SECURITIES AND EXCHANGE COMMISSION
Washington, D.C.

Litigation Release No. 17365 / February 19, 2002

   Securities and Exchange Commission v. Don Haywood Pace (Civ. No.
   96-2416) (USDC/DC)

   On January 28, 2002, the United States District Court for the District
   of Columbia entered a Final Judgment of Permanent Injunction against
   Don Haywood Pace. Don Pace was the chief executive officer and a
   director of Pace American Group, Inc., a holding company that wrote
   surety bonds and insurance products through wholly-owned subsidiaries.
   Pace American and its chief financial officer had previously been
   sanctioned in settled actions.

   The Commission filed this civil lawsuit against Pace in October 1996.
   The complaint alleged violations of the antifraud, proxy, books and
   records and other provisions of the federal securities laws. The
   Commission's lawsuit was stayed for several years pending the outcome
   of Pace's criminal trial in U.S. District Court in Tucson, Arizona on
   related criminal charges. After a jury trial in the criminal case in
   late 2000, Pace was convicted on some wire fraud and tax fraud
   charges, and acquitted on others. He was found to have diverted for
   his own use more than $36,000 in bond premiums that a Mexican surety
   insurance company had deposited into two of the company's corporate
   financial accounts in Mexico. On July 23, 2001, the criminal court
   sentenced Pace to serve four months in prison and four months house
   arrest, and it ordered him to pay restitution of the $36,659.28 that
   he was found to have taken from Pace American. Pace has appealed his
   criminal conviction.

   Following the criminal trial, the Commission amended its civil
   complaint, leaving the two allegations on which Pace was tried
   criminally. The Commission then sought summary judgment on the
   allegation related to the criminal conviction. On November 29, 2001,
   United States District Judge James Robertson granted summary judgment
   in favor of the Commission on that allegation. The court ruled that
   Pace had committed antifraud violations by failing to disclose in Pace
   American's annual reports, proxy materials and registration statements
   filed with the Commission that he had received these bond premiums,
   and that Pace had caused Pace American to maintain false books and
   records because he failed to have the company's books and records
   reflect that he diverted these bond premiums to his personal bank
   account. Accordingly, on January 28, 2002, the court entered a Final
   Judgment of Permanent Injunction enjoining Pace from violating Section
   17(a) of the Securities Act of 1933 and Sections 10(b), 13(b)(5) and
   14(a) of the Securities Exchange Act of 1934 and Rules 10b-5, 12b-20,