Price and Volume Volatility

The way some stocks are traded is changing dramatically, and the change in trading methods may affect price volatility and cause increased trading volume. This price volatility and increased volume present new hazards to investors, regardless of whether trading occurs on-line or otherwise.

Customers may suffer market losses during periods of volatility in the price and volume of a particular stock when systems problems result in inability to place buy or sell orders. Customers trading on-line may have difficulty accessing their accounts due to high Internet traffic or because of systems capacity limitations.

Procedures for handling customer orders must be fair, consistent, and reasonable during volatile market conditions and otherwise. To ensure that our customers are knowledgeable about these procedures, the following is our procedures for handling the execution of a securities transaction, particularly during volatile market conditions:

All manual orders are received over the telephone. No orders are received by e-mail. Once orders are received, they are time stamped. Whether market conditions are calm or volatile; all orders will be entered promptly with Bear Stearns Securities Corp for execution. Depending upon any limitations stated by the customer and market conditions, the order will be executed. Upon completion, the order will again be time stamped. Following execution, the customer will be notified of the partial or full completion of their order. The customer's account will then be updated to reflect the current activity.

Orders received on-line via Client Tool Kit (CTK) are directly entered to the Bear Stearns trading system. Depending upon any limitations stated by the customer and market conditions, the order will be executed.