents it's policies as they relate to salesman and customers. Often, these documents are used in litigation by savvy investors attempting to show that the firm did not follow its own internal policies. 

The case we are presenting is that of a firm that hires Independent Contractors instead of its own brokers in an attempt to avoid both the withholding of taxes and the responsibility for surveillance. 

Our "Alice in Wonderland" firm is affiliating with a firm that already has a clearing agreement and the new kid on the block is just going to "tuck in". This type of arrangement is probably the most complicated and is an attempt by a none-member firm to keep its own identity.

The document is semi-standard for what it is and serves to cover the firm to some degree when the employees go off on their own agenda. Policing salesmen to a large extent is impossible and if someone wants to take advantage of his role, there is almost no stopping him.

The material enclosed is representative but the names have been altered to protect the innocent.

If we can interpret any of the industry jargon for you, e-mail us at Chapman Spira & Carson. LLC.

and we will come right back at you. Happy reading

 

Merrill Goldman and Company Inc.

WRITTEN SUPERVISORY PROCEDURES

Member of:
NASD, NYSE, SIPC, MSRB & SIA

Date of Revision: November 1, 1998

DIRECTORY

Although these procedures offer a complete guide to firm procedures certain sections or topics may not be needed or used by certain personnel.  To that effect, certain section may be deleted from these manuals.

It should also be noted that certain appendixes may also be added.

SECTION 1: COMPLIANCE

SECTION 2: FIRM PROCEDURES & COMPLIANCE

SECTION 3: SALES PROCEDURES

SECTION 4: BRANCH OFFICES

SECTION 5: MARKET MAKING ACTIVITIES

SECTION 6: UNDERWRITING PROCEDURES

SECTION 7: MUNICIPAL SECURITIES

SECTION 8: OPTION PROCEDURES

SECTION 9: SALES FORCE SUPERVISION

APPENDIX 1: OPTION STRATEGIES AND CUSTOMER POLICIES

APPENDIX 11: BRANCH OFFICE PROCEDURES AND POLICIES

APPENDIX III: NEW YORK (19X) OFFICE PROCEDURES

 

INTRODUCTION

Merrill Goldman and Company Inc. is a registered brokerage firm that was founded 1937.  The company offers quality investing services to clients across the country.  The company has raised over 500 million dollars in equity capital, and has participated in over 215 initial public offerings. 

Specialties of the firm and its management include, Order Execution, most aspects of Corporate Finance, Evaluation and Research of small to medium size companies, Equity Market Development,  and International Finance, Consulting and Management.

Merrill Goldman when dealing with retail customers strives to provide quality service, and to develop a relationship with each and every customer.  The company maintains its corporate headquarters in New York, from which the company manages its operations throughout the world.

BACKGROUND

Merrill Goldman conducts its securities transactions on a fully disclosed basis through Ajax, Gourgem and Cheat, Inc. in New York, New York. Merrill Goldman has put in place a communication and supervisory structure designed to facilitate open communication and cooperation.  To that end, brokers are encouraged to talk and meet regularly with their branch managers and off ice operations coordinators.   Communication with regional and corporate officers is also available.  Thus below are listed the organizational structure of Merrill Goldman Corporation.  Throughout these procedures Mr. Dirtender and Weasel will be referred to and considered the senior management of Merrill Goldman Corporation:

Rhufus A. Rulebender - President & CEO
Alphonso Trustmenot III - Vice President & CFO
Marjorie Misfeasance - Vice President & COO
Dickie Dirtender Administration and Operations
Chief Compliance Officer

Regarding supervision of:

OPERATIONS & SALES:

COMPLIANCE & BOOKS/RECORDS All compliance questions and procedural policies should be addressed to the immediate supervisor, who can then contact either Dirtender or Weasel.

Merrill Goldman Corporation is engaged in business as a Broker/Dealer conducting a general securities business on a fully disclosed basis including general securities, municipal's, options and direct participation programs.

Merrill Goldman Corporation was incorporated in New York and maintains current registration or membership in the following:

1. A Broker/Dealer registered with the Securities & Exchange Commission - (SEC) -[Filing # 8-3948573
2. A member of the National Association of Securities Dealers, Inc. - (NASD) - [Rm. ID. # 00405685
3. A certified broker/dealer by the State of New York, Department of Corporations.
4. A member of the Municipal Securities Rulemaking Board - (MSRB)
5. A member of the Securities Investor Protection Corporation - (SIPC)
6. A member of the New York Stock Exchange and other principal exchanges.

While these procedures outline firm policies and guidelines, branch and/or regional managers do hold the right to enforce stricter policies.  These policies would be added as a supplement to these procedures.

SECTION 1 - COMPLIANCE -

The following section outlines the basic compliance principles expected by all personnel registered or unregistered to follow while associated by Fleecem and Howe.  Further information regarding compliance is available through the NASD manual, of which several copies are maintained in each office. 

please consult either the manual or your General Securities Principle regarding compliance for specific questions. Throughout this manual any mention of review or approval by a Principal shall constitute a physical signature or initials of the first and last document for review in any series.

Section 1.1 - BASIC PRINCIPLE OF CONDUCT:

The firm adheres to the basic principles of conduct as outlined in the NASD Manual under Section III paragraph 1. However, due to the nature of business that Merrill Goldman conducts, service is of the utmost importance, and thus principles and conduct are expected to excel above those outlined in the Manual.  Personnel breaking the guidelines set forth by the firm will be subject to termination and or punishment by the NASD.

Section 1.2 - GIFTS AND GRATUITIES:

The firm does not encourage the use of gifts or gratuities between brokers and clients.  Regulations regarding specifications of gifts and or gratuities may be found in the NASD Manual.  Before receiving a gift or gratuity personnel should consult with the appropriate principal within the firm, any gift or gratuity not approved in writing by a principle may result in termination or punishment.

Section 1.3 - SHARING OF ACCOUNT:

Merrill Goldman does not allow brokers to share accounts with clients.

Section 1.4 - REGISTRATION AND LICENSING:

It is required that all personnel conducting securities business be registered with both the NASD and each state in which they wish to conduct business.  The firm also strongly encourages each registered representative to become a registered principle as to manage and supervise activities of other brokers at the firm.  To discuss these policies further please consult the NASD Manual under Section III paragraph 27 and the NASD By-Laws Schedule C. Please discuss registration within certain states or jurisdictions with your branch manager or the designated person appointed by Merrill Goldman Corporation.

Section 1. 5 - PRINCIPALS FOR SPECIFIC AREAS AND BOOKS AND RECORDS:

Most operational and procedural questions and supervision are managed by Louise Onenote and Helen Off-key.  Should any problem arise please contact either of them regarding operations, procedures or firm policies.  Louise Onenote is responsible for the finances and accounting of the firm and Merrill Goldman's books and records.

Section 1.6 - BACKGROUND INVESTIGATIONS:

The firm maintains the right and will conduct background investigations into prospective employees, to ascertain by investigation the good character, business repute, qualifications, and experiences, the firm will also request a "Form U-5" from previous employers in the  securities industry.  For further information, please refer to Section III, Paragraph 27 of the NASD Manual.

 Section 1.7 - CURRENCY COMPLIANCE AND REPORTING:

The firm does not allow the use of cash currency to settle securities transactions.

Section 1.8 - ANNUAL COMPLIANCE MEETING:

The firm requires that all registered employees meet annually to discuss firm procedures, changes in rules or regulations and compliance standards.  Two meetings are conducted by the senior management of Merrill Goldman Corporation and will generally be held during the fall and spring of each year.

Section 1.9 - ACCEPTANCE OF NEW ACCOUNT:

The firm will open accounts for new clients given the appropriate information is received, and the firm accepts the customer.  Each new account application will be approved by an officer (branch manager), [either signed or initialed] and will not be opened, nor will any business be conducted regarding said account without such approval.

 Section 1.9(a) - REQUIRED PAPERWORK FOR ACCEPTANCE OF NEW ACCOUNTS

Merrill Goldman does allow its registered personnel to open new customer accounts without prior completed application with Branch Manager approval.   However, if in 30 days a completed new account application is not received a letter will be sent to the customer (copy to the RR) requesting a completed new account application. If in 60 days a completed new account application has not been received a report will be sent to the broker of record notifying that the account will be frozen in 30 days if a application form is not received. If in 90 days a new account application has not been received the account will be frozen and no further business will be conducted until the application is received.

Section 1.10 - PRIVATE SECURITIES TRANSACTIONS:

Before participating in any private securities transaction, any associated person shall provide written notice to the firm through the sales supervision principle, describing the proposed transaction and the proposed role of the employee.  Further information regarding NASD Regulation and firm procedures can be obtained in Article III Section 40 of the NASD Manual.

Section 1. 11 - OUTSIDE BUSINESS ACTIVITIES:

Each person associated with the firm in any registered capacity that conducts outside business activities must inform the firm through written notice and will not enter into such outside activities without the written approval of the managing principal.

Section 1.12 - MAINTENANCE OF WRITTEN SUPERVISORY PROCEDURES (WSP's)

Gordon Gooddog will be responsible for reviewing the Written Supervisory Procedures 's of the firm every 6 months.  During this review, updates regarding current procedures or regulations will be conducted.  Upon updating these procedures, the changes will be disseminated throughout the firm.

Section 1.13 - MAINTENANCE OF SERIES 7 LICENSE

Merrill Goldman Corporation is its efforts to comply with NASD guidelines against the hanging of securities licenses has implemented the following procedure. For a broker to be considered active, a nominal amount of commission must be generated every 6 months.  This amount of gross commission must equal at least $500.00.

Should a registered representative not generate said commissions a letter will be sent from the firms compliance department informing the broker of the NASD Guideline and our request for them to make their license active.

If in twelve months the nominal commission has not been generated the firm will begin termination

procedures.

