UNITED STATES SECURITIES AND EXCHANGE COMMISSION

LITIGATION RELEASE NO. 17548 / June 10, 2002

   , CIVIL ACTION NUMBER CIV-H-00-1827 (USDC/Southern District of Texas).

   The Commission announced a settlement today in a nationwide ponzi
   scheme in which over $13.5 million was raised from 140 mostly elderly
   Texas investors. Under the terms of the settlement, defendants Edward
   Neel Cox, Billy Wayne Sparkman, Joseph Lee Covington, Charles
   Frederick Johnson, Stephen T. Hoyl, Danny R. Mayfield, Randy J. Post
   and Benny Armond Sides, agreed to a permanent injunction against
   future violations of the securities laws. Previously, in a South
   Carolina criminal proceeding, all were ordered to disgorge commissions
   each received from their participation in the ponzi scheme. The
   Commission decided not to seek a civil penalty against Cox, Sparkman,
   Covington, Hoyl, Post and Sides based upon their sworn representations
   regarding financial status in documents submitted to the Commission.
   Johnson consented to pay a penalty of $10,000. The Commission decided
   not to seek the imposition of a civil monetary penalty against
   Mayfield because of his significant cooperation with the Commission
   and his efforts to help his clients who were victimized by the ponzi
   scheme.

   In its civil action, the Commission alleged that defendants sold
   promissory notes issued by Chemical Trust, a purported business trust,
   as part of a nationwide ponzi scheme. The promissory notes were
   claimed to be secured by surety bonds issued by United States
   Guarantee Corporation, an Arizona based surety company. In reality,
   the control persons behind Chemical Trust were diverting investor
   funds to their own use and the surety company was being run by a
   convicted felon and held no assets with which to secure the promissory
   notes. The Commission alleged that the defendants were in a position
   to learn of the issuer's fraudulent scheme, but failed to conduct any
   meaningful due diligence before selling the securities to their
   insurance clients. The Commission further alleged the defendants made
   fraudulent statements in connection with the sale of the Chemical
   Trust promissory notes and acted as unregistered brokers.

   The defendants consented, without admitting or denying the allegations
   in the complaint, to the entry of a final judgment permanently
   enjoining each from future violations of Sections 5(a), 5(c) and 17(a)
   of the Securities Act of 1933 and Sections 10(b) and 15(a) of the
   Securities Exchange Act of 1934 and Rule 10b-5 thereunder. In
   addition, Cox, Sparkman and Covington consented to the entry of an
   administrative order barring each from association with any broker or
   dealer while the remaining respondents consented to a twelve-month
   suspension from association with any broker or dealer.