SECURITIES AND EXCHANGE COMMISSION

   Litigation Release No. 16312 / September 28, 1999

Securities and Exchange Commission v. Chelsea Associates, Inc. and Rondall
Harris, Civil Action No. 99-4595 (JEB) (D.N.J.)

   The Securities and Exchange Commission announced today, that on
   September 27, 1999, it filed a complaint in federal district court in
   Newark, New Jersey charging that Chelsea Associates, Inc. and Rondall
   Harris of Franklin Park, New Jersey engaged in a fraudulent scheme
   whereby they obtained at least $2.8 million from more than 375
   investors throughout the country.

   The Commission's complaint charges that the defendants offered and
   sold securities without registering those securities with the
   Commission, made numerous false representations to investors including
   that they could expect profits of as much as a 300 percent without any
   risk to their principal investment, and that Chelsea Associates failed
   to register with the Commission as an investment company. The
   Commission's complaint further alleges that the defendants targeted
   their solicitations primarily to African-American investors by falsely
   claiming that investing through Chelsea Associates would afford
   investors an opportunity to participate in investment opportunities
   and substantial profits historically not available to African-American
   investors. The Commission's complaint alleges that, in reality, the
   defendants invested funds they raised in a series of speculative
   investments, and that Harris misappropriated some of those investor
   funds to pay his own personal expenses.

   Without admitting or denying the Commission's allegations, Chelsea
   Associates and Harris have consented to the entry of a judgment which
   permanently enjoins each of them from violating Section 5(a), 5(c) and
   17(a) of the Securities Act of 1933, and Section 10(b) of the
   Securities Exchange Act of 1934 and Rule 10b-5 thereunder. In
   addition, the judgment permanently enjoins Harris from violating
   Sections 206(1) and 206(2) of the Investment Advisers Act of 1940, and
   permanently enjoins Chelsea Associates from violating Section 7(a) of
   the Investment Company Act of 1940. The judgment reserves the issue of
   the amount of disgorgement that the defendants will pay, as well as
   the amount of any civil penalty to be paid by Harris. The defendants
   also consented to the entry of an order freezing all of their assets
   to prevent the dissipation of funds that belong to Chelsea Associates
   investors.
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Modified 10/05/1999