SECURITIES AND EXCHANGE COMMISSION

   Litigation Release No. 16395/ December 21, 1999

   , Civil Action No. 99 Civ. 12256 (S.D.N.Y.) (MBM) (filed December 21,
   1999)

SEC Sues Former Chairman and CEO of Investment Banking Firm for Illegally
Providing Insider Information on Six Deals

   On December 21, 1999, the Securities and Exchange Commission filed a
   civil injunctive action in the United States District Court for the
   Southern District of New York, against James J. McDermott, Jr., the
   former Chairman and Chief Executive Officer of Keefe, Bruyette &
   Woods, Inc., an investment banking firm, and two other individuals for
   insider trading. The complaint alleges that McDermott provided
   material nonpublic information concerning at least six merger
   transactions to Kathryn B. Gannon, who in turn tipped a friend,
   Anthony P. Pomponio.

   The complaint alleges that from at least June 1997 through April 1998,
   McDermott, as Chairman and CEO of Keefe, Bruyette, obtained material
   nonpublic information in advance of merger transactions. During that
   time, McDermott and Gannon were involved in a relationship. According
   to the complaint, McDermott provided to Gannon the inside information
   he obtained at Keefe. Gannon then purchased securities in relatively
   unknown regional banks. Gannon purchased stock in Central Fidelity
   Banks, Inc., First Commerce Corp., California State Bank (West
   Covina), First Commercial Corp., Advanta Corporation, and Barnett
   Banks, Inc. Each of the banks whose stock Gannon traded was either
   involved in merger negotiations with potential suitors or actually
   consummated a merger transaction contemporaneously with her trading.
   In addition, with respect to all but one of Gannon's bank stock
   purchases, Keefe, Bruyette represented the target in the merger
   transaction or was otherwise associated in some way with one of the
   parties to the transaction. As a result of her illegal trading, Gannon
   made profits of at least $88,135. In addition, during the period
   September 3, 1997 through September 23, 1998, McDermott transferred at
   least $37,000 to Gannon in the form of certified checks and wire
   transfers.

   The complaint also alleges that Gannon tipped Pomponio, to whom she
   boasted that she had escort clients in New York City who were "well
   connected Wall Street types," including lawyers, stockbrokers and
   other "high level people." Pomponio, with knowledge of the reliability
   of the material nonpublic information concerning pending mergers
   obtained from Gannon, traded in advance of five of the merger
   transactions, reaping profits of at least $86,378.