SECURITIES AND EXCHANGE COMMISSION
Washington, D.C.

LITIGATION RELEASE NO. 17214 / October 31, 2001

   UNITED STATES V. FRANK L. HARRIS, III, 4 01CR, USDC, EDTX (Sherman
   Division)

   SECURITIES AND EXCHANGE COMMISSION v. FRANK L. HARRIS, III, (U.S.D.C.,
   Eastern District of Texas, Sherman Division, Civil Action No. CA 4
   01CV117)

           DALLAS STOCKBROKER SENTENCED FOR DEFRAUDING CUSTOMERS

   On October 26, 2001, Judge Paul Brown, United States District Court
   for the Eastern District of Texas, Sherman Division, sentenced Frank
   L. Harris, III ("Harris"), a former registered representative of
   Josephthal & Co., Inc.'s Addison, Texas branch, to serve 46 months in
   federal prison and to three years of supervised release. Additionally,
   Judge Brown ordered him to pay restitution of $1,619,847.70. Judge
   Brown ordered Harris taken into custody immediately.

   On June 29, 2001, Harris pleaded to one count of federal securities
   fraud resulting from a criminal information brought by the U.S.
   Attorney's Office in which he admitted to stealing funds from 19
   customers. From January 2000 until March 2001, Harris diverted money
   from his customers using three schemes 1) by falsely representing that
   their funds would be used to purchase a particular security; 2) by
   borrowing against securities in the customers' margin accounts without
   their authorization; and 3) by liquidating their securities without
   their authorization. Harris' schemes were uncovered when he failed to
   report to work and fled to Cancun, Mexico.

   Harris' plea was based upon the same conduct alleged in the
   Commission's complaint filed on April 6, 2001 that charged him with
   violating the antifraud provisions found in Section 17(a) of the
   Securities Act of 1933, Section 10(b) of the Securities and Exchange
   Act of 1934 and Rule 10b-5 thereunder. The complaint sought
   preliminary and permanent injunctions, disgorgement with prejudgment
   interest and a civil money penalty against Harris, as well orders for
   an asset freeze, an accounting, the prohibition of the movement,
   alteration and destruction of books and records and expedited
   discovery. In the Commission's action, Judge Brown issued Orders
   against Harris Freezing Assets, Directing the Repatriation of Funds
   and Surrender of Passport, Requiring an Accounting, Requiring
   Preservation of Documents and Authorizing Expedited Discovery. The
   Commission's action is still pending.
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