SECURITIES AND EXCHANGE COMMISSION
Washington, D.C.

Litigation Release No. 17223 / November 6, 2001

   JURY FINDS MICHAEL G. SARGENT AND DENNIS J. SHEPARD LIABLE FOR INSIDER
   TRADING IN PUROLATOR PRODUCTS COMPANY STOCK

   SECURITIES AND EXCHANGE COMMISSION v. MICHAEL G. SARGENT, et al., Civ.
   No. 96-10609-NG (D. Mass. Nov. 1, 2001)

   On November 1, 2001, a jury found that defendants Michael G. Sargent
   and Dennis J. Shepard violated section 14(e) of the Securities
   Exchange Act of 1934 ("Exchange Act") and Exchange Act rule 14e-3 in
   connection with trading in the common stock of Purolator Products
   Company. In its complaint, the Commission had alleged that, in
   September 1994, Sargent, Shepard, and a third defendant, Robert J.
   Scharn violated sections 10(b) and 14(e) of the Securities Exchange
   Act of 1934 and Exchange Act rules 10b-5 and 14e-3 by tipping or
   trading in Purolator common stock based on material, nonpublic
   information about a proposed tender offer for Purolator stock by Mark
   IV Industries, Inc. According to the complaint, Shepard tipped Sargent
   about the transaction. Sargent then bought Purolator common stock and
   tipped Scharn, who also bought the stock. In addition to finding that
   Sargent and Shepard violated section 14(e) and rule 14e-3, the jury
   found that Sargent violated section 10(b) and rule 10b-5. The jury,
   however, found that Shepard did not violate section 10(b) or rule
   10b-5 and that Scharn did not violate section 10(b) or 14(e) or rule
   10b-5 or 14e-3. The Court will hold further proceedings concerning
   remedies.

   Previously, in a related criminal trial, a jury convicted Sargent and
   Scharn of willfully making false statements in violation of 18 U.S.C.
   § 1001 to attorneys at the Commission in connection with the
   Commission's inquiry into possible insider trading in Purolator
   securities. Thereafter, in the Commission's civil action against
   Sargent, Shepard, and Scharn, Judge Joseph Tauro of the United States
   District Court for the District of Massachusetts granted a motion for
   judgment as a matter of law in favor of the defendants and against the
   Commission. The United States Court of Appeals for the First Circuit
   subsequently reversed that decision and remanded the case for a new
   trial, which resulted in the verdict rendered on November 1, 2001.

   See also Litigation Releases Nos. , , , and .
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Modified 11/07/2001