Securities and Exchange Commission

   Litigation Release No. 16313 / September 29, 1999

Securities and Exchange Commission v. Dr. Alan Brody,
99 Civ. 02579 (HHK) (DDC) (September 29, 1999)

SEC Sues Psychiatrist for Insider Trading

   On September 29, 1999, the Securities and Exchange Commission filed a
   complaint in the United States District Court for the District of
   Columbia against Dr. Alan Brody, a psychiatrist licensed to practice
   in Maryland, New York and the District of Columbia. The Commission's
   complaint alleges that Dr. Brody engaged in insider trading based on
   information he misappropriated from a patient, an officer of Penril
   DataComm Networks, Inc. who knew of an upcoming business combination
   involving Penril and Bay Networks Incorporated.

   The complaint specifically alleges that on June 11, 1996, the patient
   had a 45-minute doctor's appointment with Dr. Brody starting at 1 00
   p.m. During that appointment, the patient, who had recently been told
   by Penril's executive vice president of the proposed combination so
   that the patient could assist in performing certain due diligence
   tasks, told Dr. Brody about the upcoming acquisition. The complaint
   alleges that the patient believed that the information he confided to
   Dr. Brody during his professional treatment, including information
   regarding the proposed business combination involving Penril and Bay,
   would be held in confidence and would not be used by Dr. Brody for his
   own personal benefit. Nevertheless, within 15 minutes after the
   appointment ended, Dr. Brody began to purchase Penril common stock. On
   that day and the next, Dr. Brody purchased a total of 15,000 shares of
   Penril stock through two different brokerage firms.

   Several days later, on June 17, 1996, Penril and Bay publicly
   announced that Penril would spin off a business unit to its
   shareholders and sell the remainder of its business to Bay in a stock
   transaction valued at $120 million. The announcement caused Penril's
   stock price to increase from $10.00 to $13.625 per share, or 36.25
   percent. Dr. Brody reaped $38,000 in profits when he sold his shares
   shortly after the public announcement.

   Simultaneous with the filing of the Complaint, Dr. Brody consented,
   without admitting or denying the allegations of the Complaint, to the
   issuance of a final judgment permanently enjoining him from violating
   the antifraud provisions of the federal securities laws, Section 10(b)
   of the Securities Exchange Act of 1934 and Rule 10b-5 promulgated
   thereunder, and ordering him to pay $87,558.06, representing
   disgorgement of his illegal profits, prejudgment interest thereon, and