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PRESS NEWS -New York Insurer Formed for “Excess SIPC” Protection

Customer Asset Protection Company


NEW YORK, December 22, 2003 - Customer Asset Protection Company (CAPCO), a licensed New York insurance company, announced today it will provide excess securities account protection (“Excess SIPC”) for institutional and individual brokerage accounts of certain securities firms beginning early 2004.

CAPCO intends to provide account information protection for the net equity of client accounts of participating firms. This “Excess SIPC” protection is in excess of account protection provided by the Securities Investor Protection Corporation (SIPC). The domestic insurance companies that now provide Excess SIPC protection announced earlier this year that they no longer offer this protection.

CAPCO intends to provide protection that is similar to the excess SIPC protection that has been available from the domestic insurance market until now. It protects U.S. clients and follows the underlying terms of SIPC protection. CAPCO also intends to provide a form of additional account protection for clients of participating U.K. broker dealers. Similar to current coverage, each client account, subject to certain limitations, will be protected up to its net equity for securities and cash held in the account at the brokerage firm. CAPCO received an A+ credit and financial strength rating from Standard and Poor’s. It is organized under the New York state law and is licensed by the New York State Department of Insurance.

“CAPCO provides clients the broadest protection available in the marketplace today,” said Michael O’Connell, a Managing Director of Marsh Inc., the leading risk and insurance services firm. Marsh assisted in the design and development of CAPCO.

“CAPCO is an excellent example of industry members working together to provide a solution to a capacity constraint in the insurance marketplace” said P. Bruce Wright, a partner at LeBoeuf, Lamb, Greene & MacRae, L.L.P., which is one of the leading legal service providers to the insurance/financial services industry. LeBoeuf assisted in connection with the legal, tax, and regulatory issues involved in the formation of CAPCO.

“We are pleased that a number of major securities firms worked together to organize and capitalize CAPCO, and we look forward to the continuation of this important coverage for clients, “ said Frank Lagerstedt, President of CAPCO.

“The organizers of CAPCO are to be congratulated for developing a timely and comprehensive investor program for clients of its participating firms. CAPCO is an important further example of the commitment of securities firms to the needs of their clients,” said Donald Kittell, Executive Vice President of the Securities Industry Association.

The 14 firms that formed CAPCO and will employ its coverage are: A.G. Edwards, Pershing – a subsidiary of The Bank of New York, Bear Stearns, Credit Suisse First Boston, Edward Jones, National Financial Services – a Fidelity Investments company, Goldman Sachs, JP Morgan Chase, Legg Mason Wood Walker, Inc., Lehman Brothers, Morgan Stanley, Robert W. Baird & Co., Raymond James & Associates, and Wachovia Securities.


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