Section 1.14 - NEW BROKER ORIENTATION MEETINGS

Merrill Goldman requires that all registered personnel attend a company "New Broker Orientation" within the first 90 days of registration.  If this requirements is not met termination may result.

If unable to attend a extension may be granted in writing by a branch manager, or a local NBO meeting may be held.  Should this happen, a written exception or notice of attendance must be received by the firm's compliance department.

Section 1.14(a) -  NBO ENFORCEMENT POLICIES

If a broker has not attended a NBO meeting after 60 days, a letter will be sent by the firm's compliance to the broker informing them of firm policy.

Section 1.15 - INDEPENDENT CONTRACTOR'S AGREEMENT

A signed and completed Independent Contractor's Agreement (ICA) must be on file with Merrill Goldman Corporation.  If an ICA is not on file termination may result.  The firm will notify all brokers that do not have an ICA on file and allow a 30 day time period to meet compliance.

SECTION 2 - FIRM PROCEDURES AND COMPLIANCE-

Section 2.1 - REGULATION T:

Regarding Regulation T, customer extensions and buy-ins, the firm follows the procedures of its clearing agent, Gourgem and Cheat, Inc. . Information regarding Regulation T can be found in the NASD handbooks as well as by consulting a branch manager.

Section 2.2 - HANDLING OF CUSTOMER FUNDS, SECURITIES, AND DOCUMENTS:

The handling of customer funds, certificates, and documents may only be conducted by a registered principle of the firm, or personnel authorized by the firm to handle such funds.  These funds are not held by the firm, and must be forwarded to Gourgem and Cheat, Inc. immediately, there will be no exceptions. All checks should be made payable to Gourgem and Cheat, Inc. . In the event that customer funds and/or securities are received by Fleecem and Howe, such funds and/or securities will be forwarded to Gourgem and Cheat  and full and complete documentation will be maintained by authorized and supervised personnel of the firm.

At no time may checks or money orders be deposited in the Representative's personal bank account. 

COMMINGLING OF CUSTOMER FUNDS ARE A DIRECT VIOLATION OF FIRM POLICY AND NASD RULES & REGULATIONS. 

Any violation of this policy is grounds for termination and will be reported to the appropriate regulatory agencies.

Section 2.3 - SALES LITERATURE AND CORRESPONDENCE:

All correspondence being sent out on behalf of the firm, or by an employee of the firm shall be reviewed and approved by an officer (branch manger), [either signed or initialed].

All sales literature must be approved by the firm's compliance officer as well as the branch manager and advertisement department of the NASD in Washington D.C..

All incoming mail will be opened by either the branch manager, or a person designated by the branch manager.  Upon opening of the mail ft will be distributed to the appropriate personnel.

Section 2.4 - CUSTOMER COMPLAINTS-.

All customer complaints will be handled by the branch mangers, and copies of such complaints will be held at each branch office as well as the home office.   Immediate action will be taken by the branch manager and the firm's compliance officer to resolve any problems. 

Gordon Gooddog is responsible for the handling of customer complaints.

Section 2.5 - FREE RIDING AND WITHHOLDING:

The firm does not allow any Free-Riding or Withholding and will take severe action against any employee discovered conducting such action.

Section 2.6 -   INSIDER TRADING:

The firm in no way or form approves of or makes available material, non-public information to its salespeople or its clients.  Both Rufus Watchguard and Maria Nosegrabber are responsible for reviewing the firms, employees and insiders, accounts.  These accounts are reviewed quarterly in an effort to uncover any unusual or illegal transactions.  These reviews include comparison of recent press releases and financial reports by the issuing companies to activities within each account to uncover such activities governed as insider trading.

Merrill Goldman creates a complete "Chinese Wall" to restrict non-public information gained during corporate finance and research activities from reaching unauthorized personnel.  Any breach in this "Chinese Wall" will result in immediate action, and expulsion from the firm if necessary.

The firm will coordinate public information to support the activities of the firm on occasion, however this is in the due course of business.  Employees are required to undergo a program to explain the firms procedures regarding the above mentioned policies and such policies are reviewed annually at the compliance meeting in March. In the event that a

Registered Representative becomes aware of insider information, they shall report to the firms compliance officer, who will then contact if necessary the proper regulatory authorities for instructions.

Section 2.6(a) - OUTSIDE BROKERAGE ACCOUNTS

In and effort to enforce the above procedure Merrill Goldman Corporation requires that all employees and registered personnel maintain brokerage account only with Merrill Goldman Corporation.  In the event that a written exception is granted, duplicate confirmations and account statements must be sent to the firm's compliance officer. Merrill Goldman will require an annual update as to all accounts held by its registered and non-registered personnel.  Should any misstatements or conflicts arise immediate action will be  taken and termination could result.

Section 2.7 - RESTRICTED STOCK AND RULE # 144:

Restricted stock is that which is currently unregistered under the Securities Act of 1933, or stock owned by an insider or officer of the issuing company.  Policy and procedure regarding restricted stock is as follows:

1. Restricted stock must be held for one year before the stock is eligible for sale.

2. Upon verification of the holding period, the stock may be sold given the appropriate paperwork and authorization is completed.

3. Regarding stock restricted due to the position of the holder of the shares (i.e. Insider, Director, etc.) other restrictions apply:

4. The Insider is restricted to the number of shares he or she may sell.  These restrictions are as follows: The greater of 1% of the outstanding shares of stock or the average weekly volume of the previous four weeks.

Upon approval by a registered principal Rule #144 Forms should be completed and mailed as follows:

3 Original Copies to:

Securities and Exchange Commission
450 5th Street, N.W.
Washington, DC 20549

1 Original Copy to the:
NASD
NASDAQ Market Surveillance,
9513 Key West Ave.
Rockville, MD 20850

1 Original Copy to Gourgem and Cheat, Inc. :

1 Original Copy to be Held in our Files.


Section 2.8 - DISCRETIONARY ACCOUNTS

A discretionary account is one which a customer grants to the Registered Representative or registered Principal the authorization to transact securities on his/her behalf.

It is the policy of Merrill Goldman Corporation that discretionary accounts are not allowed.

Section 2.9 - DIRECT PARTICIPATION PROGRAMS:

The following procedures should be observed in the distribution of any limited partnership (business related to retailing of private limited partnership interests).  All limited partnerships must be approved by the firm's corporate finance committee, as well as the compliance officer . 

Should a Direct Participation Program be approved in such a manner the following procedures will be implemented upon distribution.

Section 2.9a - OFFERING MEMORANDUM:

The offering memorandum i.e., prospectus will be kept, controlled and distributed by the designated person at the branch/OSJ.

 

 

Section 2.9b - OFFERING MEMORANDUM LOG

The offering memorandum will be entered in log form and numbered.   Offering memorandum which do not result in a sale should be collected after the offering is closed.

Section 2.9c - OFFEREE QUESTIONNAIRE

The salesperson desiring to have a copy of the memorandum delivered to a potential purchaser should complete the form of Offeree Questionnaire, or sufficient substitute, and return  to the appropriate person in the branch/OSJ for mailing.

Section 2.9d - COVER LETTER - PROSPECTIVE PURCHASER

A cover letter will be prepared for the prospective purchaser and sent along with a copy of the memorandum.  This cover letter will request the prospective purchaser to indicate receipt of the memorandum by signing and returning a duplicate of the letter in the envelope provided.

Section 2.9e - SAMPLE COPY - NOT FOR DISTRIBUTION

Occasionally an attorney, accountant or other financial or legal advisor may be in need of a copy of the offering memorandum.  At such time the offering memorandum should be stamped "sample copy - not for distribution" and the cover letter should also designate this when sent.

Section 2.9f - CLOSE OF OFFERING

At the close of the offering, copies of letters, logs and any return copies of the offering memorandum should be returned to the home office - attention Compliance Department.

 Section 2.9g -(K) (2) (D ACCOUNT - SPECIAL RESERVE BANK ACCOUNT FOR THE EXCLUSIVE BENEFIT OF CUSTOMERS

As required by SEC Rule 15c3-3 (e) the home office will maintain a copy and forward all checks which will be made payable to the issuer or issuers escrow agent.   Should customers mistakenly make checks or bank drafts payable to Merrill Goldman Corporation instead of the issuer or issuers escrow agent the (k) (2) (i) account will be utilized (in and out same day).

Section 2.9h - SUBSCRIPTION AGREEMENT - SUITABILITY

QUESTIONNAIRE

As required by Section 28 (c) a subscription agreement and suitability questionnaire per issue will be reviewed and endorsed by the Registered Representative and approved by a Principal of the firm for each accredited and non-accredited investor.  The branch will maintain a copy and forward originals to the home office.

Section 2.10 - NASD RULE 88-84

In accordance with NASD rule 88-84, wherein all registered representatives must have a designated supervisor, Merrill Goldman Corporation has the following procedures to comply: Upon any person or persons becoming classified as registered representatives with Merrill Goldman Corporation they will be assigned to a specific branch/OSJ office.  

Each branch/OSJ has a branch manager who will be a General Securities Principal and therein responsible for said registered representative's direct supervision.

Each branch office will maintain a list of all registered representatives assigned to their specific branch/OSJ office.  In addition, the home office will maintain a master list that contains all registered representatives company wide with their respective branch/OSJ office and thus their direct supervisor.  The home office will also maintain a list of all branch managers and their designated branch/OSJ office.

In addition, each registered representative, individually or collectively and not less than annually, at an interview or meeting will participate wherein compliance matters will be discussed.

Section 2.11 - OUT OF STATE REQUIREMENTS/PROCEDURES

Merrill Goldman Corporation will have available at its principal/main office all records for each state in which the firm has registered. All states will receive updates and/or amendments through the Central Registration Depository

 

System (CRD).  Furthermore, where required, applicable states shall receive copies of

  1. An annual audit ninety (90) days after fiscal year ends

  2. Renewal of Registration filed on annual basis through the CRD

  3. A copy of all amendments to Form BD

Section 2.12- OUT OF STATE CLIENTS

All Registered Representatives are reminded that neither sales or sale solicitation may be made in any state in which the Registered Representative and firm is not licensed, and the securities which are offered must be qualified for sale in the state. Solicitation is defined to include communication, written or verbal, which may be construed as an offer to sell any security. A new Registered Representative or one who has just transferred from another securities firm is not authorized to do business for Merrill Goldman Corporation in another state until the Representative receives a written statement from our firm advising that he/she is property registered.

