TRANSACTION AT HAND WAS AN IN HOUSE CROSS OF 136000 SHARES OF FIRST CITY PROPERTIES BETWEEN TWO CUSTOMERS OF FAS. THE SELLER, [THIRD PARTY], WAS CHARGED BY THE SEC FOR STOCK MANIPULATION WHICH AFFECTED THE BUYER PRIOR TO SETTLEMENT. THE BUYER [CUSTOMER], THE CLAIMANT, WAS LIQUIDATED OUT OF HIS POSITION OF FIRST CITY PROPERTIES DUE TO REG T REQUIREMENTS. CUSTOMER FELT THAT HE SHOULD HAVE BEEN PROVIDED MORE TIME TO MEET THE CALL. STOCK WENT UP A POINT AFTER LIQUIDATION AND CUSTOMER FELT HE SHOULD HAVE RECEIVED THAT PRICE. CUSTOMER FILED ARBITRATION CLAIMING STOCK FRAUD, LAW FRAUD, BREACH OF FIDUCIARY DUTY, TEXAS DECEPTIVE TRADE PRACTICES ACT, BREACH OF AGREEMENT, TEXAS UNFAIR COLLECTIONS PRACTICES ACT AND VIOLATION OF RICO (RACKETEER INFLUENCED AND CORRUPT ORGANIZATION ACT).

$136,000.00

DISCLOSURE WAS PUT ON BY FAS IN ERROR. MR. SERRAS WAS NAMED AS A RESPONDENT IN AN NASD ARBITRATION PROCEEDING FILED BY [CUSTOMER], WHICH ALSO INCLUDED FIRST AFFILIATED SECURITIES, INC., AND [THIRD PARTY] ON AUGUST 20, 1987. THE ARBITRATION PROCEEDING (CASE#87-1692) WAS SETTLED BY FAS, IN WHICH MR SERRAS'INVOLVEMENT WAS ONLY AS A COMPLIANCE OFFICER. AS THE COMPLIANCE OFFICER MR SERRAS WAS NOT INVOLVED IN ANY SALES PRACTICE RELATED ISSUES. PER NASD INTERPRETATION BEING NAMED AS A RESPONDENT DUE TO BEING THE COMPLIANCE OFFICER IN WHICH NO SALES PRACTICE ISSUES WERE CLAIMED AGAINST MR SERRAS, FILING A DISCLOSURE FOR THIS ISSUE SHOULD NOT BE NECESSARY. HOWEVER THE NASD WILL NOT ALLOW THIS TO BE TAKEN OFF.