UNITED STATES SECURITIES AND EXCHANGE COMMISSION


SECURITIES AND EXCHANGE COMMISSION v. R.E. ANDERSON CAIN, United
States District Court for the Middle District of North Carolina,
Greensboro Division, Civil Action No. 2:96CV1033.

Litigation Release No. 15181 / December 9, 1996   

     On December 6, 1996, the Commission filed an action for
injunctive relief alleging that R. E. Anderson Cain of Greens-
boro, North Carolina, defrauded customers while operating a one-
person branch office of Royal Alliance Associates, Inc. The
Complaint alleges that from November 1989 to March 1993 Cain sold
nonexistent investments to his customers, misappropriated custom-
er checks, commingled customer funds in his personal bank ac-
count, prepared and distributed false confirmations of trades and
false account statements, and churned variable annuities in
customer IRA accounts.  The Complaint alleges that to carry out
his fraudulent scheme, Cain routinely forged the signatures of
his customers on letters of instruction, third party checks and
other documents. It is alleged that Cain transferred and diverted
more than $2 million among his customers' accounts.      

     Cain has agreed to settle this action, without admitting or
denying the allegations of the Complaint.  Cain has agreed to a
permanent injunction 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 and disgorgement, although
his obligation to pay would be waived based upon his demonstrated
inability to pay.