Section 2.13 - STATE REGISTRATION FEES

It is the responsibility of the registered representative to pay for all registration fees in connection with securities business conducted in any particular state.

SECTION 3 - SALE PROCEDURES -

Section 3.1 - EXECUTION OF ORDERS:

To execute securities orders the ticket must be submitted to the firm wire operator.  Upon his/her receipt the order will be wired to Gourgem and Cheat, Inc.   Alternatively, the appropriate exchange where they will be executed in a timely fashion. Merrill Goldman Corporation also holds the right to execute customer orders itself on NASDAQ Issues or in those issues in which the firm makes a market.

Reporting of execution will happen upon execution directly from the exchange or Gourgem and Cheat to the branch office from which the order originated. The home office will keep copies of all tickets and execution reports entered by the firm, as well as all Good Till Cancel orders and Day Orders in behalf of the branch offices. All International,

Bond and Mutual Fund orders will be telephoned upon execution to the appropriate branch personnel. All tickets will be reviewed by a principal.

Section 3.2 - NEW ACCOUNT FORMS AND REQUIREMENTS:

The firm will open accounts for new clients given the appropriate information is received, and the firm accepts the customer.  Each new account application will be approved by the branch manager [either signed or initialed] and will not be opened, nor will any business be conducted regarding such account without required approval. The representative that opens an account will be required to understand the investment objectives of the customer. The customer will also need to sign a W-9 or W-8 for the Internal Revenue Service.  Should this form not be completed upon the generation of sales proceeds 31% will be withheld for possible tax consequences.

Section 3.3 - ACCOUNT REVIEW AND UPDATE:

All account information including customer account statements will be reviewed and updated no less than every 12 months.  During this review, necessary account information will be confirmed and review for any unusual or illegal activity will also be conducted.  This review will be conducted by Gordon Gooddog or personnel designated by him.

Section 3.4 - RECOMMENDATIONS TO CUSTOMERS:

The firm demands that each broker know their customers and understand their objectives to investing. Any malpractice, or misconduct will be grounds for dismissal. Recommendations should be made to achieve the client's investment objectives in the most cost efficient manner.Any disregard for the wishes of a customer and their investment objectives will be immediately reviewed by the direct supervisor.

Section 3.5 - REVIEW OF BUSINESS DOCUMENTS:

The firm does conduct an annual review of ALL business documents and materials.  Eli Elliott is responsible for this review, and will either sign or initial documents that have been reviewed.

Section 3.6 - MISUSE OF CONFIRMATION OR STATEMENTS:

Any misuse of confirmations or statements will result in severe action by the firm and may result in termination.

Section 3.7  REVIEW OF  - TRANSACTIONS:

All transactions will be reviewed by the branch manager on the trade date.  This comparison will include a review of the ticket information as compared to the confirmation information, to define any discrepancies and to assure that no illegal conduct has taken place. Should a discrepancy be uncovered the operational staff will take the necessary steps to either canceled or reverse the order.

Section 3.8 - RECORD-KEEPING:

All salesmen are required to maintain current and accurate records of their customer's investment objectives, as well as investment positions. A history of transactions, trades, deposits and withdrawals will be maintained by each registered representative for their customers.  The records must be kept readily accessible for two years. All records will be periodically reviewed by supervising principals who will include branch managers and head office principals.

SECTION 4 - BRANCH OFFICES -

Merrill Goldman maintains several branch offices, each registered with the NASD.  Each office is managed by a General Securities Principal, and each office maintains current NASD/MSRB Manuals as well as the Firm's Written Supervisory Procedures.  The SIPC logo and sign will be displayed at all Offices of Supervisory Jurisdiction. 

Merrill Goldman has branch office locations at the following addresses:

CORPORATE OFFICES
41 Bowery  Street, Suite 711
New York, New York 10283`
Branch Manager - Wiggle Free
Office Number - 2364Q

The branch manager and his/her designates (qualified General Securities Principal's) will manage the office and Its day to day operations.  On a weekly basis, communication will be conducted from the home office to discuss the weeks, business and any problems or issues that should be addressed.

Any compliance problems will be copied to the home office, where action will be initiated. Each branch office will be visited and reviewed no less than once a year by Ruby Oswald or his/her designate (qualified General Securities Principal).  All branch coordination and compliance will be assisted by Judith Latefordindin..

Section 4.1 - BRANCH OFFICE RESPONSIBILITIES:

Each branch office will be assigned a Branch Manager, an Assistant Branch Manager, an Order Clerk, and an office support person.  The branch manager will be responsible for the day to day operations of the branch office.

Currently the firms has 31 Branch Office(s).

Section 4.2 - BRANCH RECORDS AND FILES FS:

Section 4.2a - DAILY TRANSACTION BLOTTER:

Copies of trade tickets and the daily transaction blotter will be maintained by the branch office/OSJ with applicable information.

Section 4.2b- CASH RECEIPT & DISBURSEMENTS / SECURITIES

RECEIVED &  DELIVERED BLOTTERS

Cash Receipts and Disbursements Blotter - A chronological record of the receipt and disbursement of monies.

Securities received and Delivered Blotter - A chronological record of the receipt and delivery of securities to the clearing firm Both blotters will be maintained at the home and branch offices of Merrill Goldman Corporation.  All securities and funds should be forwarded on the same day received.

Section 4.2c - ORDERS/TRADE TICKETS

OSJ off ices will transmit all orders to the home off ice for entry and execution.  Upon execution the home office will report to the OSJ for confirmation of execution.

Section 4.2d - SALESMEN RECORD-KEEPING

Each Representative must keep a record of transactions for each customer.

Section 4.2e - CORRESPONDENCE FILE

A separate chronological correspondence file will be maintained by the branch/OSJ.  Per Section 27 (c) a review of correspondence of salesmen pertaining to solicitation sent to members of the public will have written approval (by signature or initial) by the designated Principal.

Section 4.2f - CUSTOMER COMPLAINT FILE

The branch/OSJ will maintain a customer compliant file as part of its books and records. It is the firm's policy that the home office will respond quickly to written customer complaints and to maintain copies of such complaints along with the written response, including all appropriate support documents as may be necessary. 

All written customer complaint information will be cross filed with the home office.  All complaints must be communicated to the home office - Compliance Department immediately.

Section 4.2g - ADVERTISEMENT

Advertising and promotional communications must be approved in advance by the Compliance Department located at the home office.  Such approval is to be received in writing following a review of the actual advertisement or promotional literature.  This rule extends to any and all sales literature, newsletters, brochures, display advertisements, promotional articles, and other communications intended to further the activities of the branch/OSJ and its representatives.

SECTION 5 - MARKET MAKING ACTIVITIES -

Cheatem and Howe Securities Corporation Market Making Symbol -- CHEAT

Section 5.1 - SUPERVISION OF ACTIVITIES

The supervision of Trading and Market Making activities will be conducted by Maria Nosegrabber, Vice President of Operations for Merrill Goldman Corporation.   Decisions regarding firm policies and guidelines will be directed by Mr. Nosegrabber on a day to day basis.

Section 5.2 -   MARK-UP POLICIES

The firms mark-up policies regarding Market Making Activities are as follows: In general a 5% markup will be considered to be excessive although the firm will hold the right to charge more than 5% on transactions that warrant such a fee.  However in calculating the mark-up the firm will evaluate, all relevant circumstances, including market conditions with respect to such security at the time of the transaction, the expenses involved, and the fact the firm is entitled to a profit; and if the firm acts as agent for the customer in any such transaction, the firm will not charge the customer, more than a fair commission or service charge.

Section 5.3 -  REPORTING

The firm's market makers will report all volume and quotation information as designated by Schedule D in the NASD By-Laws.  This will include reporting of all volume, purchases and sales, no later than 5:00 PM Eastern Standard Time in the securities which it is a market maker.  If the firm conducts no transactions then a number of "O" will be reported for daily volume.  These  volume reports shall be entered via a NASDAQ terminal, in the case of equipment  malfunction or failure, volume reports shall be telephoned to the NASDAQ Operations-Members.

Regarding National Market System, securities in which the firm makes a market, the firm will report transactions through the Transaction Reporting System within 90 seconds of execution as required by Schedule G by the NASD By-Laws.

Regarding "Non-NASDAQ" securities, the firm will report on a daily basis at the end of the day all volume in principal transactions.  The firm will report in the case of the Non-NASDAQ securities through the reporting system, the highest price at which ft sold and the lowest price at which it was   purchased any non--NASDAQ security, the total volume of purchases and sales executed by ft in any Non-NASDAQ security, and whether these transactions were conducted with customers or other broker/dealers.  These reports will be as specific as described in Schedule H to the NASD By-Laws.

The firm will also report any information regarding its market making activities as the Association shall require. On a monthly basis the firm will report to the NASDAQ System such data on securities quoted in the NASDAQ System as the Association shall require.

Section 5.4 - REPORTING OF SHORT INTEREST

In accordance with ARTICLE III Section 41 in the NASD Rules of Fair Practice, the firm will report a total of "short" positions in all customer and proprietary firm accounts in securities included in the NASDAQ System and shall regularly report such information to the Corporation in such a manner as may be prescribed by the Corporation.  Reports shall be made as of the close on the settlement date falling on the 15th of each month, or, where the 15th is a non-settlement date, on the preceding settlement date.

Section 5.5 - HOURS OF BUSINESS

The firm's market makers will be open for business from 9:30 Eastern Standard Time and will close no earlier than 4:00 PM Eastern Standard Time.

