SECURITIES AND EXCHANGE COMMISSION

   Litigation Release No. 16379 / December 6, 1999

, 99 CV. 11772 (S.D.N.Y.)

Securities and Exchange Commission Files Complaint Alleging
That Arthur Bruce Bahlav and Frank J. Fasano Defrauded Investors of
More Than $1.5 Million

   The Securities and Exchange Commission ("Commission") filed an
   injunctive action today in the United States District Court for the
   Southern District of New York against Arthur Bruce Bahlav ("Bahlav")
   and Frank J. Fasano ("Fasano"), both former owners of SFI Investments,
   Inc. ("SFI"), a now defunct broker-dealer.

   The Commission's Complaint alleges that Fasano and Bahlav orchestrated
   a fraudulent scheme through which they defrauded at least 24 SFI
   customers of more than $1.5 million. The Complaint alleges that as
   part of the scheme, Fasano and Bahlav induced the investors to
   purchase unsecured promissory notes from Fasano and Bahlav typically
   with securities the investors owned, by promising to pay the investors
   rates of return on the notes that were significantly higher than the
   rates of return that the underlying securities were yielding. Fasano
   and Bahlav promised to return the investors' securities at the notes'
   maturity.

   The Commission's Complaint further alleges that in soliciting
   investors to purchase the notes, Bahlav made materially false
   statements, and failed to disclose material information, to investors.
   Specifically, Bahlav told investors that if they purchased the notes,
   he and Fasano would not sell the securities the investors used to
   purchase the notes, but would instead use the securities as collateral
   for other SFI investments and to expand SFI's business by opening
   branch offices in several states. Fasano and Bahlav did not use the
   investors' securities as represented. Immediately after the investors
   transferred their securities to Fasano and Bahlav, they liquidated the
   investors' securities and used the proceeds to pay, among other
   things, their personal and business expenses, and to repay earlier
   investors their interest and principal.

   The Commission alleges that Fasano and Bahlav violated Section 17(a)
   of the Securities Act of 1933 and Section 10(b) of the Securities
   Exchange Act of 1934 and Rule 10b-5. The Commission is seeking to
   enjoin Fasano and Bahlav from future violations of these provisions of
   the federal securities laws.
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