November 23, 1973, A physical recovery of fifty shares of Consolidated Airborne Systems, common stock, valued at $150.00 and reported as a mail loss, was made for Reynolds Securities, a subscribing SVS brokerage firm.

November 26, 1973, A request for inquiry and confirmation was made by a private investigator, Toronto, Canada, acting as a third party in the sale of land, to be obtained by the sale of securities. The securities negotiated in the transaction included 2000 shares of Chemical Bank of New York, 300 Polaroid, 2700 Georgia Pacific Corporation and 3000 Addressograph, Multigraph common and preferred stock, valued at the current price of $245,000.00. The response of the reported "stopped" securities was immediately provided by SVS personnel to the Director, Intelligence Crime Section of the Toronto Stock Exchange. The origin of the securities being negotiated were reportedly coming from Nassau, Bahamas, and were registered in various names but properly endorsed. The entire case has been presented to the Royal Canadian Police for apprehension and criminal prosecution purposes.

November 26, 1973, Information supplied by the Illinois Bureau of Investigation, to the U.S. Postal Authorities of Chicago, Illinois, was presented for inquiry and confirmation of the SVS data base. The securities information represented 200 American Tobacco, 40 Castleton Industries, 50 Chrysler Corporation, 50 Guedon Industries, 53 Lehigh Portland Cement, 200 N.L. Industries, 268 American Smelting & Refining Company, 124 Consolidated Edison Company, common stock shares, in addition to a $5,000.00 GAC Properties and 6 warrants of ATT, valued at the current market price of $25,055.00. The securties were confirmed as the total portion stolen in the mail, enroute from Jacksonville, Florida to New York City, from the SVS subscribing brokerage firm of Thompson, McKinnon. The report established and published by the Illinois Legislative Investigating Commission, summarized and stated, "It is significant that although the securities were stolen on November 12, 1971 the theft was never reported by the stock brokerage firm, or anyone else, to the Federal Bureau of Investigation, for inclusion of the data in their National Crime Information Center Files". It is most interesting to note, that the stolen Securities were included in the SVS data base on December 14, 1971, by the subscribing brokerage firm, and that the contents of the SVS data base, for inquiry purposes was made available to the Illinois Legislative Investigating Commission, which in turn, declined the offer to use the information and services of the Securities Validation System.

November 26, 1973, Ten $1,000.00 Chicago, Burlington & Quincy Railroad, debentures and 24 shares of First National City Corporation common stock, with a combined dollar value of $11,208.00, was physically recovered and returned to First National City Bank, a non-subscribing New York Clearing Bank, with the cooperation of SVS and New York City Postal Authorities. November 27, 1973, One hundred shares of Genesco Incorporated common stock valued at $650.00, was physically recovered and returned to a New York City subscribing brokerage firm. The firm was notified by SVS prior to their own knowledge of reported mail loss.

November 27, 1973, The Toronto Stock Exchange, subscriber of Securities Validation System was notified of securities represented as 100 shares of General Instrument Corporation and 40 shares of Louisiana Pacific Corporation common stock, valued at a combined total of $5.280.00, reported lost in the mails by Canadian stockholders. Upon notification from the exchange the individual stockholders will be afforded the physical recovery and return of their lost securities.

November 27, 1973, Two thousand shares of Systems Capital Corporation, registered in the name of Horizons Unlimited-Partnership, common stock valued at an estimated market price of $2,000.00, was physically recovered, and made available to the Insurance Company of North America, a non participant of the SVS system. Information supplied by the U.S. Postal Authorities inquiring of SVS led to the recovery of the reported "lost in the mail" certificate.

November 27, 1973. Prior to the acceptance of delivery and payout to a New York Clearing Bank, SVS inquiry and confirmation provided a Newark, New Jersey municipal bond dealer with the detection of six (6) Nassau County, New York bearer bonds, valued at $30,000.00, which had been reported as stolen. These particular bonds, ready for delivery by the bank to the

unsuspecting broker, have been identified as a portion of a $400,000.00 bond theft from a NYSE member brokerage house, and included in the SVS data base on November 12, 1973.

November 28, 1973, Subsequent to a previous days SVS detection of reported stolen securities, an SVS subscribing municipal bond dealer, located in Newark, New Jersey, inquired and confirmed upon bonds recently accepted from a New York Clearing Bank. The results of the confirmation included twenty (20) South Carolina State, three (3) Nassau County, New York and seven (7) Gainesville, Florida, municipal bearer bonds, totaling $150,000.00. These detected bonds were reported as the second portion of a $400,000.00 theft from a NYSE member brokerage house, which reportedly were introduced by a non-subscribing municipal bond dealer, to a NYSE brokerage Clearing member, transferred to a New York Clearing Bank, which in turn delivered to the SVS municipal bond dealer.

