UNITED STATES SECURITIES AND EXCHANGE COMMISSION

          Litigation Release No. 15812
          / July 16, 1998


          SECURITIES AND EXCHANGE COMMISSION v. JOHN W. GILLETTE, JR.,
          Civil Action No. 98- CV 1265S CGA (S.D. Cal.).

          The Securities and Exchange Commission (Commission) announced
          that on July 10, 1998, it filed and settled an action in United
          States District Court against John W. Gillette, Jr. (Gillette).

          The Commission's complaint alleged that, from June 1994 through
          July 1997, Gillette, a resident of San Diego, California, acted
          as an unregistered investment adviser to over 85 clients, most of
          whom were professional athletes.  The Commission further alleged
          that Gillette made materially false and misleading statements
          when recommending investments to these clients, and
          misappropriated client monies, resulting in client losses of over
          $11 million.  Among other things, the Commission alleged that
          Gillette misappropriated his client's investment profits, paid
          certain clients with other clients' monies, and represented he
          had invested client funds in partnerships and municipal bonds
          when in fact he had misappropriated those funds.  In addition,
          the Commission alleges that from late 1993 through June 1994,
          Gillette, who was a registered representative at the time,
          liquidated the securities of a brokerage firm client without her
          knowledge, and misappropriated over $400,000 from her account for
          his personal benefit.  The Commission alleged that Gillette spent
          the misappropriated funds on, among other things, his family's
          personal expenses, his company's overhead expenses, and to invest
          in undisclosed business ventures.  Finally, the Commission
          alleged that, by giving investment advice to his clients in
          exchange for a fee, Gillette was acting as an unregistered
          investment adviser.

          Without admitting or denying the Commission's allegations,
          Gillette agreed to be permanently enjoined from future violations
          of 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
          Sections 203(a), 206(1), and 206(2) of the Investment Advisers
          Act of 1940.