Subject: File No. DF Title IX - Municipal Securities and Municipal Advisors
From: John F Cockerill

March 9, 2013

March 9, 2013
A careful review of the Municipal Reinvestment bid form will show how the design and completion of this form is prone to avoidance of accountability, criminal completion, accountability of time of transfer, and forgery.

The following recommendations are offered for your consideration.

When I go to church and put a ten dollar check in the basket, I have to write out the amount in longhand. To insure a forgery claim in the event that another person should attempt to pass my check without my hand written payee, amount and signature, this written information is available for analysis.

On a multimillion dollar municipal reinvestment bid form, that is not required. A simple dash is provided to fill in the interest rate submitted. This means a blank form could be submitted and filled in later. the mere evidence of a written number of three numerals makes it difficult to examine for authenticity that the bidder actually filled in the interest before they sent the form to the bid recipient. The opportunity for forgery is all to easily available, especially if the receiver is familiar with the handwriting of the sender.

1. By hand writing the amount as:
"Six and two one hundredths percent per annum would leave more evidence for the investigation of potential forgery, as it does in a check writing investigation.

2. The record keeping requirements for these agreements should be expanded to include an originators file which would include the original bid form as sent with a fax confirmation form for the transmission.

The requirement that all valid copies retain the fax header on the transmissions and that any alteration of the original fax transmission be considered alteration or destruction of evidence, and obstruction of investigation, should they be found altered in the records of the transacting parties.

That all forms received after the posted dateline on the agreement be marked unacceptable as received and filed with the submissions received.

In this way incomplete forms would be visible in the files of the originator, and the forgery investigated from the acceptance fax returned to the bidder filed by the approval authority ,the broker and the winning bidder.

3. The denial of senior executives about behavior and actions on the part of traders is inexcusable. I order to help them become more knowledgeable of the activities in their organizations it is suggested that more accountability be implemented to assure that executives know: what, why, when, and who is conducting business for the corporation.

In the area of municipal reinvestment bid forms the simple endorsement of bids by a supervising Vice President of the Division which holds fiduciary responsibility for these transactions, endorses the bid form and it completeness and compliance with the disclosure requirements and completes his information on the form and sends the actual fax within the deadline. The Vice President will retain the original file for his records.

The Endorsement should include handwritten information as to name, title, approval of the bid, date and time of his signature, and telephone number.

Some would say this is demanding. Well the trader has to get a written approval to take someone to lunch from the Vice President. Why not let the Vice President supervise and approve a bid on a $30,000,000 investment bid.

4. Further, the Vice President or Vice Presidents responsible for this activity should be appointed annually by the Board of Directors for this responsibility.

Perhaps this procedure will make the Board of Directors and the Senior Officer more responsible when they have to answer to Congress and the Courts about improprieties and their lack of due diligence to avoid decades of fraud and abuse in their business practices.