U.S. Securities & Exchange Commission

   Litigation Release No. 16340 / October 21, 1999

   Securities and Exchange Commission v. Richard K. Wells, U.S. District
   Court For The District Of Columbia (MS-99-252 (EGS))

   COURT JAILS WITNESS FOR IGNORING SEC SUBPOENAS AND COURT ORDER
   ENFORCING THE SUBPOENAS

   Richard K. Wells, a witness subpoenaed by the Securities and Exchange
   Commission ("Commission") in one of its investigations, was
   incarcerated on October 19, 1999 for ignoring two Commission subpoenas
   and a Court order enforcing those subpoenas. At 9 30 a.m. that day,
   Respondent Wells appeared pro se at a hearing to show cause why he
   should not be held in contempt for failing to obey the Court's order
   enforcing the Commission's subpoenas. Wells failed to show cause why
   he should not be held in contempt, and failed to respond when the
   Court asked him if he intended to obey its Order. The District Court
   Judge ordered the United States Marshals to immediately take Wells
   into custody in the courtroom, and Wells was led from the courtroom in
   handcuffs.

   Wells' incarceration resulted from his failure to obey two Commission
   subpoenas issued on May 12, 1999, requiring him to produce documents
   and appear for testimony. After Wells failed to obey its subpoenas, on
   July 29, 1999, the Commission filed a subpoena enforcement action in
   the United States District Court for the District of Columbia. At a
   hearing held on September 17, 1999, Wells asserted various objections
   to the subpoenas that the Court found were "totally frivolous" and
   "devoid of merit." The Court ordered Wells to produce documents on
   September 24, 1999, and to appear at the Commission's Washington
   offices for testimony on October 1, 1999.

   Wells filed a notice of an appeal, and sought immediate
   reconsideration and a stay of the District Court's Order which was
   denied on September 23, 1999. Nevertheless, Wells failed to produce
   documents on September 24. On September 30, Wells sought a stay of the
   District Court's Order from the Court of Appeals for the District of
   Columbia. The Commission promptly responded, and the Court of Appeals
   denied Wells' motion for a stay on the morning of October 1, prior to
   the time Wells had been ordered to testify. Despite the fact that his
   request for a stay had been rejected, Wells failed to appear for
   testimony as required by the District Court's Order.

   On October 4, the Commission moved for an order for Wells to show
   cause why he should not be held in contempt of Court.