U.S. SECURITIES AND EXCHANGE COMMISSION


     Litigation Release No.   15738  / May 14, 1998

     Accounting and Auditing Enforcement
     Release No.  1035 / May 14, 1998

     SECURITIES AND EXCHANGE COMMISSION v. PAUL R. SAFRONCHIK, JEROME A.
ADAMO,
     and DOUGLAS A. ROY, Civil Action No. SACV 98-416-LHM  (EEx) (C.D. Cal)

     On May 13, 1998, the Securities and Exchange Commission sued three
former
     officers of an Orange County company in federal court in Santa Ana,
     California, charging them with fraud and insider trading.  The
company,
     Home Theater Products International, Inc. ( HTPI ), which is now in
     bankruptcy, was headquartered in Anaheim, California and had
manufactured
     and sold home theater systems under a license from Paramount Pictures,
a
     movie studio in Hollywood, California.  The Commission alleged that two
of
     the officers, Paul R. Safronchik, HTPI s chairman and chief executive
     officer, and Douglas A. Roy, the company s controller, falsified HTPI
s
     books and records and inflated the company s sales and income.  The
     Commission further alleged that Safronchik and Jerome A. Adamo, the
     president and chief operating officer, caused HTPI to release to the
public
     phony financial statements.  Additionally, the Complaint alleged all
three
     officers committed insider trading by selling HTPI stock with
knowledge
     that the company s financial statements were false.

     The Commission s lawsuit alleges that, from 1993 until October 1995,
     Safronchik and Roy falsified sales in HTPI s books and records.
     Additionally, in an effort to conceal the fraud from the company s
auditor,
     Safronchik rented postal boxes throughout the southwestern United
States
     and used them as mail drops to send and receive bogus audit