Section 5.6 - CLEARING OF TRANSACTIONS

The firm will clear all transactions conducted as a market maker through Gourgem and Cheat, Inc., through which the firm operates under a fully disclosed basis.

Section 5.7 - CRITERIA FOR THE FIRM TO MAKE MARKETS

The firm will only make markets in securities, in which it believes there is a fundamental growth available and a reasonable profit could be made.  Generally ft will also consider securities in which its sales force is active in.  Currently the company plans to make markets in either National Market system Securities, or NASDAQ Securities or Non-NASDAQ Over the Counter Securities. 

The company will not make markets in the shares of designated securities, defined as a company with less than 2 Million dollars in Net Tangible Assets and a stock trading below $5.00.he decision in which securities to make a market in will be made by the trader, however his will be reviewed by the Management every quarter.

Section 5.8 - SHORT-SELLING

The firm will allow short-selling on securities, and will open margin accounts for such transactions.Currently the firm verifies through Its clearing agent, Gourgem and Cheat, Inc.  that the stock is available in its Stock Loan Department, allowing the short order to be placed.  Thus, each short transaction is reviewed by a registered principal at Fleecem and Howe.

Section 5.9 - LIMIT ORDERS

Regarding Limit Orders the firm will always execute customer orders over the firm's proprietary orders.

Section 5.10- LONG & SHORT TICKETS

All tickets executed and entered shall be marked as to whether the seller is long or short the stock.  If the sell is a short sell, the firm's procedures regarding such sales shall be implemented.

Section 5.11 - FREE RIDING

Under no circumstances does the firm allow free riding.  Such action will result in immediate action by the firm and could lead to termination.

Section 5.12 - DOCUMENTATION AND SEC RULE 211

The firm's trading activities will be the result of Its opinion as to the direction of the price of said security.This opinion will be the result of continued due diligence on the company.  The firm will maintain due-diligence files on all companies that A makes a market in, and will update these files as often as possible given the performance of the underlying company.

Section 5.13 - BEST EXECUTION COMPARISON

In executing orders from the Trading Department the firm will take the following procedures to try and insure the best execution possible for its clients.  This task will be handled via the video terminal of the NASDAQ System.  On this system all quotes from current Market Makers will be compared and the execution will take place at the best possible location.  In the event that a security is not listed on the NASDAQ System and information is not available via the video terminal the firm will contact at least 3 market makers to ascertain as to the best possible execution price.

Section 5.14 - PAYMENT FOR ORDER FLOW

Currently the company does not have a relationship in which ft is compensated for the direction of order flow.  Should the company in the future enter into such a relationship the necessary steps would be taken to inform its clients of such a relationship.

Section 5.15 - CURRENCY REPORTING

The firm does not allow the use of cash currency to settle securities transactions.

Section 5.16 - SOES SYSTEM PROCEDURES AND GUIDELINES

Merrill Goldman intends to make a market in National Market System Securities will also participate in the Small Order Execution System or SOES.  The firm recognizes the purpose of this system to aid in an efficient manner the execution of small orders by retail customers.   The firm will utilize this system for such transactions.To comply with NASD regulations the firm will do the following: The firm will not execute orders using the SOES system for professional traders.

When evaluating whether certain transactions are in compliance with the rules regulating SOES, with regards to size, the firm will undertake to decide if the transaction(s) are from one decision maker of the investment, either from a single account, or from numerous accounts with common control.The firm will not enter agency orders into SOES in which the firm currently is a market maker.

The firm will make all the necessary reporting requirements as set forth in the SOES System, which in general are the same as NMS Securities.  This will include reporting the trade, price and volume within 90 seconds of execution and daily volume to the appropriate market authorities.

SECTION 6 - UNDERWRITING PROCEDURES -

Section 6.1 - GUN JUMPING

When the firm participates in an underwriting, ft will not begin its marketing efforts until the appropriate registration statement has been filed.  Then during this 'Cooling Off' Period the firm will allow the dissemination of Preliminary Prospectuses "Red Herrings" to potential investors and will accept Indications of Interest.  However, in no way will the firm sell securities, or openly market this issue to the general public.  All information will be reviewed by a registered principal to ensure that all regulations are met.

Section 6.2 -    HOT ISSUES

A Hot issue is any offering that trades at an immediate premium in the after market.  The firm will not withhold any shares of a Hot Issue for:

  1. The Firms Accounts
  2. Officers, Directors, partners, employees or agents of a member.
  3. Immediate family of the above mentioned people.
  4. Anyone acting in a fiduciary manner regarding the offering.
  5. Officers of banks, insurance companies, or institutional accounts or their immediate families.

However, the firm may sell insubstantial amounts to the people mentioned above in Numbers (3),(4), and (5) if securities were sold in accordance to their normal investment practices.If the firm is the acting managing underwriter ft will take the responsibility to ensure that the above criteria and that compliance to regulations regarding Hot Issues are followed.

Section 6.3 -    HAIRCUT

Merrill Goldman will take a 30% haircut on securities positions realized through a firm commitment underwriting.  Upon entering into such an agreement the firm will take a 30% haircut on the entire position the firm will place less its selling concession.  The firm will maintain this haircut as long as any of these securities remain in Its inventory.

Section 6.4 - CHINESE WALL

Merrill Goldman has erected a "Chinese Wall" so that confidential and inside information received during Corporate Finance and Underwriting work will not be realized to its general sales force.  Any breach in this wall may result in termination with the firm or punishment.  The procedures to protect this information will be reviewed by Maria Nosegrabber, and Rufus Watchguard on a quarterly basis to ensure that the non-public information obtained by the firm will remain non-public.

SECTION 7 - MUNICIPAL SECURITIES -

Section 7.1 - MUNICIPAL SECURITIES RULEMAKING BOARD

The term "Board' shall mean Municipal Securities Rulemaking Board.

The annual fee will be paid to the Board by Merrill Goldman Corporation with respect to each fiscal year end of the Board in which the firm conducts a municipal securities business.  Such fee must be received at the office of the Board in Washington, D.C. no later than February 15th of the fiscal year for which the fee is being paid along with a written statement listing the name, address and SEC registration number (8-22805).

Section 7.2 - MUNICIPAL SECURITIES PRINCIPAL

Chip Vincent Claxton Overton IV is the qualified Municipal Securities Principal who will review the following:

  1. Each municipal security transaction
  2. Customer complaints involving municipal securities
  3. All correspondence regarding municipal securities

Section 7.3 - MSRB MANUAL

The firm will maintain a copy of the updated MSRB Manual and will also maintain the appropriate records on all Municipal Principals.

Section 7.4 - MUNICIPAL SECURITY - CUSTOMER COMPLAINTS

Merrill Goldman Corporation maintains an MSRB customer complaint file as part of its books and records. It is the firm's policy to respond quickly to written customer complaints and to maintain copies of such complaints along with the written response including all appropriate support documents as may be necessary.

Section 7.5 - INVESTOR BROCHURE

Pursuant to MSRB Rule G10, an investor brochure will be delivered to all customers that file complaints regarding Municipal Securities transactions.

Section 7.6 -   GENERAL

Municipal securities activity is subject to the guidelines outlined under Home Office records and Files.

SECTION 8 - OPTION & PROCEDURES -

Section 8.1 - OPTION PRINCIPALS

Einstein is the qualified/designated Compliance Registered Options Principal (CROP). 
Thelma Einstein is the Registered Options Principal (ROP) and Senior Registered Options Principal (SROP).  Notification of the firm's ROP, SROP and CROP has been filed with the NASD.

Section 8.2 - QUALIFICATIONS OF REPRESENTATIVES

Any Representatives having taken and passed the Series 7 examination since May, 1977 is qualified for both puts and calls. Any Representative having taken and passed the Series 7 examination prior to April, 1977 will provide proof of having taken an additional examination before engaging in put and call transactions.

Section 8.3 -   OPENING OF OPTION ACCOUNTS

1. No order from a customer will be accepted for an option transaction unless the customer's account has been approved for option trading by the CROP or designated Principal.

2. In approving a customer's account for option trading, due diligence will be exercised to ascertain the essential facts relative to the customer regarding his/her financial situation, investment history,investment objectives, accounts with other brokerage firms, and level of option trading.

3. The background and financial information upon which the customer's account has been approved for option trading shall be sent to the customer within fifteen (15) days after the date of approval for verification, if the information is not contained in the customer's account agreement.

4. The written options agreement shall be obtained from the customer within fifteen (1 5) days after the customer's account has been approved for option trading.

5. All option transaction will be approved by the SROP prior to entry, as designed by the CROP.

6. Before approving an investment partnership account for option trading a written document shall be obtained designating the person or persons authorized to sign each agreement on behalf of the partnership and that such authority specifically includes option trading.

Section 8.4 -     OTHER PROCEDURES

1. All order tickets will be initialed by ROP.

2. A periodic review of accounts having option transactions will be made by the ROP to determine if the Registered Representative is observing the suitability standards applicable to each of his/her customers, relative to recommended option trades.

3. Registered Representatives are prohibited from making unwarranted, exaggerated or false claims with respect to transactions in options.

4. Merrill Goldman Corporation will be responsible for delivery of an options prospectus/applicable booklets at or prior to the time an account is approved by option transactions.

Section 8.5 - SUITABILITY

1. Registered Representatives shall not recommend to any customer an option transaction unless the Representative has reasonable grounds to believe upon the basis of information furnished by the customer and after reasonable inquiring by the Representative that the recommended transaction is not unsuitable for the customer.

2. Registered Representatives shall not recommend to any customer an opening option transaction unless he has reasonable basis for believing that the customer has, at the time of the recommendation, such knowledge and experience in financial matters that he may be capable of evaluating the risk of the recommended transaction and is financially able to bear the risk of the recommended position.

