SECURITIES AND EXCHANGE COMMISSION

Litigation Release No. 17574 / June 19, 2002

   Securities and Exchange Commission v. Southern Financial Group, Inc.,
   Richard M. Wooten, Charles Dennis McKittrick and Gerald F. Hunter,
   Jr., Defendants, and Springdale Investments, Inc., Relief Defendant,
   United States District Court for the District of South Carolina,
   Charleston Division, Civil Action File No. 2 02-1806-18

   The Securities and Exchange Commission ("Commission") announced that
   on June 10, 2002, the Honorable David C. Norton, United States
   District Judge for the District of South Carolina, Charleston
   Division, entered orders of preliminary injunction and other relief as
   to defendants Southern Financial Group, Inc. ("Southern") and Richard
   M. Wooten ("Wooten") and relief defendant Springdale Investments, Inc.
   ("Springdale"). The orders restrained and enjoined Southern and Wooten
   from violating Section 17(a) of the Securities Act of 1933, Section
   10(b) of the Securities Exchange Act of 1934 and Rule 10b-5
   thereunder. The Court also ordered a freeze of assets held or
   controlled by Southern, Wooten and Springdale, and required them to
   submit accountings of all monies received from the scheme and of the
   disposition and use of said funds. The accountings are to be submitted
   to the Court within 30 days of the date of the Court's order.

   Southern, Wooten and Springdale consented to the relief without
   admitting or denying the allegations set forth in the Commission's
   complaint, filed on May 24, 2002. The complaint alleged that
   defendants Southern, Wooten, Charles Dennis McKittrick, and Gerald F.
   Hunter, Jr. raised at least $25 million through a fraudulent scheme
   involving the sale of short-term notes on behalf of UC Properties LLC.
   The complaint alleged that the defendants operated these note
   offerings as a Ponzi scheme, using funds raised from current note
   offerings to pay principal and interest to investors in prior
   offerings, and that at least $5 million was transferred to relief
   defendant Springdale. The complaint further alleged that Southern
   operated in violation of the net capital rule since at least October
   2001, and that the firm's FOCUS reports and other books and records
   have been inaccurate since that time.

   On May 24, 2002, the Court entered an order for the defendants and
   relief defendant to show cause as to why a preliminary injunction
   pursuant to Rule 65 of the Federal Rules of Civil Procedure should not
   be granted, as requested by the Commission.

   See also (May 28, 2002); (June 17, 2002).
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