SECURITIES AND EXCHANGE COMMISSION

   Litigation Release No. 16315 / September 29, 1999

   Securities and Exchange Commission v. HGI, Inc., Mark Hanna, Brian
   Scanlon, Stephen Palumbo, Angelo John Bosco, Thomas Fede, Shane
   Ferras, Scott Follett, Joseph Tuozzo, Steven Arevalo, Steven Hanna,
   Paul Karkenny, Robert Palumbo, and Raymond Saulon, 99 Civ. 3866 (DLC)
   (S.D.N.Y.)

   The Securities and Exchange Commission announced that on September 24,
   1999, the Honorable Denise L. Cote of the United States District Court
   for the Southern District of New York entered a Final Judgment By
   Default against defendant HGI, Inc. ("HGI"), a registered
   broker-dealer. The Final Judgment permanently enjoins HGI from 1)
   violating the anti-fraud provisions; 2) failing to deliver
   prospectuses to customers who purchase stock; and 3) effecting
   securities transactions through employees who are unregistered
   brokers, in violation of Sections 5(b) and 17(a) of the Securities Act
   of 1933, and Sections 10(b) and 15(b)(7) of the Securities Exchange
   Act of 1934, and Rules 10b-5 and 15b7-1 and Rules 101 and 102 of
   Regulation M, thereunder. The court ordered HGI to pay more than $90
   million, representing disgorgment of $68,657,246 in illegal profits
   plus prejudgment interest of $21,601,227.83.

   The Commission's Complaint, filed on May 27, 1999, charged HGI and 13
   of its registered representatives with systematically defrauding
   investors of millions of dollars by using fraudulent "boiler-room"
   sales practices to induce investors to purchase highly speculative
   securities that were issued in initial public offerings underwritten
   by the brokerage firm or securities for which the firm acted as a
   market maker.

   Litigation against the 13 individual defendants is pending.
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Modified 10/05/1999