Section 8.6 - MAINTENANCE OF RECORDS

1. A file will be maintained for all options related customer complaints and will contain all necessary information to conduct a thorough investigation of the complaint, regarding the Registered Representative, date the complaint was received and what action was taken (if necessary).

2. The firm will have option prospectus and/or applicable booklets concerning options for walk-in customers.

3. The firm will maintain the appropriate personnel records for option principals.

Section 8.7 -    EXERCISE ASSIGNMENT PROCEDURE

Merrill Goldman Corporation will follow the exercise assignment procedure prescribed by the clearing broker-dealer, which executes the transaction.

Section 8.8 - REGULATION T - OPTIONS

It is important that Registered Representatives become familiar with the basic concepts of Regulation T and Merrill Goldman Corporation's 'house" rules, and that Representatives advise their customers of applicable requirements before they enter into an options transaction.For purpose of Regulation T, exchange traded options have no loan value.  Although such options may be purchased either in a special cash account or in a margin account, full payment must be made within the time required by Regulation T, unless the account has available funds to cover the purchase.Full payment for exchange traded options purchased in a special cash account must be made promptly.

While Regulation T requires deposits of cash or securities to meet commitments for exchange trade options made in a margin account within five business days, R should be noted that settlement by clearing firms and the OCC are on a next-business-day basis.   The firm, thereof, must pay out cash for options purchased on behalf of a customer several days before the required deposit is due pursuant to Regulation T. This potential drain on the firm's cash ran be avoided by requiring a deposit from the customer earlier than the date mandated by Regulation T.

In compliance with amendments to Appendix E Article 111, section 33 of the NASD Rules of Fair Practice regarding uncovered option accounts, Merrill Goldman Corporation has the following policies and practices:

Section 8.9 -    APPROVAL OF UNCOVERED OPTION ACCOUNTS

Section 8.9a
The Compliance Registered Option Principal (CROP) or his/her designate shall carefully review the new account application and other applicable agreements/documentation for items stated in Appendix E 'Interpretation of the Board of Governors.' In general, a customer must have a minimum total net worth of $100,000 to $200,000 with a significant portion being liquid net worth.  In addition to net worth, the CROP or his/her designate shall pay special attention to customer's age, number of dependents, investment objectives, prior investment experience in securities including options, and anticipated amount of funds to be approved for options.

Section 8.9b -

All accounts shall be approved by the CROP or his/her designate prior to the entry of any uncovered option order.

Section 8.9c

The CROP, and in his/her absence the Senior Registered Options Principal (SROP)shall maintain written record of the reason(s) for the exception approval with each new account that is approved for uncovered options which does not meet Merrill Goldman set standards.

Section 8.9d

Merrill Goldman Corporation will impose the highest equity requirements for each account involved in uncovered options as set among its correspondence broker, regulation T, any option exchange, or any other regulatory agency that Merrill Goldman Corporation is subject to.

Section 8.9e -

Merrill Goldman Corporation requires all customers to execute and submit the "Special Statement for Uncovered Option Writers" letter before approving any account for uncovered options.  This document shall be maintained with the customer's new account application.

Section 8.10 - SUPERVISION OF UNCOVERED OPTION ACCOUNTS

Section 8.1Oa All orders marked "sell to open" shall be reviewed prior to entry by the SROP or his/her designate.

Section 8.10b
All uncovered option trades shall be reviewed the day after trade date by the SROP of his/her designate.

Section 8.10c
All uncovered options accounts shall be reviewed monthly by the CROP or his/her designate through review of customer monthly statements.

Section 8.1 1 RISK DISCLOSURE STATEMENTS

Within three days of a principal signing or initialing an account that will transact in options, a Risk Disclosure Statement will be sent to the customer explaining the risks regarding option trading.

SECTION 9 - SALES FORCE SUPERVISION -

It is the goal of Merrill Goldman Corporation in its efforts to supervise its sales force to maintain on average 10 registered representatives (Series 7) to each general securities principal (Series 24).  To accomplish this task, as well as to create and maintain an effective chain of communication and supervision the following will be undertaken.

Section 9.1 - Each Registered Representative with Merrill Goldman Corporation will be physically assigned a principal supervisor.  Within this capacity, the supervisor will maintain communication regarding compliance procedures and company information, as well as answering specific questions from the salespeople they supervise.  Ticket, and Account Information will still be processed by the Branch Wire Operator and assistant manager.  The branch manager, will still be held responsible for the overall supervision and compliance by the registered personnel at any branch office.

Section 9.2 - Due to the liquid nature of many of Merrill Goldman brokers, and the fluctuation as to the number of brokers at a specific branch, some supervisors may have more than 10 brokers while others at other branches may have less than 10 to supervise.  Although these fluctuations will vary month to month Merrill Goldman will strive to maintain on average a ratio of 10 brokers to 1 supervisor.

Section 9.3 - New procedures to aid in the expansion of the firm will include

certain requirements for supervisors (Series 24).

Section 9.3a - All Branch Managers will continue to be supervisors.

Section 9.3b - All Assistant Branch Manager will be supervisors.

Section 9.3c - All school instructors will be supervisors.

Section 9.3d - Any brokers participating in the New Mentor Program will be

supervisors.

It is believed that implementing these new procedures will create a strong communication and supervision link between the supervisors of Cheatem's and Fleecem's sales force.  Continued expansion will include these new procedures as well as the maintenance of the 10 to I ratio. Expansion will not be undertaken until such communication and managerial structures are in place.

Section 9.4 - A physical list of which sales people are supervised by which principals will be required and kept in the home office, by the registered compliance officer, as well as at each branch off ice.

Section 9.5 - Any misbehavior or problems will be referred by the direct supervisor to the branch manager.  The branch manager will then report to the registered compliance officer, who will in turn issue instructions.

APPENDIX I
OPTION STRATEGIES AND CUSTOMER POLICIES
SECTION 1 - FIRM POLICIES -

This section is designed to inform brokers that plan on conducting Option transactions with customers on firm policies and well as suggest guidelines in dealing with customers.It should be noted that although their are various option strategies are available, Merrill Goldman Corporation does not intend to transact in risky or speculative option strategies

Section 1.1 - CLIENT TRADING ACCOUNTS:

To conduct option transactions with Merrill Goldman Corporation the client must have trading account with Fleecem and Howe.

Section 1.2 - CLIENT RECOMMENDATIONS:

It is the responsibility of the Registered Representative to introduce option strategy only that is compatible with the clients stated objectives.  Discussion should be conducted with each client to be sure he/she understands both the potential risk and reward.

Section 1.3 - PERCENTAGE OF TOTAL INVESTMENTS IN OPTIONS

It is the responsibility of the Registered Representative to set a conservative maximum percentage of any clients trading funds to be used for option speculation.

Section 1.4 - OPTION DISCLOSURE DOCUMENT

It is the responsibility of the broker to confirm and/or send option agreement and OCC disclosure document together and to have a signed option agreement on file before any option trades take place.

Section 1.5 - STOCK TRANSACTIONS VERSUS OPTION POSITIONS

Each broker is required to cross check stock transactions with the clients open option positions.

Section 1.6 - SUGGESTED TRANSACTIONS

Merrill Goldman Corporation limits option transactions to:Short Covered calls and short covered spreads.  Alternatively, on the long side the client may purchase calls and/or puts.

Section 1.7 - NAKED OPTIONS

Naked options are not available at Merrill Goldman Corporation.These outlines and suggestions are subject to periodic review by the firms Compliance Registered Options Principal (CROP) and failure to comply with these policies may result in discipline and or termination.For more information or specific questions regarding firm option policies and particular circumstances contact either your branch manager or the firms CROP.

BASIC OPTION STRATEGIES

LONG CALLS
Hedge Position - (Bear Position)
Long Calls, Short Stock (Assume short stock sale & strike price identical)
Purpose: Protection from an upward movement of the underlying stock
Risk Reward
100% of premium Short sales-price minus premium
Speculative Position - (Bull Position)
Long Calls
Purpose: Strictly Speculation
Risk Reward
100% of premium Unlimited

SHORT CALLS -
Neutral Position
Short Calls, Long Stock
Purpose: Generate Revenue
Risk Reward
Opportunity Loss Premium Only
Speculative Position
Short Calls
Naked or Uncovered - NOT AVAILABLE
Use Long Puts as alternative

LONG PUTS -
Hedge Position - (Bull Position)
Long Puts, Long Stock (assume stock cost & strike price are identical
Purpose: Protection an downward movement of stock
Risk Reward
100% of premium Unlimited
Speculative Position - (Bear Position)
Long Puts
Purpose: Strictly Speculative
Risk Reward
100% of premium Strike minus Premium -

SHORT PUTS
Neutral Position
Short Puts, Short Stock (assume short stock sale & strike price identical
Purpose: Generate Revenue
Risk/Reward
100% of premium = Strike minus Premium
Speculative Position - (Bull Position)
Short Puts
Naked or Uncovered - NOT AVAILABLE
Use Long Calls as alternative

APPENDIX 11
FLEECEM AND HOWE SECURITIES CORPORATION
BRANCH OFFICES


339 Wall Street, Suite 948
New York, New York 10294
Telephone: (212) 997-8343
Facsimile: (212)-997-8344

        Dated: November 2, 1998

This manual is to illustrate and give guidelines as to how branch offices are to run, what minimum requirements and criteria are, as well as general descriptions for office personnel.These guidelines are just that.  Branch managers hold the right to alter or adjust these policies or guidelines as long as they do not interfere with the firm's compliance and written supervisory procedures.

SECTION I    BRANCH OFFICE RESPONSIBILITIES

Section 1.1 BRANCH OFFICE HOURS

Merrill Goldman Corporation requires that branch offices be open for business from 9:30 a.m. Eastern Standard Time to 4:00 p.m. Eastern Standard Time.  In general, branch offices should be open later in the evening to allow both full-time and part-time brokers access to branch resources and well as for client meetings.During market hours, a Series 24, dully appointed by the branch manager must be present.

