WASHINGTON, D.C. - October 3, 2003 - The Securities Investor Protection Corporation (SIPC) announced today that it has terminated an employee for a violation of the SIPC Business Ethics Policy. Donald Scott, who had been a SIPC examiner, was discharged as a result of an undisclosed financial relationship with Roger Drayton, of R.J. Drayton & Associates, Inc., of Brooklyn, NY.

Drayton is now under investigation for overstated time records and overbilling of two court-appointed trustees overseeing brokerage liquidation proceedings. Drayton and his firm provided personnel and support services to the trustees.

Douglas L. Lutz, the trustee for the liquidation of Donahue Securities, Inc. in Cincinnati, OH, discovered the overbilling and then notified SIPC. Lutz also informed the trustee for the liquidation of Sunpoint Securities, Inc., in Longview, TX, of Drayton's actions, at which point overbilling was then discovered in that case. The overbilled amounts were not customer funds, but, instead, were supplied by SIPC to pay administrative expenses.

SIPC General Counsel Stephen P. Harbeck said: "SIPC and its staff are committed to the highest standards of responsibility and accountability. Actions by SIPC employees which give rise to even the appearance of impropriety are not tolerated. SIPC and the court-appointed trustees are cooperating and coordinating fully with regulatory authorities on this matter. We are 100 percent committed to seeing to it that all incorrectly billed funds are recovered."

SIPC Vice President for Operations and Finance Philip Carduck said: "Our guidelines for trustees have been revamped to put in place an additional level of review with respect to time sheets for consultants. This strict new step adds an important layer of new oversight to the process. While we are pleased that this problem was uncovered by a trustee in the course of their normal review, we want to tighten things up even further to minimize the potential for future problems."