U.S. SECURITIES AND EXCHANGE COMMISSION

Litigation Release No. 17569 / June 17, 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 5, 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
   Charles Dennis McKittrick ("McKittrick") and Gerald F. Hunter, Jr.
   ("Hunter"). The orders restrained and enjoined McKittrick and Hunter
   from violating Section 17(a) of the Securities Act of 1933, Section
   10(b) of the Securities Exchange Act of 1934 ("Exchange Act") and Rule
   10b-5 thereunder. The order further restrained and enjoined McKittrick
   from violating or aiding and abetting violations of Sections 15(c)(3)
   and 17(a)(1) of the Exchange Act and Rules 15c3-1, 15c3-3, 17a-3,
   17a-5 and 17a-11 thereunder. The Court also ordered a freeze of assets
   held or controlled by McKittrick and Hunter, 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 orders.

   McKittrick and Hunter 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 McKittrick,
   Hunter, Southern Financial Group, Inc. ("Southern"), and Richard M.
   Wooten 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 Investments, Inc. 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 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)