Cross border risks, deposit liability not an unfounded concern

CARLSBAD, Calif., August 13, 2010--(PR Newswire)

A second item that we've received some inquiries on is our disclosure of Wells Fargo's Cayman Island checking account sweep function, with an implication that it represents something that is less than above-board. I can only state that these concerns are unfounded. Nevertheless, because we had been maintaining minimal balances in our checking account causing the sweep functionality to in effect be non-operative, we have recently discontinued the sweep service.

10-Q (Filed: 12-10-2010)

Our commercial checking account was linked to a sweep account. This sweep account was maintained by our financial institution in an offshore account located in the Cayman Islands. This sweep account was a deposit liability of our financial institution, the funds were not insured by the Federal Deposit Insurance Corporation (“FDIC”); in liquidation the funds would have had a lesser preference than deposits held in the United States, and the funds were subject to cross-border risks. In August 2010, we discontinued the sweep function associated with our commercial checking account.