GERARD GROUP INTERNATIONAL INC


October 19, 2004 Bulletin

ALERT:
Industry Leaders at Greater Risk

October 19, 2004 -- Early Tuesday morning in Baghdad, British-Iraqi Margaret Hassan, Director of Operations of CARE in Iraq, was abducted by terrorists. Her kidnapping signals the beginning of a dramatic change in tactics about which we have been warning our clients for some time.

The kidnapping of foreign contractors and activists in Iraq has produced a singular lack of traction with governments that refuse to negotiate with terrorists. The ensuing gruesome murders, videotaped for our viewing horror, have been insufficient leverage for the terrorists to have their demands met. They have therefore raised the ante, putting all senior management of global organizations at risk.

Our analysts anticipate an elevation in such events, and a geographic proliferation to include western countries (including the US) and the heads of major global companies. We are tracking these events and will continue to provide updates as necessary.