Section 1.2 - SUPERVISION OF REGISTERED PERSONNEL

The branch office is a designated OSJ (Office of Supervisory Jurisdiction) therefore a procedure must be established to maintain a system of supervision.  These policies should be designed to monitor the activities of each registered representative and associated person and therefore try to achieve compliance to applicable securities laws, and firm procedures and policies.

Section 1.3 - NASD MANUAL

Each OSJ must maintain at least two (2) copies of the NASD Manual, and make them readily accessible to associated personnel of Merrill Goldman Corporation.

Section 1.4  MERRILL GOLDMAN SECURITIES CORPORATION -WRITTEN SUPERVISORY PROCEDURES

Each OSJ will be required to maintain at least one edition of the most recent version of the firm's written supervisory procedures.  These WSP's must be accessible to all registered personnel.

Section 1.5 - TRADE TICKETS

All trade tickets must be reviewed by the branch manager at the end of business each day.  A binder should be kept with tickets for each production month.Tickets must be reviewed with at least an initial on the first and last ticket for each trade period.

Section 1.6 -MAIL PROCEDURES

Mail must be opened by a designated person appointed by the branch manager.  Mail must be opened in a secure area and reviewed for any monies, securities, and or letters of complaint.  The mail should then be disseminated to the appropriate personnel.

Section 1.7 - NEW ACCOUNTS

New accounts must be reviewed and approved by the branch manager and/or designated person.  Upon approval, the accounts would be opened in the SIS System.   A new account number will be assigned and the account would then be officially opened.The application must be completed and signed by the branch manager and then forwarded to the corporate offices.  The back (cardboard like) copy should be torn and given to the broker .  It is suggested that copies be made of all customer accounts, W-9's and Margin Agreements before being forwarded to corporate.If the application is not completed correctly, it will be returned to the branch office for correction.

Section 1.8 - PLACING ORDERS

All orders will be placed by the appointed personnel by the branch managers directly to trading.The ticket should be stamped numerically and time stamped.   Upon giving the order it will be read back to confirm.  If this is correct the order will be placed (a drop copy will be printed in the branch office). A comparison to the order and the drop copy should be conducted immediately to confirm that no mistakes have been made.Execution will automatically print in the branch office, at which time the tickets should be appropriately checked and a copy distributed to the broker of record.Foreign stocks, Mutual Funds and Bond orders will receive a telephone execution.

Section 1.9 - REGULATION T EXTENSIONS

If an extension is required for a customer account, a wire will be received explaining the amount due, the customer account, broker number and date of expiration.  A wire must be received back to trading by 4:00 p.m. Eastern Standard Time giving the information to proceed. (i.e. Please Grant an Extension, or Extension is not needed.)If a wire is not received, an extension will automatically be sought and charged to the broker of record.

Section 1.10 - CANCEL & REBILLS

If for some reason an error took, place in a trade a Cancel & Rebill form would be completed and faxed to Trading.  If in 3 days the correction had not been made, daily wires to trading should be done until completed.

Section 1.1 1 -ACCOUNT INSTRUCTIONS

Account instructions should be completed by each broker and forwarded to the appropriate person in each branch office.  These instructions should then either be wired or faxed to corporate.  If the instructions have not been completed in 3 days, daily wires to trading should be done until completed.

Section 1.12 - SELECTNET TRADES

To place a SELECTNET trade each broker should call their assigned trader (by branch office) to instruct and place the trade.  To place the order, a limit, branch and broker number must be received.  If execution occurs, a wire would be sent to the wire operator "stating the shares were bought at the execution price and waiting for ticket".If the execution report does not occur in 10 minutes, it should be assumed that the order did not execute.  It is not the responsibility of the trader to inform the broker that the order did not execute.An order should then be placed by the wire operator to execute a trade "from inventory" indicating that this trade is now completed.  An execution report to the customer account would then follow.

Section 1.13 - MUTUAL FUND TRANSACTIONS

Any mutual fund transaction called into trading will be executed on the next business day.  Telephone execution will be received by the branch office.After execution a mutual fund letter must be completed by the broker of record and either faxed or pouched to corporate.It is suggested that a copy be maintained for branch records.

Section 1.14 - MARGIN AGREEMENTS

Margin Agreements must be completed in full.  Upon completion the document would be forwarded to corporate for correspondent approval.  In general it should take 3 to 4 days for margin approval.  To expedite this process the margin agreement may be faxed for approval.  However, this should be an exception.It is suggested that a copy be maintained for branch records.

Section 1.15 - OPTION AGREEMENTS

Option Agreements must be completed in full.  Upon completion and signed by the broker it should be forwarded to corporate for ROP approval.  In general it should take 7 to 10 days for option approval.  To expedite this process the option agreement may be faxed for approval.  However, this should be an exception.It is possible to utilize the same agreement for Margin & Option approval.

Section 1. 1 6 - IRA APPLICATIONS

Completed IRA Application should be forwarded to corporate.   Any checks for application fees should also be included.It is suggested that a copy be maintained for branch records.

SECTION 2 - TRANSMITTALS AND REPORTS

Merrill Goldman requires full documentation on the transmittal of all paperwork, securities, and monies.  In addition, Merrill Goldman Corporation will provide both the branch and brokers with various reports for their benefit.If for any reason, paperwork, checks, or securities are not reflected in the account in 3 days an immediate call should be made to cashiering to confirm the receipt of the documents and the current status. All documents sent to corporate should be stamped with the branch number in a strong color (such as Red or Green) to ease the processing of paperwork.

Section 2.1 - CASH TRANSMITTALS

To document the sending of checks, a cash transmittal must be completed in full.  This would include, the branch, prepares the customer account number, name and the amount for the check.  Upon completion the pink copy would be kept for branch records, while the original and checks would be pouched to corporate.It is suggested that copies of all checks transmitted be kept until deposited in the customer's account. 

Section 2.2 - SECURITIES TRANSMITTALS

To document the sending of securities, a securities transmittal must be completed in full.  This would include branch, prepares the customers name, account number the security description, CUSIP number, and certificate number.  Upon completion the pink copy would be kept for branch records, while the original and securities would be pouched to corporate.It is suggested that copies of all securities transmitted be kept until deposited in the customer's account. 

Section 2.3 - DOCUMENT TRANSMITTALS

To document the sending of documents, a document transmittal must be completed in full.  This would include branch, prepares the customer name, account number and the document being sent.  Upon completion the pink copy would be kept for branch records, while originals and documents would be pouched to corporate.It is suggested that copies of all paperwork be kept and maintained in a branch account file.

Section 2.4 - MONEYLINE REPORTS

Moneyline reports, per broker are printed every Monday, Wednesday and Friday and pouched out to the branch office.  These reports give a report to the broker on each account with a current position, such as current market value, debits and free cash.Upon receipt of the Moneyline reports, they should be distributed to the appropriate broker.
There is no need to copy or maintain a record on behalf of the branch.

Section 2.5 -   A/E BLOTTERS

A/E Blotters by branch and broker number will be received for brokers with activity.  These reports show the customer and transaction as well as the gross commission generated.These reports upon receipt should be distributed to each broker.   It is suggested that a copy be maintained by the branch manager as an overview for broker activity and business production.

Section 2.6 - WEEKLY REPORTS

Each branch office will receive weekly reports from corporate.   These reports are designed to keep managers informed of brokers and customer accounts.

Section 2.6(a) - BROKER REPORT

Each week a report will be generated showing brokers at each branch office.  This will include work status, (i.e.  full-time or part-time) and broker number.

Section 2.6(b) - PART-TIME MAILING

Brokers that desire to have their information mailed to them bi-weekly will code their file as "part-time".  The branch will receive a weekly report of those brokers coded part-time.  Unless informed otherwise all brokers will be coded part-time,

Section 2.6(c) - CONFIRM LIST

A list will be generated for all brokers that require a confirmation call upon execution of an order.  This list will reflect those brokers that desire a call as well as the designated phone number for contact.Broker files should be coded Y for "Yes on Confirmation", N for "No Confirmation" and D for "Don't Know".  All broker files are D (Don't Know) until notified otherwise.

Section 2.6(d) - DON'T KNOW LIST

This report is generated to reflect those broker files that reflect a D for Don't Know.  This generally indicates that the broker information form has never been received by corporate.

Section 2.7 - CUSTOMER ACCOUNTS

This report shows all customer accounts opened in the Merrill Goldman customer account database.  Sorted by broker number, this report indicates accounts opened.   Should a customer account not reflect on this report, it indicates one of two things.

1 . The account has been opened in the branch in SIS, but the paperwork has not yet been received and entered into the Nosegrabber Account database.

2. There is a problem.  The account has not been input, or the account was opened under the wrong branch number, or was not transferred properly.  A follow up call or wire should be placed to follow up.It is suggested that before action is taken, the branch should wait for another Customer Account Report to see if the problems have been resolved or if the account has since been input.

Section 2.8 - MONTHLY REPORTS

Each branch will also receive reports once a month, informing the branch of various information.

Section 2.8(a) - BROKER STATE REGISTRATION

Once a month reports for all brokers will be Generated reflecting all states that Merrill Goldman currently shows them to be registered in.  Should their be a conflict or problem a call should be placed to trading.

These reports upon receipt should be given to each broker.

Section 2.8(b) - NO NEW BROKER ORIENTATION ATTENDANCE

Merrill Goldman Corporation requires all registered personnel to attend a New Broker Orientation.  On a monthly basis a report will be sent showing all brokers by branch that have not attended a NBO.

Section 2.8(c) - NO ICA AGREEMENT

Merrill Goldman Corporation requires a completed Independent Contractors Agreement. On a monthly basis a report will be sent showing all brokers by branch that have not completed an ICA.

