Kenton Capital, Ltd., et al.

Litigation Release No. 17136 / September 18, 2001

SECURITIES AND EXCHANGE COMMISSION v. KENTON CAPITAL, LTD., et al., Case No. 95CV00829 (D.D.C.)

DONALD WALLACE JAILED FOR FAILURE TO COMPLY WITH COURT ORDER TO PAY FRAUD JUDGMENT

The Securities and Exchange Commission announced today that on Wednesday, September 5, 2001, Donald C. Wallace surrendered to federal authorities. Wallace was then incarcerated as a result of a Writ of Body Attachment issued on August 24, 2001 by Judge Colleen Kollar-Kotelly of the United States District Court for the District of Columbia in SEC v. Kenton Capital, Ltd., et al. Under the terms of the Writ, Wallace shall remain in custody until such time as the Court discharges him.

Wallace's incarceration resulted from his failure to comply with a July 12, 2001 Order of Judge Kollar-Kotelly that held Wallace in civil contempt for his failure to satisfy a judgment the Commission obtained on September 30, 1998. The Order required Wallace, within thirty days of the date of the Order, either to pay disgorgement in the amount of $265,245.10 (plus prejudgment interest in the amount of $86,665.83 and post judgment interest) and a civil penalty in the amount of $1.2 million, or enter into an alternate payment plan that is acceptable to the Commission and the Court. The securities fraud judgment in the underlying case stemmed from a prime bank fraud perpetrated through Kenton Capital, Ltd., an entity incorporated in the Cayman Islands and of which Wallace was President. See also Lit. Rel. No. 17073, July 19, 2001.