NEWS RELEASE
Office of Maryland Attorney General J. Joseph Curran, Jr.


December 5, 2001 Media Inquiries: Sean Caine 410-576-6357

LEGG MASON WOOD WALKER, INC. AGREES TO PAY $1.78 MILLION TO MONICA L. COLEMAN INVESTORS

Attorney General J. Joseph Curran, Jr. announced today that Baltimore-based Legg Mason Wood Walker Incorporated, in settlement of potential claims by the Maryland Securities Commissioner -- including the potential claim that the firm failed to reasonably supervise its former employee, Monica L. Coleman -- agreed to pay $2.1 million into the bankruptcy estates of Coleman and her former brokerage firm, Coleman Craten, LLC. Of that amount, $1.78 million is expected to be distributed on a pro rata basis to Colemanís injured investors.

The settlement, among the Maryland Securities Commissioner, Legg Mason and the Coleman Bankruptcy trustee, represents the culmination of Curran's Securities Division's regulatory inquiry into Legg Masonís oversight of Coleman during her employment at the firm. If approved by the bankruptcy court, Colemanís investors may receive distributions by yearís end, as the parties are seeking an expedited review by the court.

In addition to the payment of the settlement amount, Legg Mason also agreed to enhance certain compliance policies and procedures, including its supervision of registered representatives.

"By law, brokerage firms are required to reasonably supervise their employees, which is critical in an industry where there are extensive opportunities for abuse," Attorney General Curran said. "While brokerage firms cannot always control the actions of an employee determined to engage in fraudulent conduct, they can make it more difficult for that conduct to go unrecognized and undetected by having strong supervisory controls in place."

Coleman, who has been indicted by the Office of the Attorney Generalís Criminal Investigations Division and is scheduled to be tried for securities fraud and other criminal misconduct in January 2002, was a Legg Mason stockbroker for more than 10 years until February 1998. The State alleges that during the latter part of her employment with Legg Mason Coleman defrauded investors -- including some of her Legg Mason clients -- out of hundreds of thousands of dollars, and that Colemanís fraudulent investment activities, which continued after she established Coleman Craten, resulted in millions of dollars in investor losses. In early 1999 both she and Coleman Craten filed for bankruptcy. In late 1999, the Securities Commissioner issued an order, agreed to by Coleman, permanently barring her from the securities and investment advisory business in Maryland.

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