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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON. D.C. 20549

OFFICE OF THE
GENERAL COUNSEL.

October 15,2003

Via Facsimile and Mail

Daniel Marcus
General Counsel
National Commission on Terrorist Attacks Upon the United States
301 7* St. SW, Room 5125
Washington, DC 20407
202-296-5545 (facsimile)

Dear Mr. Marcus:

I am writing to memorialize a telephone call I had with Doug Greenburg on 10 October 2003.
Staff from the Securities and Exchange Commission's ("SEC") Office of International Affairs
were also on the telephone call. That telephone call concerned your 26 September 2003 request
for documents relating to the investigation by the SEC into trading activity potentially designed
to profit from, or avoid losses from, the 11 September terrorist attacks ("SEC Document Request
No. 2"). Specifically, you asked for information received from any foreign government agency
or entity.

A review of our files revealed that information responsive to SEC Document Request No. 2
includes non-public information we received from foreign securities authorities pursuant to our
bilateral Memoranda of Understanding and other information-sharing arrangements. As we
discussed with Mr. Greenburg, we requested non-public information from foreign securities
authorities pursuant to these MOUs, which have standard provisions on use and confidentiality
of information (see MOUs previously sent to Mr. Greenburg).

Non-public information provided to us under these MOUs is generally subject to limitations on

disclosure in the jurisdiction of the requested authority. In this regard, the foreign securities
authorities provide non-public information to us with the understanding that the information's
use would be limited to enforcing the federal statutes administered by the SEC (e.g., bringing
civil and administrative proceedings, and assisting in a criminal prosecution of securities related
offenses). If the information is used for any other purpose, we are obliged pursuant to the MOUs
to "inform the [foreign securities authority] of [the SEC's] intention and provide the [foreign
securities authority] the opportunity to oppose such use." (See, for example, Clause 7 of the
MOU with the Australian Securities Commission; Section 5 of the MOU with the German
Bundesaufsichtsamt fur den Wertpapierhandel; and Part V of the MOU with the UK Securities
and Investments Board.)
10/15/03 WED 17:27 FAI 202 942 9537 GC GEN LIT

At the time we made our requests for assistance to the foreign securities authorities, the National
Commission on Terrorist Attacks Upon the United States ("NCTA") had not yet been created,
and our requests did not contemplate that the information would be used for the purposes set out
in the NCTA's mandate. We are under an obligation to inform the foreign securities authorities
of the NCTA's request and seek their consent under the MOU prior to any disclosure of the
information.

We understand the critical need for the NCTA to have this information, and anticipate that our
counterparts will appreciate the importance of the NCTA's investigation. We propose to obtain
their consent as expeditiously as possible. This process also will enable us to honor our
commitments and to preserve our relationship with our counterparts so that we can continue to
obtain effective and prompt cooperation in connection with the investigation and prosecution of
violations of the federal securities laws.

Please do not hesitate to contact me if you would like to discuss this matter further. We will be
in touch with you to update you on the progress of our discussions with our foreign counterparts.

Very truly yours,

Melinda Hardy
Assistant General Counsel
202-942-0877

cc: Doug Greenburg

Ethiopis Tafara
Director, SEC Office of International Affairs