SECURITIES AND EXCHANGE COMMISSION
   Washington, D.C.

   Litigation Release No. 16634 / July 24, 2000

   Accounting and Auditing Enforcement Release No. 1288 / July 24, 2000

   SECURITIES AND EXCHANGE COMMISSION v. TIMOTHY J. GAFFNEY, Case No. 1
   00CV01725 (RMU) (U.S.D.C., D.D.C.)

   SEC ANNOUNCES SETTLED ENFORCEMENT PROCEEDINGS AGAINST GUILFORD MILLS,
   INC. AND TIMOTHY J. GAFFNEY

   The Securities and Exchange Commission today announced settled
   enforcement proceedings against Guilford Mills, Inc., a textile
   company based in Greensboro, North Carolina, and Timothy J. Gaffney,
   the former controller of Guilford's Hofmann Laces subsidiary in
   Cobleskill, New York. The Commission filed a securities fraud
   complaint against Gaffney in the United States District Court for the
   District of Columbia and issued an administrative cease-and-desist
   order against Guilford.

   In its complaint against Gaffney, the Commission alleged that Gaffney
   made a series of false accounting entries in 1997 and 1998 while
   employed as controller of Guilford's Hofmann Laces subsidiary, which
   Guilford had acquired in January 1996. According to the complaint,
   Gaffney's false entries materially understated accounts payable and
   materially overstated earnings for Hofmann Laces, which in turn caused
   Guilford's consolidated operating results to be materially overstated
   in the financial statements included in Guilford's quarterly reports
   on Form 10-Q filed with the Commission for the quarters ended December
   28, 1997, March 29, 1998, and June 28, 1998. Without admitting or
   denying the allegations of the Commission's complaint, Gaffney
   consented to entry of a judgment that enjoins him from violating the
   antifraud, internal accounting controls, and record-keeping provisions
   of the Securities Exchange Act of 1934 (Sections 10(b) and 13(b)(5)
   and Rules 10b-5 and 13b2-1 thereunder), and orders him to pay a
   $25,000 civil penalty.

   In the related administrative proceeding against Guilford, the
   Commission found that Guilford failed to implement and maintain
   adequate internal accounting controls following its acquisition of
   Hofmann Laces, which allowed Gaffney's false entries to go undetected
   and resulted in books and records that did not accurately and fairly
   reflect Guilford's transactions and asset dispositions. Based on those
   findings, the Commission issued an order finding that Guilford
   violated the periodic reporting, internal accounting controls, and
   record-keeping provisions of the Exchange Act (Sections 13(a) and