SECURITIES AND EXCHANGE COMMISSION

Litigation Release No. 16962 \ April 16, 2001
Accounting and Auditing Enforcement Release No. 1381 \ April 16, 2001

   SECURITIES AND EXCHANGE COMMISSION V. JOHN N. BRINCAT, Sr. and BRADLEY
   VALLEM, U.S. District Court for the Northern District of Illinois,
   Civil Action No. 01 - C - 2670 (N.D. Ill. April 16, 2001)

   On April 16, 2001, the Commission filed financial fraud charges in the
   United States District Court for the Northern District of Illinois
   against John N. Brincat, Sr. (Brincat), the former CEO of Mercury
   Finance Co. (Mercury), and Bradley Vallem (Vallem), Mercury's former
   Treasurer. The Complaint seeks a permanent injunction and civil
   penalties against Brincat and Vallem. The Complaint also seeks an
   order requiring Brincat to disgorge his ill-gotten gains and barring
   him from serving as an officer or director of a public company.

   In its Complaint, the Commission alleges that, in 1996, Brincat
   instructed Mercury employees to refrain from charging off
   approximately $26 million in loan losses incurred when automobiles
   were repossessed and subsequently sold. In addition, the Complaint
   alleges that, again in 1996, Brincat instructed Mercury employees to
   refrain from charging off more than $24 million in loan losses that
   should have been charged off because the loans were more than 150 days
   past due. As a result of this improper reporting of loan losses,
   Mercury filed with the Commission, and disseminated to the public,
   fraudulent quarterly financial statements in May, August and November
   of 1996 and overstated its annual income in January 1997. The
   Commission also alleges that in early 1996, Vallem learned that
   Mercury employees falsified a bank statement to cover-up a sham
   transaction that affected Mercury's reported commercial paper balance.
   Despite his knowledge of this and other wrongdoing, Vallem signed the
   fraudulent quarterly filings. Finally, the Complaint alleges that
   Brincat committed, and aided and abetted, violations of various books
   and records provisions.

   The Complaint seeks entry of a Final Judgment enjoining both Brincat
   and Vallem from future violations of Section 17(a) of the Securities
   Act, Section 10(b) of the Exchange Act and Rule 10b-5 thereunder and
   enjoining Brincat from future violations, and aiding and abetting
   violations, of Sections 13(b)(2)(A) and 13(b)(2)(B(ii) of the
   Securities Act and Section 13(b)(5) of the Exchange Act. The Complaint
   also seeks to require both defendants to pay civil penalties pursuant
   to Section 21A of the Exchange Act. Finally, the Complaint seeks
   disgorgement of ill-gotten gains against Brincat and an order barring
   him from acting as an officer or director of a public company.