UNITED STATES SECURITIES AND EXCHANGE COMMISSION

     LITIGATION RELEASE NO. 15420 / July 24, 1997

     SECURITIES AND EXCHANGE COMMISSION v. STUART GREGORY SMITH AND
CAPITAL
     INVESTMENT MANAGERS, INC.
     497-CV 545-A, USDC, ND/TX (Fort Worth Division)

          The Securities and Exchange Commission ("Commission") announced
that
     on July 7, 1997, it filed a complaint in United States District Court
in
     Fort Worth, Texas, seeking a permanent injunction against Stuart
Gregory
     Smith and Capital Investment Managers, Inc. ("CIMI"), a broker-dealer
     registered with the Commission.  In its complaint, the Commission
alleges
     that, from July 1992 through October 1993, defendants caused twenty
six
     separate CIMI customer accounts to purchase approximately $7.5 million
of
     privately-placed Water Point Systems, Inc. ("Water Point"), debt
securities
     and that defendants subsequently exchanged some of these securities
for
     other Water Point securities with less favorable terms.  The
Commission
     further alleges that defendants executed many of these transactions
without
     the knowledge or consent of the CIMI customers and by forging, or
causing
     to be forged, customer signatures.  Water Point, a Fort Worth, Texas
     company, marketed and distributed home and office water purification
     equipment.  Defendant Smith served as a Water Point director from
November
     1992 through March 1995 and, together with his wife, beneficially
owned
     12.5 percent of Water Point's outstanding common stock.  On March 10,
1995,
     Water Point filed a Chapter 11 bankruptcy petition, which was later
     converted to a Chapter 7 liquidation.  Water Point investors holding
common