EXHIBIT NO. 99.03

                                           SMITH BARNEY HOLDINGS INC. Form 10-Q
                                           September 30, 1994
                                           Page 16


     In June 1994, several actions relating to trading practices on the National
Association of Securities Dealers Automated Quotation system were filed against
a number of major broker/dealers, including SBI, in various federal courts. In
October 1994, the actions were consolidated in the Federal District Court for
the Southern District of New York. The plaintiffs purport to represent a class
of purchasers of stock trading in that system over the last four years. The
claims generally allege price-fixing violations under the federal antitrust laws
and violations of the federal securities laws relating to the use of even-eighth
price quotes instead of odd-eighth bid and asked quotes. A consolidated amended
complaint is expected to be filed in mid-December 1994. The Company is reviewing
these allegations, believes that it has meritorious defenses and intends to
vigorously defend against these claims.