U.S. SECURITIES AND EXCHANGE COMMISSION

   Litigation Release No. 16698 / September 12, 2000

   SECURITIES AND EXCHANGE COMMISSION v. REGALD B. SMITH,
   Civil Action No. 7 00 cv 358 (E.D. Ky.) (Hood, J.)

   The Securities and Exchange Commission ("Commission") announced that
   on September 7, 2000, Judge Joseph M. Hood of the United States
   District Court for the Eastern District of Kentucky entered an order
   of permanent injunction against Regald B. Smith ("Smith") of
   Pikeville, Kentucky, pursuant to Smith's consent, without admitting or
   denying the Commission's charges, enjoining Smith from violating the
   antifraud provisions of the federal securities laws, freezing Smith's
   assets, ordering him to account for and disgorge his ill-gotten gains
   and pay civil penalties in amounts to be determined, provide the
   Commission with expedited discovery and prohibiting the destruction of
   documents.

   The Commission filed suit against Smith a day earlier seeking
   emergency relief in the form of a Temporary Restraining Order and
   asset freeze, among other things. In its complaint, the Commission
   accused Smith, a registered representative in Stifel Nicolaus's
   ("Stifel") Pikeville, Kentucky office, of perpetrating an 18-month
   scheme to defraud in which he misappropriated more than $5 million
   from at least 6 investors who were his brokerage clients. On August
   28, 2000, Smith confessed to senior Stifel officials that he had
   conducted the scheme by conning clients into purchasing fictitious
   bonds, then diverting to his personal use the funds they gave him to
   invest.

   The Commission alleged that Smith, age 55, was, employed by Stifel as
   the Investment Executive in charge of the Firm's Pikeville, Kentucky
   office. Smith stole his clients' funds by luring them into believing
   he had a "special situation" he could offer them. He told them that
   other Stifel Nicolaus clients' were interested, for one reason or
   another, in selling short-term bonds from their portfolio. The bonds
   were particularly attractive not only because they were short term,
   but also because they were tax-free and promised high yields. After
   his victims gave him money to purchase the bonds, Smith simply
   diverted their funds to his own personal use, including the renovation
   of the Hotel Anthony in Pikeville. To conceal his deceit, Smith told
   at least one of his victims at or about the time the first bond he
   sold to them was about to mature, that he could reinvest the client's
   original investment, plus accrued interest, into another tax-free
   bond. Smith's repeated this ploy until the victim had written and
   given Smith checks totaling $3.8 million, all of which Smith
   misappropriated. Smith also admitted that he tried to cover-up his