SECURITIES AND EXCHANGE COMMISSION

   LITIGATION RELEASE NO. 16305 / SEPTEMBER 28, 1999

   ACCOUNTING AND AUDITING ENFORCEMENT
   RELEASE NO. 1175

   SEC V. ITEX CORPORATION, TERRY L. NEAL, MICHAEL T. BAER, GRAHAM H.
   NORRIS, CYNTHIA PFALTZGRAFF AND JOSEPH M. MORRIS, CIV. NO. 99-1361
   (HA) (D. Ore. September 27, 1999)

   SEC FILES FRAUD CASE AGAINST ITEX CORPORATION

   On September 27, 1999, the Securities and Exchange Commission filed a
   civil fraud action in the United States District Court for the
   District of Oregon against Itex Corporation ("Itex"), Terry L. Neal,
   Michael T. Baer, Graham H. Norris, Cynthia Pfaltzgraff and Joseph M.
   Morris (Civil Action 99-1361-HA). The Commission's complaint alleges
   that from at least December 1993 through February 1998, Itex, a
   company engaged in the barter exchange business and formerly listed on
   the NASDAQ Small Cap Market, materially inflated its revenues and
   earnings in financial statements filed with the Commission and in
   other disclosures made to the investing public. The Complaint alleges
   that Terry Neal, Itex's founder and control person orchestrated and
   implemented a broad-ranging fraudulent scheme by making materially
   false and misleading disclosures about the company's business and by
   failing to disclose numerous suspect and in many cases sham barter
   deals between Itex and various mysterious offshore entities related to
   and/or controlled by Neal. Neal was assisted in the fraud scheme by
   various people who, at the time, were members of Itex management,
   specifically, Michael Baer, Graham Norris, Joseph Morris and Cynthia
   Pfaltzgraff.

   The Complaint alleges that the defendants defrauded Itex investors by
   bartering assets of little or no value and by designating the value of
   many of Itex's assets and transactions in "trade dollars" rather than
   their far lower U.S.-dollar fair market values on its financial
   statements. On the Itex Exchange, members trade goods and services. In
   lieu of trading (or bartering) such goods and services directly,
   Exchange members use Itex trade dollars, issued to them by the Itex
   Exchange. Itex corruptly took advantage of the process, however, by
   orchestrating numerous bogus barter deals, in which the goods and
   services exchanged were grossly overvalued, and then reported in Itex
   public filings as income and/or assets, thus facilitating the fraud.

   The Complaint alleges that Itex reported substantial revenue from sham
   barter transactions as a principal in its own name or through its
   Swiss-based subsidiary, Associated Reciprocal Traders ("ART"). In