November 28, 1973, Six (6) Nassau County, New York municipal bearer bonds, valued at $30,000.00, were detected by SVS inquiry and confirmation, by a subscribing NYSE clearing brokerage firm. These particular securities, identified as a portion of a known $400,000.00 municipal bond theft, were reported as delivered from a now defunct municipal bond dealer located in Manhattan.

November 30, 1973, Confirmation was made by SVS relative to the detection of nineteen (19) Kings County, Washington, municipal bearer bonds valued at $95,000.00. The origin of these particular bonds, identified as a portion of a $400,000.00 NYSE member firm bond theft, was reported as sold into a Philadelphia, Pa. branch office of a non-subscribing SVS brokerage firm, by a "known customer" lawyer. The securities were transferred to the New York office of the broker and delivered to an SVS subscriber.

December 4, 1973, Inquiry of SVS was requested by an individual stockholder, claiming he had purchased $10,000.00 of New York State Dormitory bonds from a subscribing SVS New Jersey municipal bond dealer, and requested varification of the bonds from SVS. Based on inquiry and confirmation it was established that the bonds were reported as stolen from a Newark, New Jersey subscriber. The individual's given name, address, etc., were immediately provided to Newark, New Jersey law enforcement officials for varification of the individual and the related transaction.

December 5, 1973, Based on information supplied by U.S. Postal Authorities, New York City, SVS inquiry and confirmation led to the physical recovery of $10,000.00 Pacific Lighting Service Company debenture. With the cooperation of New York City Postal Authorities the security was returned to the SVS subscribing firm of White, Weld & Co., prior to stop-transfer and replacement procedures.

December 5, 1973, With the cooperation and information furnished by the U.S. Postal Authorities, New York City, inquiry and confirmation of SVS allowed for the physical recovery and return of a $1,000.00 Potomac Electric Power Company bond, for an inputting SVS subscribing brokerage firm. The bond, being delivered to a customer and reported as lost in the mail, was recovered prior to the issuance of a replacement and stop-transfer notification.

December 12, 1973, Varification of receipt and sale of $4.5 million of U.S. Treasury Bills was requested by a Sion, Switzerland office of an SVS subscribing New York City bank. Based on a random sampling of SVS, inquiry and confirmation allowed for the negation of the entire sales transaction, by detection of Treasury Bills which had been reported as a $4.2 million messenger robbery by U.S. Trust Company of New York, on January 10, 1972.

December 13, 1973, Ten shares of IBM common stock, valued at the current market price of $2,585.00, was physically recovered and returned to Parrish & Company, a non-subscribing SVS brokerage firm. The securities were reported as lost in the mail, en route to the customer of the firm. In this instance, SVS took the responsibility of placing the stop-transfer with the appropriate transfer agent, until confirmation of receipt was made, for the stockholders protection.

December 12, 1973, SVS detection of Nineteen (19) counterfeit bonds, totaling $95,000.00 was made for an Oradel, New Jersey branch office of an SVS subscribing bank. The bonds being presented for a collateral loan, have been confirmed as 84% First Mortgage Pipe Line Bonds due 1991 in the denomina

tion of $5,000.00 each. These particular bonds, a portion of approximately 200 outstanding, were serially numbered V8201 thru V8220 and registered in the name of Aripax & Co. Federal authorities have been appraised of the entire incident for possible arrest and prosecution of the individual involved. December 17, 1973, Four hundred (400) shares of Hydro Optics, Inc., common stock, valued at $2,800.00 was physically recovered and returned to Registered Mail Central Bureau, which maintained the lost instrument bond of the securities. Inquiry and confirmation of SVS, provided U.S. Postal Authorities with information necessary to recover and return the securities, reported as lost in the mail by General Stock Transfer Co., of Jersey City, New Jersey.

December 19, 1973, A purchase of 105 Xerox Corporation Debentures, totaling $105,000.00 was negated for a subscribing New York brokerage firm by immediate inquiry and confirmation of SVS. The brokerage firm queried the system for the bonds, when presented by a "new customer". The bonds were a portion of 220 which were inputted by a participating Bank Note company two weeks prior to detection.

January 2, 1974, A $1000.00 Series "H" Savings Bond was identified for a Washington, D.C. participant, as a portion of a large theft. The bond was confirmed with the cooperation of the Federal Reserve Bank of New York. January 16, 1974, Inquiry and confirmation of a $100,000.00 U.S. Treasury Bill, reportedly a portion of the $15 million Chase Manhatten Bank theft, was made for a subscribing SVS brokerage firm's branch office located in Rome, Italy. This particular security was entered into the SVS data base by Chubb & Son's.

