SECURITIES VALIDATION SYSTEM DATA BASE SUMMARIZATION, AS OF JUNE 14, 1974

Note: Average value common stock at $30 per share, average value preferred stock at $44 per share, average value warrants at $6 per share, average value rights at $1 per share, face value applied to bonds, face value applied to coupons.

SECURITIES VALIDATION SYSTEM ESTIMATED PROJECTION OF SECURITIES DOLLAR VALUE, SECURITIES VALIDATION CORPORATION PROJECTED OUTSTANDING SECURITIES, JUNE 1973

Senator HUDDLESTON. Mr. du Pont has testified before this committee before and has supplied a great deal of information to the committee staff. This morning's testimony is an updating of what he has previously given to us. Because of that, our questioning will be rather limited so that we can hear the testimony of various bank representatives this morning.

To summarize, Mr. du Pont, you indicate that with your system you have identified something like $11 billion worth of stolen or fraudulent securities?

Mr. DU PONT. That is correct.

Senator HUDDLESTON. And you still estimate that the total amount throughout the country may be in the neighborhood of $50 billion? Mr. DU PONT. Conservatively.

Senator HUDDLESTON. You indicate that banks have shown a great reluctance to participate in your system and to avail themselves of the available information. You cite the holder-in-due-course status as being one reason that they give for not participating. Is that correct?

Mr. DU PONT. That is one of the reasons.

Senator HUDDLESTON. And you have indicated that you do not believe that this is a valid objection?

Mr. DU PONT. Not if there is a way to check, by using good practices and procedures.

Senator HUDDLESTON. Mr. du Pont, you listed several examples. One of them is pretty obviously identifiable as to which institution it involves. I think it would be helpful to the committee if you would identify for the record those specific banks or institutions you are referring to in the examples which begin on page 5 of your statement. Mr. DU PONT. The first one was 66 out of 70 municipal bonds for $180,000, the Sterling National Bank.

The next concern concerning the $5,000 bearer municipal bonds was Bankers Trust.

The next one concerning the delivery from a foreign bank, the foreign bank was the National Westminister of London.

Mr. FELDMAN. What was the brokerage firm, Mr. du Pont?

Mr. DU PONT. Hallgarden.

The Long Island bank is Community National.