year before and knew Mazzochi to be an officer of Mutual and as a person who had accounts in the bank in connection with a contracting business. Kayner recalled that he spoke to Mazzochi only with respect to the first sale, although he acknowledged that the bank's records showed that he had approved two subsequent sales of Treasury Notes for Mazzochi.
According to Kayner, during that first conversation, Mazzochi stated that he was selling the Treasury Note for his family. He approved the sale of the note because he had no reason to believe Mazzochi was not telling the truth or did not have the right to sell the note. The approval was verbal at that time.
Santoro routinely called the Federal Reserve Bank in New York to inquire whetherquestion about those sales. By this time Kayner had left the 149th Street branch. As a consequence Santoro referred Mazzochi to Edward I. McGraw another officer of Royal for approval of the sale. Santoro informed McGraw of the prior sales and this sale was approved by McGraw. The same procedure was then followed by Santoro and McGraw. The 12 bonds were sold on September 12, 1966 for $71,698.70. McGraw had known Mazzochi for almost two years in September 1966 and was on a first name basis with him. McGraw discussed the transactions with Mazzochi and asked him if the notes were his to which Mazzochi replied that they were. McGraw unfortunately died during the pendency of this action and consequently only his pretrial deposition was available to the