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         UNITED STATES SECURITIES AND EXCHANGE COMMISSION


LITIGATION RELEASE NO. 15112 / October 7, 1996

THE STATE OF TEXAS v. JAMES RUSSELL CLEVELAND
21st Judicial District, Cause No. 12319, Burleson Co., Cause No.
11526, Washington Co. 

     The Securities and Exchange Commission ("Commission") and
the District Attorney for the 21st Judicial District, Texas,
announced that grand juries in Burleson County and Washington
County returned indictments against James Russell Cleveland of
Brenham, Texas, on September 4, 1996, and September 24, 1996,
respectively. The indictments charge that Cleveland unlawfully
and deceptively appropriated funds belonging to investors with
the intent to deprive the owners of their property.

     The indictments are based on the same activities alleged in
a civil action filed by the Commission in United States District
Court, Houston, Texas, on May 22, 1996. The Commission's
complaint alleges that Cleveland, individually, and doing
business as Central Texas Securities, took in at least $4.8
million from his customers to purchase municipal securities at
below market prices, but never purchased the bonds for the
investors. In fact, the complaint alleges, Cleveland used funds
received from new investors to pay off previous customers, and
used falsified confirmations and account statements to conceal
his misuse and misappropriation of customers' funds. The
Commission's civil case against Cleveland is continuing.