Lapas attēli

The Honorable Eugene A. Ludwig
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able through LEXIS and similar research sources, however, we cannot determine what charges the occ brought against Ms. Pollard, or what Ms. Pollard stipulated to in the May 1992 order. Accordingly, we request that you provide the Subcommittee with a copy of the record in the occ's Pollard case. In addition, we request that you describe those respects in which the occ's action overlapped with or differed from the SEC's action of an earlier date.

3. Please provide the Subcommittee with copies of: the Comptroller's Handbook for National Banks, the Comptroller's Handbook for Compliance, and the Comptroller's Handbook for Fiduciary Activities.

Thank you for your cooperation and attention to this request.


John D. Dingell

Chairman Subcommittee on oversight

and Investigations



The Honorable Dan Schaefer

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I am responding to your May 10, 1994, letter in which you requested additional information and clarifications concerning the Subcommittee's comparison chart of the treatment of broker-dealers and investment advisers under the federal securities laws. The numerical references in our responses below correspond to those used in your May 10 letter.


You have asked if the OCC has determined whether brokerage activities require
approval as fiduciary activities subject to 12 U.S.C. $ 92a and 12 C.F.R. Part 9.
When a national bank simply provides brokerage services, without exercising
investment discretion or furnishing investment advice, the bank is not considered to
be engaging in fiduciary activities. However, when brokerage activities are combined
with investment discretion or investment advice, the requirements of 12 U.S.C. $ 92a
and 12 U.S.C. Part 9, relating to the exercise of trust powers, become applicable.
You have also asked that we provide citations to orders or releases in which the OCC
has advised banks that their brokerage activities are subject to section 92a and 12
C.F.R. Part 9. Attachment I contains copies of several orders and releases where the
OCC has advised banks conducting securities brokerage activities in conjunction with
investment advisory activities that they must comply with these provisions.

Decision of the Comptroller of the Currency on Application from American
National Bank of Austin, Austin, Texas, to Establish an Operating Subsidiary
to Provide Investment Advice, (1983 - 1984 Transfer Binder) Fed. Banking L.
Rep. (CCH) ( 99,732.

Letter to R.C. Gallagher, President, Kellog-Citizens National Bank of Green
Bay from Judith A. Walter, Senior Deputy Comptroller for National
Operations, (1985 - 1987 Transfer Binder) Fed. Banking L. Rep. (CCH)


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Letter dated July 30, 1985 from Deborah S. Hechinger, Director, Securities &
Corporate Practices Division, (1985 - 1987 Transfer Binder) Fed. Banking L.
Rep. (CCH) 85,523.

In footnote 1 of your letter you ask whether because the OCC has developed two
distinct cadres of examiners who specialize in securities activities and in fiduciary
activities this is an acknowledgment by the OCC that national bank securities activities
are separate from the trust function. As the letters cited above indicate, the OCC
does not view these activities as separate. It is correct to say, however, that where
the OCC believes that specialized expertise is required to improve the examination
process, the agency utilizes its resources to acquire the specialized expertise that is


You have requested that we provide you with the record for In the Matter of Thelma Elizabeth Pollard (1992). Attachment II consists of the Notice of Charges ("Notice") and Stipulation and Consent Order ("Order") for the Pollard case. Since the case settled at an early stage, I am transmitting the Notice rather than the full record, because the Notice fully describes the OCC's action and the record is voluminous and contains material not relevant to your inquiry.

You have asked us to describe those respects in which the OCC's action overlapped with or differed from the SEC's action of an earlier date. Both actions were similar, and concerned allegations of securities fraud. Our action was brought under 12 U.S.C. $ 1818(e) and alleged violations under $ 17(a) of the Securities Act of 1933, IS U.S.C. $ 779(a), stemming from the fraudulent transfer of customer funds from deposit instruments, including federally insured certificates of deposit, and the sale of commercial paper issued by the subject issuing bank's holding company without the customer's knowledge, authority or consent. The SEC's action also alleged violations under $ 17(a).

The OCC imposed and collected a civil money penalty from Ms. Pollard, and for a
(wo year period from the date of settlement of the case, prohibited her from engaging
in activities with or related to depository institutions, as noted on pages 3-5 of the
Order. The SEC's release indicates that the SEC entered a final judgment
permanently enjoining Ms. Pollard from violations of Section 17(a) of the 1933 Act.


Attachment III contains copies of the following requested materials

Comptroller's Handbook for National Banks

Comptroller's Handbook for Compliance

Comptroller's Handbook for Fiduciary Activities

-3I hope these clarifications and materials provide you and your staff with the information you are seeking. Should you need any additional information, please let me know.

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Dear Comptroller Ludwig:

Pursuant to Rules X and XI of the Rules of the U.S. House of
Representatives, and our continuing oversight of securities and
exchanges, we are investigating the facts and circumstances
surrounding the proposed merger between the Dreyfus corporation
(Dreyfus) and Mellon Bank Corporation whereby Dreyfus will be
acquired by Mellon Bank, N.A. as a separate operating subsidiary.

In connection with your testimony at the Subcommittee
hearing on March 3, 1994, this is to request that you provide for
inclusion in the record the following responses, information and
documents by the close of business on Thursday, March 31, 1994.

Please support and explain your interpretation (Tr. pp.30-
33) that 12 CFR Part 9 protects investors in a mutual fund
or purchasers of other securities in a bank. Mutual funds
obviously are not the trusts or estates contemplated by Part

How are they encompassed within the definitions of
"account,". "fiduciary," and "fiduciary powers" in 12 CFR S
9.1(a), (b), and (c)? As requested (Tr. pp. 32, 33), please
cite and explain every instance where you have used Part 9
in connection with misbehaviors in connection with mutual

fund sales.
2. You were asked (Tr. p. 34) whether occ had ever sanctioned

any bank for any impropriety in connection with mutual fund
sales. You responded that you had required banks to change
their practices. For the period during which the occ has
permitted national banks to sell mutual funds and other
securities, please provide for the record a list, with an
explanation of the alleged wrongdoing and the sanction
applied, of occ enforcement actions where sanctions have
been applied against banks or their employees in connection
with mutual fund sales. If there are none, so state.


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