SECTION 3 - DISSEMINATION OF INFORMATION AND BRANCH MEETINGS

Although each branch may differ, the dissemination of information to brokers is vital.  Given the many part-time brokers at Merrill Goldman Corporation this becomes even more crucial.  It is mandatory that branch offices offer certain meetings and information while others are just suggestions.

Section 3.1 - WEEKLY BRANCH MEETING

Each branch should hold a weekly broker meeting to explain firm and branch procedures as well as current projects and business development programs.

Section 3.2 - MONTHLY PART-TIME MEETING

Each branch will be required to hold a part-time broker meeting at least once a month. This meeting should be held in the evening to allow working brokers to attend.  Again branch information procedures and projects should be covered.

Section 3.3 - PART-TIME BROKER MAILINGS

For those brokers files coded part-time a bi-weekly mailing of information will take place. This takes place every second Friday. On Thursday, before the mailing, labels for each part-time broker will be sent to the branch office to facilitate this mailing.

Section 3.4 - CONFIRMATION CALLS

It is vital that part-time brokers receive calls upon order execution if they so desire. To this end, broker files must be coded "Y" for confirmation calls. Should an order execute for such a broker a call should immediately be made to the confirmation number.If that number is not answered, it is NOT the responsibility of the branch to track down the broker.  That number can be changed by the broker should they so desire.

Section 3.5 - BRANCH NEWSLETTERS

It is suggested that a monthly branch newsletter explaining current projects, procedures and meetings be sent out to all part-time brokers.

Section 3.6 - STATE REGISTRATIONS

The branch should inform brokers of all states that Merrill Goldman Corporation is registered and how each broker can register in a state.A monthly report will be received by each branch reflecting states that Merrill Goldman Corporation is registered in.

SECTION 4 - MAINTENANCE OF RECORDS

Each branch is required to maintain certain information relating to customer accounts and brokers.  To this end, the following procedures have been implemented.

Section 4.1 - BROKER INFORMATION SHEETS

Upon a new broker joining a branch, a broker information sheet should be completed giving pertinent information.  A copy of this sheet should be forwarded to corporate to update the computer file on the broker.  The original should be held by the branch and kept current.It should be noted that upon update of the computer file, corporate will discard the information sheet.  Thus, it is important that the original be kept at the office.

Section 4. - ADVERTISING

A separate file of all advertisements should be kept by the branch.   Each advertisement should be initialed and dated by the branch manager.

Section 4.3 - COMPLAINTS

A separate file of all complaints should be kept by the branch.   In the event of a complaint being received please consult the firms Written Supervisory Procedures.

Section 4.4 - CUSTOMER ACCOUNTS

Although all original and official files for customer accounts are kept at corporate, it is strongly suggested that each branch maintain its own files.  These files would hold copies of new account applications, W-9's, margin agreements, etc.,Duplicate 3 x 5 cards will also be sent to the branch.  One should be given to the broker of record.  The other should be held by the branch.As new cards are received, the existing card should be discarded.

SECTION 5 - BRANCH MANAGEMENT & PERSONNEL

Although the staffing of branches may differ, certain procedures and responsibilities will always be present.  The below descriptions explain job function and responsibilities.

Section 5.1 - BRANCH MANAGER

A manager's first responsibility is the overall supervision of all aspects and functions of the office by ensuring that branch operations are in full compliance with all regulatory bodies and MSC Corporate objectives.

Section 5.1(a) - REVIEW OF TRANSACTIONS AND NEW ACCOUNTS

The branch manager is responsible to review all transactions and new accounts.  In the event that the manager does not conduct these functions, an appointed person must be stated.

Section 5.2 - ASSISTANT MANGER

The Assistant Manager is, in essence, the Manager's right hand person.  He/She should at any given time,be able to take over the functions of an office without there being a gap to bridge.  Therefore, the requirements for an Assistant Manager are as rigid as for the Manager.

Section 5.2(a) -COMPLIANCE ASSISTANCE

It is the Assistant Manager's job to be available to do whatever is necessary for the Manager to be sure his office is in total compliance.

Section 5.3 - WIRE OPERATOR

The wire operator is designed to disseminate information to brokers, as well as place and execute orders on behalf of the branch.  To this end, the wire operator must be in the office no later than 9:15 Eastern Standard Time.The wire operator will also be responsible for logging paperwork, checks and securities and pouching them to corporate.  In essence, the wire operator will be the main communication point between the branch and trading.  All telephone conversations and wire communications should be kept private and/or confidential.The wire operator must have a fingerprint card on file at the corporate offices of Merrill Goldman Corporation.

Section 5.3(a) -DISSEMINATION OF INFORMATION

The wire operator will be responsible for disbursing broker reports and information coming from corporate.
Upon execution the trade ticket should be noted and given to the broker of record.  If a part-time broker, a confirmation call should be placed depending on the broker file code.

Section 5.3(b) -NEW ACCOUNTS

The wire operator will also be responsible to open new accounts directly into the SIS system.  Thus they must be familiar with SIS, as well as the necessary paperwork to open a customer account.

Section 5.3(c) - ORDER DESK

The order desk will be kept in a clean and orderly fashion.   The number stamp will be reset every day, as well as accurate date and time on the time stamp.   Tickets shall be kept well stocked as well as a rack for open day and good till cancel orders.

Section 5.4(d) - BRANCH RECORDS AND FILES

It will also be the responsibility of the wire operator to maintain the branch files on brokers and customers.

Section 5.5 - RECEPTIONIST

The main responsibility of the receptionist is to answer incoming telephone calls.  However, the receptionist may be utilized as a support person for the office.All telephone calls must be answered, "Merrill Goldman Corporation".  All messages shall be filed or processed according to branch procedures,

THE REGULATORS

For your convenience we have included a list of State Securities Offices. I you feel that you have a problem with your broker, these may be the people to call.

State Securities Regulators

ALABAMA
RSA Plaza
Alabama Securities Commission
770 Washington Ave., Suite 570
Montgomery, AL 36130-4700
FedEx Zip: 36104
(334) 242-2984 or (800) 222-1253

ALASKA
Division of Banking & Securities
State Office Building
9th Floor
333 Willoughby Avenue
Juneau, AK 99801
Mailing address:
P.O. Box 110807
Juneau, AK 99811-0807
(907) 465-2521

ARIZONA
Arizona Corporation Commission
1300 West Washington St., 3rd Floor
Phoenix, AZ 85007
(602) 542-4242

ARKANSAS
Arkansas Securities Department
Heritage West Building
201 East Markham, 3rd Floor
Little Rock, AR 72201
(501) 324-9260

CALIFORNIA
Department of Corporations
980 9th Street, Suite 500
Sacramento, CA 95814
(916) 445-3062

COLORADO
Division of Securities
1580 Lincoln St., Suite 420
Denver, CO 80203-1506
(303) 894-2320

CONNECTICUT
Department of Banking
260 Constitution Plaza
Hartford, CT 06103-1800
(860) 240-8299

DELAWARE
Delaware Division of Securities
Carvel State Office Building
820 North French St., 8th Floor
Wilmington, DE 19801
(302) 577-8424

DISTRICT OF COLUMBIA
Securities Bureau of the District of Columbia
441 - 4th Street, Suite 870 North
Washington, D.C. 20001
Mailing address:
P.O. Box 37378
Washington, DC 20001
(202) 727-8000 x 30721
(202) 727-3351

FLORIDA
Division of Securities
101 East Gaines Street
Tallahassee, FL 32399-0350
(850) 488-9530

GEORGIA
Securities and Business Regulation Division
802 West Tower, Suite 802
2 Martin Luther King Jr. Dr., SE
Atlanta, GA 30334
(404) 656-3920

HAWAII
Hawaii Corporate & Securities Commission
1010 Richards St., 2nd Floor
Honolulu, HI 96813
Mailing address:
P.O. Box 40
Honolulu, HI 96810
(808) 586-2730

IDAHO
Idaho Securities Bureau
700 West State St., 2nd Floor
Boise, ID 83720
Mailing address:
P.O. Box 83720
Boise, ID 83720-0031
(208) 332-8004

ILLINOIS
Illinois Securities Department
Lincoln Tower
Suite 200
520 South Second St.
Springfield, IL 62701
(217) 782-2256

INDIANA
Securities Division
302 West Washington St.
Room E-111
Indianapolis, IN 46204
(317) 232-6688

IOWA
Securities Division
340 East Maple Street
Des Moines, IA 50319
(515) 281-4441

KANSAS
Kansas Securities Commission
618 S. Kansas Ave., 2nd Floor
Topeka, KS 66603-3804
(785) 296-3307

KENTUCKY
Kentucky Department of Financial Institutions
477 Versailles Rd.
Frankfort, KY 40601
(502) 573-3390

LOUISIANA
Louisiana Securities Commission
3445 N. Causeway, Suite 509
Metairie, LA 70002
(504) 846-6970

MAINE
Maine Securities Division
121 State House Station
Augusta, ME 04333-0121
(207) 624-8551

MARYLAND
Maryland Division of Securities
200 St. Paul Place, 20th Floor
Baltimore, MD 21202-2020
(410) 576-6360

MASSACHUSETTS
Massachusetts Securities Division
John W. McCormack Building
One Ashburton Place, Room 1719
Boston, MA 02108
(617) 727-3548

MICHIGAN
Michigan Corporation & Securities Bureau
6546 Mercantile Way
Lansing, Ml 48910
Mailing address:
P.O. Box 30222
Lansing, MI 48909
(517) 334-6215

MINNESOTA
Department of Commerce
133 East Seventh St., 2nd Floor
St. Paul, MN 55101
(612) 296-2283

MISSISSIPPI
Securities Division
202 N. Congress St.
Suite 601
Jackson, MS 39205
P.O. Box 136
Jackson, MS 39205
(601) 359-6371

MISSOURI
Securities Division
Missouri State Information Center
600 West Main St., 2nd Floor
P.O. Box 1276
Jefferson City, MO 65101
(573) 751-2302

