Several months ago, this Bank had a serious problem with the handling of one of EF Hutton's accounts. The situation was brought to the attention of Mr. Bralove, the manager of one of your offices here in Washington, who immediately called Mr. Thomas Morley in New York seeking his advice. Mr. Morley worked closely with us to correct the problem and was most generous in a settlement. You can be proud of your officers who corrected this problem and reinforced our faith in the American business system. I can assure you that the investment officers of the Bank and Trust Department will continue their business with your firm and increase it whenever possible. Mr. HUGHES. The letter is dated April 30, 1982, and it says to Mr. Ball, in essence, that: We have had a serious problem with the handling of the account. The situation was brought to the attention of Mr. Bralove, the manager of one of your offices here in D.C., who immediately called Mr. Morley in New York, seeking his advice. Mr. Morley has worked closely with us to correct the problem and was most generous in a settlement. What kind of a settlement, Mr. Morley? Mr. MORLEY. I believe they are referring to-they had a negative collected balance in the bank for a period of time. It was brought to Mr. Bralove's attention, who called me. We settled up as far as leaving additional balances with the bank over a period of time, and I believe we paid them the fee for any shortfall that may have occurred. Mr. HUGHES. So basically, when they complain that you had been overdrafting, using their money without their permission, you had to compensate them for it. Do you know the sum that was provided to First American Bank? Mr. MORLEY. Pardon me, sir? Mr. HUGHES. What was the sum that was provided, how much did it cost for you to settle this out of court, so to speak? Mr. MORLEY. I don't recall, sir. Mr. HUGHES. Can that be furnished for the record for us, Mr. Fomon? Mr. FOMON. We'll try. I don't know. [Information follows:] bee: John A. Pecilunas (202) 637-6333 1STAMERICAN FIRST AMERICAN BANK, N.A. March 10, 1982 Mr. Tomas Morley E. F. Hutton Company One Battery Park Plaza New York, New York 10005 Dear Mr. Morley: Enclosed are the detailed account analysis on your company's two commercial checking accounts for the entire calendar year 1981 and fer the month of January 1982. I have also enclosed a summary report which reflects the net investable balance position of your accounts by month with the corresponding income or loss. As a result of the activity in the above accounts for the 13 month period ending January 31, 1982, the Bank has incurred a net revenue loss of $114,510.38. In order to make up this revenue short fall on a balance requirement basis, you would be required to maintain an approximate average daily investable balance of $10,500,000 for a month based on our February earnings credit rate of 14.08%. Should you have any questions relative to the enclosed material-or need any additional information please call me at (202) 637-6333. bce: John A. Pecilunas Vice President (202) 637-6333 1STAMERICAN FIRST AMERICAN BANK, N.A. April 6, 1982 Mr. Thomas Morley New York, New York 10005 Dear Tom: Enclosed is a copy of the March account analysis for your company's two checking accounts. The excess balance position during March generated an income of $3,829.82. Following is a summary of your balance deficiencies for the time period January 1981 thru March 1982: If you have any questions or need additional information, please call me at the above listed phone number. Enclosures (2) E. F. Hutton File JAP File Sincerely, John A. Pecilumas |