FOR IMMEDIATE RELEASE                                          AG
THURSDAY, MAY 22, 1997                             (202) 616-2777
                                               TDD (202) 514-1888

      ATTORNEY GENERAL ANNOUNCES SECOND WAVE OF PROSECUTIONS
                         OF ROGUE BROKERS

     WASHINGTON, D.C. -- Continuing its effort to prosecute
securities brokers who cheat the elderly and the unsuspecting, the
Justice Department today announced a second wave of criminal
charges against a group of so-called "rogue" brokers in 10 states.

     The initiative, unveiled in November 1995, marks the first
nationwide coordinated enforcement effort against rogue brokers. 
In the most recent series of prosecutions, federal prosecutors
charged or convicted 17 brokers in 10 states for engaging in
schemes in which they victimized unsuspecting clients.

     In one case, a Los Angeles investment advisor stole more than
$800,000 from primarily elderly clients, including a victim
investor in her 70s who entrusted her life savings to his care.  In
another case, a former broker at Smith Barney was charged with
embezzling more than $200,000 from twelve clients whom he had
solicited for investments he claimed would earn a high rate of
return.

     Attorney General Janet Reno noted the concern within the
securities community over these abuses. "These abuses are a serious
threat to the economic well being of investors and the investment
industry," said Reno.  "We are committed to eradicating the problem
by vigorously prosecuting these cases."

     The rogue broker initiative was developed by the Justice
Department's Fraud Section and the Financial Crimes Section of the
Federal Bureau of Investigation working with U.S. Attorneys'
Offices, FBI field offices, the SEC Enforcement Division and the
U.S. Postal Inspection Service.  Together they identified cases in
which brokers were alleged to have stolen client funds in varying
amounts, inflicting losses in some instances in the millions of
dollars.  

     "Individuals have entrusted billions of dollars of their
savings to securities professionals.  Those licensed to handle
other people's money will face criminal prosecution it they abuse
their clients' trust," stressed William R. McLucas, Director of the
Enforcement Division of the U.S. Securities and Exchange
Commission. 

     "Maintaining an aggressive investigative and prosecutorial
presence within our capital markets is one of the most effective
means of combating these crimes," said Neil J. Gallagher, Deputy
Assistant Director in charge of the FBI's Criminal Investigative
Division.

     Rogue brokers employ various schemes, including forgery of
investor checks, unauthorized transfers of client funds and false
or fictitious account statements.  Their victims usually included
retired, elderly and disabled investors.  

     U.S. Attorneys participating in cases brought under the
initiative are based in Miami, Tampa, Columbus, Los Angeles,
Brooklyn, Houston, Nashville, Philadelphia, St. Louis, and
Milwaukee.  In addition, the Colorado Attorney General's office
prosecuted a case that was investigated by the Denver office of the
FBI.
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