January 23, 1974, Based on an informants information relative to the sale of a U.S. Postal Service Bond, valued at $25,000.00 postal authorities were able to detect the bond on the SVS data base by inquiry and confirmation, as reported stolen. This particular bond was not included on the NCIC file when queried, however, updated on SVS by a subscribing insurance company. January 28, 1974, Two Hundred shares of Marcor Incorporated, common stock, valued at $4,000.00, was detected, recovered and returned to a nonsubscribing brokerage firm, with the cooperation of New York City Postal Authorities.

January 29, 1974, During the course of an investigation being conducted by law enforcement officials of Newark, New Jersey, 1500 shares of Data Systems, Inc., common stock valued at $4,500.00, were detected by SVS inquiry and confirmation immediately supplied by a New York City subscribing brokerage firm identifying the securities as stolen.

February 13, 1974, Internal audit procedures being conducted by an Albany, New York bank, led to the detection of 100 shares of Bunker Ramo common stock valued at $675.00 by SVS inquiry and confirmation. The security was one of four pledged as a collateral loan at the bank, in street “brokerage firm"

name.

February 15, 1974, Based on request of an SVS subscribing insurance company in Short Hills, New Jersey, SVS provided positive identification of seventeen (17) counterfeit securities, 100 shares each of Teledyne, Inc.. common stock value at $23,800.00. The securities, registered in the name of Frederick and Co., were reportedly passed through several brokerage firms in Chicago, Illinois.

February 21, 1974. When presented with securities to hold for safe keeping only, a suspecting SVS brokerage subscriber inquired and confirmed on 100 shares of Bunker Ramo common stock, valued at $675.00. The securities reported into SVS by duPont, Walston, Inc., were the same securities identified on February 13th, by a bank in Albany, New York.

February 22, 1974. A total of one hundred-twenty four (124) Tennessee Valley Authority and New York State Housing Finance, bearer bonds, amounting to $200,000.00, were identified by SVS inquiry and confirmation for a subscribing New York City brokerage firm as stolen securities.

February 25, 1974, Eleven hundred (1100) shares of Great Western Financial Corporation common stock, valued at $23,925.00, registered in the nominee name of CEDE & Co., were recovered for Registered Mail Central Bureau, of New York, based on information supplied by U.S. Postal Authorities.

February 26, 1974, A one million dollar U.S. Treasury Bill, identified as a portion of the Chase Manhattan Bank theft of $15 million, occurring in November 1973, was inquired and confirmed upon by a subscribing SVS member. Details of the case are held pending investigation by federal authorities.

February 27, 1974, Eight hundred shares of Chemical Bank New York common stock, valued at $36,800.00, was identified as a portion of a $368,000.00 Postal theft. SVS inquiry and confirmation provided the response to a Panama branch office of an SVS subscribing brokerage firm. Reportedly, the information regarding the securities has been presented to INTERPOL for recovery and possible apprehension purposes.

February 28, 1974, In the course of an SVS demonstration for an anticipated SVS subscribed, a Washington, D.C., bank offered to verify an entire collateralized loan package, which it considered contained spurious securities. Upon completion of SVS inquiry and confirmation, nine (9) securities of Ferro Corporation TRW Incorporated and Marcor Incorporated common stock were detected as counterfeit securities. The securities, representing eight hundred (800) shares and valued at a current market price of $17,200.00, are several which are known to have been placed in leading banks in the Washington, D.C. and New York areas.

March 1 1974, Three State of Israel Bonds, totaling $480.00 were physically recovered and returned to the stock transfer agent, for the losing individual holders, based on information supplied by the U.S. Postal Authorities of New York City.

March 4, 1974, A bearer bond, one of a reported 250 reported as stolen for $1,000.00 of Western Realty Prospect, Ltd., was inquired and confirmed upon for local law enforcement officials of Montreal, Canada. The inquiry was placed from the Toronto Stock Exchange, an SVS subscribing member in a cooperative effort with the Canadian Police.

March 6, 1974, Based on an informants information, a local law enforcement agency participating in the SVS program, placed inquiries and confirmations on eight (8) U.S. Government Treasury Notes, totaling $1,430,000.00 in dollar value. The notes were entered into the SVS data bank by Aetna Life and Casualty, a subscribing insurance company, with a due date for redemption of March 15, 1974. It is anticipated that the securities will be secured and returned to the rightful owners.

March 8, 1974, 1000 shares of Morse Shoe, Incorporated common stock, valued at $4,000.00 was recovered for the First National Bank of Boston, acting as transfer agent for the individual losing the stock. The recovery was made possible by information supplied by U.S. Postal Authorities of New York City.

