United States Securities and Exchange Commission

LITIGATION RELEASE NO. 17181 / October 11, 2001

   UNITED STATES v. FRANK L. PEITZ, DANIEL B. BENSON, PETER A. LOUTOS,
   SR., ROBERT D. PALADINO, RANDALL W. LAW, and MONICA M. ILES, Criminal
   Action No. 01CR0852 (N.D. Ill., Eastern Division)

   On October 9, 2001, a grand jury in the U.S. District Court for the
   Northern District of Illinois (Eastern Division) returned an
   indictment against Frank L. Peitz, Daniel B. Benson, Peter A. Loutos,
   Sr., Robert D. Paladino, Randall W. Law and Monica M. Iles. The
   indictment arises from the offer and sale of a fraudulent prime bank
   trading program through Lennox Investment Group, Ltd., an entity owned
   and controlled by Law, and the subsequent misappropriation of funds
   collected from investors. The indictment charges each defendant with
   eight counts of wire fraud and further charges Peitz, Benson, Loutos
   and Paladino with seven counts each of money laundering and one count
   each of conspiracy to commit money laundering.

   The indictment charges that the defendants raised over $11 million
   from at least 30 investors through the offer and sale of a purported
   "Small Investment High-Yield Program." The defendants obtained
   investor funds through material misstatements and omissions, including
   the following (1) investor funds would be used in the international
   trading of bank instruments; (2) investor funds would be held in an
   escrow account or that collateral of equal value would insure the
   safety of investor funds; (3) investor principal was guaranteed; (4)
   investors would receive returns of 122 per cent per week for forty
   weeks during the one year term of their investment; and (5) the
   trading program was regulated and approved by governmental entities
   such as the Federal Reserve or by the International Monetary Fund. In
   fact, the indictment charges, the purported trading program did not
   exist and investor funds were not used to trade banking instruments.
   Rather, the defendants systematically disbursed investor funds for the
   benefit of themselves and their designees.

   The indictment is based on the same conduct alleged in a civil action
   brought by the Commission's Fort Worth District Office in June 1998.
   (, USDC/ND/TX (Fort Worth Division), Civil Action No. 498-CV-536-Y).
   The Commission's complaint, filed June 22, 1998, alleged that Peitz,
   Benson, Law, and Iles, among others, violated the antifraud and
   securities registration provisions of the federal securities laws by
   engaging in the scheme described in the October 9, 2001 indictment.
   Specifically, the Commission complaint charged these defendants with
   violations of 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. The Commission's complaint named Paladino, among