OFFICE OF COMPTROLLER OF THE CURRENCY

THE OFFICE OF COMPTROLLER OF THE CURRENCY ALLEGED THAT MR. TULLIS PLACED OR CAUSED TO BE PLACED INAPPROPRIATE COLLATERALIZED MORTGAGE OBLIGATIONS IN CLIENT ACCOUNTS, MISPRICED THE SECURITIES ON CLIENT STATEMENTS, IN CUSTOMER ACCOUNTS AND IN BANK RECORDS AND ENGAGED IN INAPPROPRIATE AND UNFAIR CROSS TRADES OF THE SECURITIES.

Stipulation and Consent

Civil and Administrative Penalty(ies)/Fine(s)

$4,000.00

Prohibition

MR. TULLIS'S POSITION WAS THAT: (1) THE PURCHASE OF CMO'S FOR THE BANK'S CLIENTS WAS NO UNSUITABLE NOR INCONSISTENT WITH THE TERMS OF THE AGREEMENTS WITH THE BANK'S CLIENTS; (2) ANY CROSS TRANSACTIONS WERE REVIEWED IN ACCORDANCE WITH THE BANK'S ASSET MANAGEMENT POLICIES, DONE SOLELY FOR THE PURPOSES OF DIVERSIFICATION WITHIN INDIVIDUAL PORTFOLIOS, DESIGNED TO ENSURE THAT THE ACCOUNTS WERE MANAGED CONSISTENT WITH THE APPLICABLE CLIENT AGREEMENTS AND WERE REVIEWED AND APPROVED BY SENIOR MANAGEMENT AT THE BANK; AND (3) THE VALUES OF SECURITIES AT ISSUE, VALUES WHICH WERE DIFFICULT TO DETERMINE AND SUBJECT TO INTERPRETATION, WERE NOT MISSTATED OR CAUSED TO BE MISSTATED, WERE APPROVED BY SENIOR MANAGEMENT AT THE BANK AND THAT MR. TULLIS DID NOT HAVE ULTIMATE OR SUPERVISORY RESPONSIBILITY FOR THOSE DETERMINATIONS.