News Release

SIPC: 3,200 Accounts With $106 Million Moving to Saxony Securities From Failed Clearing Services of America

Collapse of St. Louis Brokerage Firm Tied to Earlier Eberhard/Park South Failure

WASHINGTON, D.C. - September 12, 2003 - The Securities Investor Protection Corporation (SIPC), which maintains a special reserve fund authorized by Congress to help investors at bankrupt brokerage firms, announced today that 3,200 customer accounts containing $106 million are being transferred on an expedited basis from Clearing Services of America (CSA), a failed St. Louis, Missouri-based brokerage firm, to Saxony Securities, also of St. Louis.

The CSA liquidation is linked to the February 2003 failure of New York City-based Park South Securities due to misconduct on the part of owner/broker and television investment personality Todd M. Eberhard. Saxony Securities clears its transactions through Pershing Securities, which is the same clearing firm previously used by CSA.

SIPC General Counsel Steve Harbeck said: "The fact that CSA and Saxony had Pershing Securities in common as a clearing firm should permit customers to execute sales transactions more quickly than is the case in a typical liquidation proceeding. On this expedited basis, the former CSA clients should have full access to their assets in terms of purchases and sales in as little as one week."

On September 8, 2003, Judge Catherine Perry of the U.S. District Court for the Eastern District of Missouri entered an order placing Clearing Services of America into liquidation under the Securities Investor Protection Act. The judge also appointed Thomas Vandiver to serve as trustee in the matter.

According to SIPC, Todd M. Eberhard had used Clearing Services of America as a base of operations prior to his involvement with the failed Park South brokerage firm and related entities. On February 5, 2003, the Securities and Exchange Commission (SEC) filed an emergency action charging securities fraud, including looting of customer brokerage accounts, against Eberhard and his brokerage and investment advisory firms, Park South Securities, a registered broker-dealer and registered investment adviser, and Eberhard Investment Associates, Inc., an investment adviser that was not registered with the SEC. A total of nearly 2,300 customer accounts containing $77 million were initially frozen in the Eberhard/Park South liquidation handled by SIPC.

Harbeck said: "This is an unusual case in that we had a domino situation where the collapse of one brokerage firm led to the uncovering of similar problems at another brokerage firm. What we did here was follow the money in the Park South case when it led us to the alleged misconduct in Mr. Eberhard's earlier history. Our goal here is to be as thorough as possible to ensure that the full scope of the damage inflicted by Mr. Eberhard is tracked down and contained. In this context, we want to recognize the collaborative efforts of the NASD and, in particular, that organization's diligent efforts to make sure that as few investors end up being inconvenienced by the CSA liquidation as is possible."

Clearing Services of America specialized in carrying out trades on behalf of dozens of small brokerage firms around the United States that are too small to do their own clearing.

In addition to claim forms that will be provided by U.S. mail, information about the CSA liquidation proceeding will be available online at http://www.sipc.org. Claimants are encouraged to use the SIPC Web site to print out claim forms rather than calling the office of the trustee.

ABOUT SIPC

From its creation by Congress in 1970 through December 2001, SIPC has advanced $513 million in order to make possible the recovery of $14.0 billion in assets for an estimated 622,000 investors. SIPC estimates that more than 99 percent of eligible investors have been made whole in the failed brokerage firm cases that it has handled to date.

SIPC is an important part of the overall system of investor protection in the United States. While a number of federal, self-regulatory and state securities agencies deal with cases of investment fraud, SIPC's focus is both different and narrow: Restoring funds to investors with assets in the hands of bankrupt and otherwise financially troubled brokerage firms. The Securities Investor Protection Corporation was not chartered by Congress to combat fraud.

SIPC either acts as trustee or works with an independent court-appointed trustee in a fraud case to recover funds. The statute that created SIPC rules provides that customers of a failed brokerage firm receive all non-negotiable securities that are already registered in their names or in the process of being registered. At the same time, funds from the SIPC reserve are available to satisfy the remaining claims of each customer up to a maximum of $500,000. This figure includes a maximum of $100,000 on claims for cash.

FOR MORE INFORMATION, CONTACT:
Ailis Aaron, The Hastings Group,
(703) 276-1116 or aaaron@hastingsgroup.com