MONTANA
Montana Securities Department
126 North Sanders St., Room 270
Helena, MT 59620
Mailing address:
P. O. Box 4009
Helena, MT 59604-4009
(406) 444-2040

NEBRASKA
Nebraska Securities Bureau
Department of Banking & Finance
1200 North St., Suite 311
Lincoln, NE 68508
Mailing address:
P.O. Box 95006
Lincoln, NE 68509-5006
(402) 471-3445

NEVADA
Nevada Securities
555 E. Washington Ave., Suite 5200
Las Vegas, NV 89101
(702) 486-2440

NEW HAMPSHIRE
Bureau of Securities Regulation
State House, Room 204
107 North Main St.
Concord, NH 03301-4989
(603) 271-1463

NEW JERSEY
Bureau of Securities
Gibraltar Building
153 Halsey St., 6th Floor
Newark, NJ 07102
Mailing address:
P.O. Box 47029
Newark, NJ 07101
(973) 504-3600

NEW MEXICO
New Mexico Securities Division
725 St. Michaels Dr.
Sante Fe, NM 87505-7605
Mailing address:
P.O. Box 25101
Santa Fe, NM 87501
(505) 827-7140

NEW YORK
New York Bureau of Investment
Protection and Securities
120 Broadway
23rd Floor
New York, NY 10271
(212) 416-8222

NORTH CAROLINA
North Carolina Securities Division
300 North Salisbury St., Room 302
Raleigh, NC 27603-5909
(919) 733-3924

NORTH DAKOTA
North Dakota Securities Commissioners' Office
State Capitol Building, 5th Floor
600 East Boulevard Ave.
Bismarck, ND 58505-0510
(701) 328-2910

OHIO
Ohio Division of Securities
77 South High St., 22nd Floor
Columbus, OH 43215
(614) 644-7465

OKLAHOMA
Oklahoma Department of Securities
First National Center
120 North Robinson, Suite 860
Oklahoma City, OK 73102
(405) 280-7700

OREGON
Oregon Securities Commission
Department of Insurance & Finance
21 Labor & Industries Building
Salem, OR 93710
(503) 378-4387

PENNSYLVANIA
Pennsylvania Securities Commission
Eastgate Office Building
1010 N. 7th St., 2nd Floor
Harrisburg, PA 17102-1410
(717) 787-5675

PUERTO RICO
Commissioner of Financial Institutions
Centro Europa Building
1492 Ponce De Leon Ave., Suite 600
San Juan, PR 00907-4127
(787) 723-3131

RHODE ISLAND
Department of Business Regulation
233 Richmond St., Suite 232
Providence, Rl 02903-4232
(401) 277-3048

SOUTH CAROLINA
Office of the Attorney General
Securities Section
Rembert C. Dennis Office Building
1000 Assembly St.
Columbia, SC 29202
Mailing address:
P.O Box 11549
Columbia, SC 29211-1549
(803) 734-9916

SOUTH DAKOTA
Division of Securities
118 W. Capitol Ave.
Pierre, SD 57501-2017
(605) 773-4013

TENNESSEE
Tennessee Securities Division
Volunteer Plaza, Suite 680
500 James Robertson Parkway, Suite 680
Nashville, TN 37243-0583
(615) 741-5905

TEXAS
State Securities Board
200 East 10th St., 5th Floor
Austin, TX 78701
Mailing address:
P.O. Box 13167
Austin, TX 78711-3167
(512) 305-8300

UTAH
Securities Division
Herber M. Wells Building
160 East 300 South, 2nd Floor
Salt Lake City, UT 84111
Mailing address:
P.O. Box 146760
Salt Lake City, UT 84114-6760
(801) 530-6600

VERMONT
Department of Banking, Insurance, Securities &
Health Care Administration
Securities Division
89 Main St., Drawer 20
Montpelier, VT 05620-3101
FedEx/Courier:
89 Main Street, 2nd Floor
Montpelier, VT 05620
(802) 828-3301

VIRGINIA
Virginia Division of Securities
1300 E. Main Street
Richmond, VA 23209
Mailing Address:
P.O. Box 1197
Richmond, VA 23218
(804) 371-9051

WASHINGTON
Department of Financial Institutions
Securities Division
General Administration Building
210 11th Avenue, SW
3rd Floor West, Room 300
Olympia, WA 98504
Mailing address:
P.O. Box 9033
Olympia, WA 98507-9033
(360) 902-8760

WEST VIRGINIA
West Virginia Securities Division
State Capitol Building
1900 Kanawha Blvd., East
Room 118 West
Charleston, WV 25305
(304) 558-2257/2258

WISCONSIN
Division of Securities
345 W. Washington Ave.
Madison, Wl 53703
Mailing address:
P.O. Box 1768
Madison, WI 53701-1768
(608) 266-3431

WYOMING
Securities Division
Secretary of State
24th Street & State Capitol Avenue
Cheyenne, WY 82002-0020
(307) 777-7370

We are available for a consultation at your convenience.  If you have read all of the above you are now not only the smartest person on your block but you are also ready to take the registered-rep exam. Welcome to Wall Street!

Well, it turns out that your broker lost all of your money but didn't violate any of the "Blue Sky Regulations" (State Securities Laws)and you are still burning mad. There must be something that you can do. Well this might just be it!

SECURITIES AND EXCHANGE COMMISSION

(If you have a complaint or question about your investments)

Electronic mail:
help@sec.gov

This mailbox may be used to contact the SEC's Office of Investor Education and Assistance. While we encourage inquiries from the public via Internet e-mail, remember that your e-mail is not confidential, and others may intercept and read your e-mail. If you are comfortable in doing so, we ask that you provide your name, postal address, e-mail address, and a daytime telephone number where you can be reached easily. We will make every effort to respond to your inquiry quickly and completely by e-mail, telephone, or letter.

If you have a complaint about your broker or an unfair

sales practice, you may want to preserve the

confidentiality of your communication by sending us a

written letter. We discourage sending your account

numbers and account statements to us via e- mail.

Please address your letter to:

Office of Investor Education and Assistance,
Securities and Exchange Commission,
450 Fifth Street,
N.W., Washington, D.C. 20549.

Fax: 202-942-9634
Telephone: 202-942-7040

Mail:
Office of Investor Education and Assistance
U.S. Securities and Exchange Commission
Mail Stop 2-13
450 Fifth Street, N.W.
Washington, DC 20549
 

We are available for a consultation at your convenience.  If you have read all of the above you are now not only the smartest person on your block but you are also ready to take the registered rep exam. Welcome to Wall Street!

Chapman Spira and Carson is pleased to announce the formation of our office in Memphis Tennessee, headed by Donald R. Lafferty. Don makes a welcome addition to the Chapman Staff and brings to the table much sought after talents.

The office is located at:

6898 HICKORY LAKE COVE
MEMPHIS, TENNESSEE 38119

Don has a diversified background and has managed problems in almost every arena in business including but not limited to acquisitions mergers and reorganizations. His outstanding reputation and knowledge give the Chapman firm an outstanding presence in the Southern United States where so many of our transactions imitate. We have enclosed a short sketch of Don's background for your perusal and know that has extraordinary talents would be extremely valuable to our entire client base.

Don upon graduation from Kent State University in March of 1964 and began his business career with Arthur Andersen & Co. in Cleveland, Ohio where he soon became a tax partner. Don transferred to the Newark, NJ/ New York office in 1970, to the Dayton/Cincinnati, Ohio office in 1978 and to the Memphis, Tennessee office in 1980. Don resigned from Arthur Andersen & Co. in 1986 to start his own financial consulting business. Don on occasion has accepted full or part time employment with his consulting clients and took on the responsibilities of Chief Executive Office, Chief Financial Officer, Treasurer, and Board member of at various times.

Business experience during his twenty-two-year career with Arthur Andersen & Co., and twelve years of consulting.

A. Exposure to practically every type of business enterprise that has provided either a basic or in-depth understanding of many industries and their problems.

B. Clients ranged from international New York Stock Exchange companies to small closely held local businesses and their owners and executives.

C. Industries where he has substantial experience include banking, hospital supply companies, light and heavy manufacturing, real estate development, chemical companies, retail stores and catalogs, extractive industries including oil, gas, precious metals and coal, hotel companies, franchise owners, leasing companies, wholesale businesses, insurance companies, publishers, real estate brokerage, automobile dealerships, restaurants, and service businesses.

D. Familiar with financial, tax and accounting peculiarities of most businesses.

E. Worked with every form of business organization including "C" corporations, "S" corporations, limited and general partnerships, limited liability companies, tax exempt organizations, sole proprietorships, and joint ventures.

F. Practical experience:

1. Personal Computer experience including Excel, Word, Lotus,   Peachtree, and Quick Books.

2. Preparation of detailed and abbreviated business plans

3. Preparation of Small Business Administration and Farmers  Home Loan Bank loan applications

4. Bank loan application packages

5. Preparation of Private Placement Memorandums

6. Preparation of Securities and Exchange Commission Filings

7. Preparation of projections of income, cash flow, break even analysis, and balance sheets.

8. Preparation of excel spread sheets to analyze complex accounting and financial transactions

9. Working with a business through Chapter 11 bankruptcy

10. Meetings with bankers, investment advisors, venture capitalists, investment bankers, attorneys to present investment/loan packages.

G. Significant training and experience in being able to quickly identify business problem, planning opportunities, and if something does not pass the "smell test".

Don’s business experience and career have provided him with the ability to come into almost any business situation and not have to learn about the business. He can walk into a business and deal with the funding issue and not have to waste a lot of time trying to understand the economics and dynamics of the business.

Don also has substantial experience working for business as an officer or consultant in raising equity capital and/or borrowing. He is familiar with the trials and tribulations associated with trying to obtain the capital necessary to make a business and a dream successful.

  


©2005 Chapman, Spira & Carson, LLC
111 Broadway. New York, NY. 10006 Tel: 212.425.6100 - Fax: 212.425.6229

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