March 9, 1974, Three separate issues of common stock representing, Chicago, Rock Island and Pacific Railway Company, Pop Wines, Inc., and Continental Mortgages Investors for 2500 shares, valued at the current market price of $9,500.00, were physically recovered and returned to Chemical Bank of New York, acting as transfer agent for the securities.

March 12, 1974, Information supplied by the U.S. Postal Authorities allowed for the physical recovery and return of 14 shares of common stock, valued at $238.00 of General Tire & Rubber Company, for the individual stockholder. March 14, 1974, 209 shares of common stock of National Investors Corporation stock, valued at $1,463.00, was returned to Union Data Corporation of New York, based on SVS inquiry and confirmation.

March 19, 1974, In an attempt to sell a 1000 shares of Texas Gulf Surphur common stock, valued $34,500.00, a branch office of an SVS subscribing brokerage firm, negated the pay out of the sale presented for one-third the price. SVS inquiry confirmed that the security was reported stopped by the transfer agent, Shroeder Trust Company of New York.

March 21, 1974. Based on information supplied by U.S. Postal Authorities. 100 shares of Patagonia Corporation common stock, valued $925.00 was physically recovered for Registered Mail Central Bureau, a subscribing SVS member, of New York.

March 21, 1974, SVS inquiry and confirmation allowed for the physical recovery and return of 1000 shares of Walter E. Heller International Corporation, common stock valued at $37,000.00, was made for Merrill Lynch,

an SVS subscribing brokerage firm. The recovery was made 5 days after the item was entered into the SVS data base.

March 22, 1974, Eight days after entering 100 shares of the LTV Corporation common stock, valued at $1,000.00, SVS inquiry and confirmation allowed for the physical recovery and return of the security for Hornblower-Weeks & Hemphill, Noyes, a subscribing brokerage firm.

March 25, 1974, A $10,000. GAC bond, was physically recovered for the Seaboard Surity Insurance Company, holding the bond of indemnity for the losing stockholder. The information, supplied by the U.S. Postal Authorities of New York, allowed SVS to identify through Seaboard, inform the transfer agent, First National City Bank, and recover and return to the individual stockholder.

March 26, 1974, Information received from the New York City U.S. Postal Authorities, allowed for SVS inquiry and recovery of one share of IBM common stock, valued at $245.00 for Shields & Co., a non participating brokerage firm. March 28, 1974, Three (3) U.S. Treasury Notes and two (2) Federal Land Bank certificates totaling $31,000.00, were reported lost in transit in 1969 by Shearson, Hammil, a New York City brokerage firm, were inquired and confirmed upon, when checking a customers account by Kidder, Peabody a subscribing SVS brokerage firm. All information relative to the transaction after confirmation by the Federal Reserve Bank of New York, was immediately reported to local law enforcement agencies.

April 2, 1974, A total of six (6) U.S. Treasury Notes, totaling $150,000.00, were inquired and confirmed as reported to SVS by the Federal Reserve Bank, for a law enforcement agency, located in Washington, D.C.

April 4, 1974, Based on information supplied by the U.S. Postal Authorities, New York, SVS detection and recovery of a $10,000.00 G.A.C. Corporation bond was accomplished for Seaboard Insurance Co. and First National City Bank, transfer agent, neither of which participate in the SVS system.

April 5, 1974, One hundred shares of Basic Inc., and two hundred shares of Puerto Rican Cement Co., comon stock, valued at $2,062.00, was physically recovered and returned to the subscribing SVS brokerage firm of Hoppin, Watson, based on SVS inquiry and confirmation.

April 8, 1974, Based on securities information received from the U.S. Postal Authorities, New York City, SVS detection allowed for the physical recovery and return of 150 shares of U.S. Smelting and Refining & Mining Co., common stock, valued at $6,900.00, to the SVS subscribing brokerage firm of Hayden, Stone Inc.

April 15, 1974, One hundred shares of U.S. Steel common stock, valued at $4,300.00, was detected by SVS inquiry, confirmed by the participating SVS transfer agent, U.S. Steel, and the securities transaction negated for the non-subscribing brokerage firms of Bruns Nordeman.

April 25, 1974, A New York City, Municipal Bearer bond, valued at $5,000.00 was detected prior to cash settlement for a participating SVS municipal bond dealer of Newark, New Jersey.

April 25, 1974, Eleven shares of Central Securities Corp., common stock, valued at $49.50, was physically recovered and returned to Loeb, Rhodes & Co., based on information received from New York City Postal Authorities.

May 11, 1974, Five shares of Mellon National Corp., common stock, valued at $235.00, was physically recovered and returned to Reynolds Securities, Inc., an SVS subscribing brokerage firm, which had been reported as a mail loss.

SVS DETECTION AND RECOVERY SUMMARIZATION

(a) The following represents the dollar value of securities detected and recovered by participating Securities Validation System members on an annual basis: