UNITED STATES OF AMERICA
                           before the 
               SECURITIES AND EXCHANGE COMMISSION 



INVESTMENT ADVISERS ACT OF 1940
RELEASE NO. 1584 / September 27, 1996

ADMINISTRATIVE PROCEEDING 
FILE NO. 3-9107

------------------------------------
                                   :  ORDER INSTITUTING PUBLIC
                                   :  PROCEEDINGS PURSUANT TO
                                   :  SECTIONS 203(f) AND
In the Matter of                   :  203(k) OF THE INVESTMENT
                                   :  ADVISERS ACT OF 1940, 
PATRICIA OWEN-MICHEL               :  MAKING FINDINGS AND
                                   :  IMPOSING REMEDIAL SANCTIONS
               Respondent          :  AND CEASE-AND-DESIST ORDER  
                                   :     
------------------------------------

                                I.

     The Securities and Exchange Commission deems it appropriate
and in the public interest that administrative and cease-and-
desist proceedings be instituted against Patricia Owen-Michel
("Respondent"), pursuant to Sections 203(f) and 203(k) of the
Investment Advisers Act of 1940 ("Advisers Act").

     In anticipation of the institution of these proceedings,
Respondent has submitted an Offer of Settlement ("Offer") which
the Commission has determined to accept.  Solely for the purpose
of these proceedings and any other proceeding brought by or on
behalf of the Commission or in which the Commission is a party,
and without admitting or denying any of the findings contained
herein, except as to the jurisdiction of the Commission over her
and over the subject matter of these proceedings, and as to the
findings contained in Section II paragraphs 1 and 2, which are
admitted, Respondent consents to the entry by the Commission of
this Order Instituting Public Proceedings Pursuant to Sections
203(f) and 203(k) Advisers Act, Making Findings and Imposing
Remedial Sanctions and Cease and Desist Order ("Order").

     Accordingly, IT IS HEREBY ORDERED that proceedings against
Respondent be and hereby are instituted.





                               II.

     On the basis of this Order and the Offer, the Commission
finds that:

     1.   From at least June 1978 to May 1995, Respondent was
President and Chief Executive Officer of Securities Research &
Management, Inc. ("SRM").

     2.    SRM was registered with the Commission as an
investment adviser from June 1978 until it voluntarily withdrew
its registration in May 1995.-[1]-  

     3.   From at least July 1994 to May 1995, SRM was a
quantitative money management firm that used a computer based
statistical model to select stocks and mutual funds, and to
generate trading signals.  SRM had approximately 450 clients and
managed approximately $45 million. 

     4.   From at least July 1994 to May 1995, SRM advertised its
services by use of a promotional package containing, among other
things, (i) a copy of a newspaper article containing quotes of an
SRM client describing his investment experience; (ii) a copy of
certain newspaper articles repeating statements made by
principals of SRM regarding SRM's investment performance; and
(iii) various charts and graphs depicting hypothetical
performance of an investment model applied retroactively
(collectively, the "promotional package").  SRM routinely
provided the promotional package to prospective retail clients. 
Respondent reviewed and approved the use of the promotional
package.

     Testimonial

     5.   SRM's promotional package included a copy of a
newspaper article quoting an SRM client describing his investment
experience with SRM.  The article quotes the client as stating
that "he has averaged a 20 percent annual return on investment
since joining SRM."

     Self-Laudatory Statements

     6.   SRM's promotional package also included a copy of two
newspaper articles quoting or paraphrasing self-laudatory
statements about SRM's investment performance.  One article,
published in 1993, repeats a claim Respondent made to the author
in which she stated that many people had become her clients ten
years previously and had since seen their capital increase ten-

---------FOOTNOTES----------
     -[1]-     SRM was dissolved on August 25, 1995 by the State
of Florida.

                   
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fold.  Another article, published in 1988, repeats a similar
claim made by Respondent's father, who was SRM's Chairman of the
Board.  These statements are misleading in that, among other
things, they tend to suggest that investment experience was
typical of SRM's clients for that period, when, in reality, SRM's
clients experienced, on average, materially lower investment
results.  In fact, the average performance of SRM clients during
these two ten year periods was approximately 50% and 25% lower,
respectively.

     Advertising for SRM's Statistical 
     Techniques for Asset Reallocation Program 

     7.   Beginning in July 1994, SRM offered its clients an
opportunity to participate in its Statistical Techniques for
Asset Reallocation ("STAR") investment program.  The STAR program
was advertised as an asset allocation program that would permit
SRM quickly to switch assets invested in one or more types of
funds (e.g., United States equities and precious metals) to one
or more different types of funds (e.g., bonds and international
equities).  SRM's STAR program was divided into three portfolios
in which clients could participate, denominated as
"Conservative," "Moderate," and "Aggressive," and it adapted its
statistical model to those portfolio strategies.

     8.   SRM included materials advertising its STAR program in
its promotional package.

     9.   SRM's promotional package included a graph captioned
"Asset Class Return" graph and a bar chart captioned "Average
Yearly Allocation Percentages."  The "Asset Class Return" graph
covers the period from January 1986 through approximately March
1994 and purports to illustrate the superior performance of the
STAR program relative to an investment in only one type of asset,
e.g., bonds or metals.  The "Average Yearly Allocation
Percentages" bar chart purports to show the "pro-forma percentage
of holdings of each asset class from 1986-1993" as selected by
the STAR model, i.e., how a STAR program client's hypothetical
portfolio would have been allocated among various asset types. 
An accompanying explanation further states that the asset
allocation shown in the bar chart "produced a pro-forma average
annual return of 18.8%."

     10.  The "Asset Class Return" graph and the "Average Yearly
Allocation Percentages" bar chart fail to disclose, among other
things: 

     (a)  that SRM only began offering its STAR program
          after the performance period depicted by the
          "Asset Class Return" graph and the "Average Yearly
          Allocation Percentages" bar chart, i.e., the
          advertised performance results do not represent

                   
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          the results of actual trading using client assets,
          but were achieved by means of the retroactive
          application of a model designed with the benefit
          of hindsight;

     (b)  all material economic and market factors that
          might have had an impact on SRM's decision-making
          when using the STAR model to actually manage
          clients' money; 

     (c)  whether the advertised performance reflects the
          deduction of advisory fees, brokerage or other
          commissions, mutual fund exchange fees, and any
          other expenses that a client would have paid; and

     (d)  the potential for loss as well as for profit.

     11.  SRM's promotional package also included three separate
one page charts individually labeled "Conservative Portfolio,"
"Moderate Portfolio," and "Aggressive Portfolio" (collectively,
the "Portfolio Charts").  Each of the Portfolio Charts presents
performance results from a "pro-forma study of asset allocation"
from December 31, 1985 through March 30, 1994.  Each of the
Portfolio Charts further purports to show quarterly and annual
returns and the respective dollar earnings, assuming an initial
investment of $100,000.  The Portfolio Charts state that the
average annual net returns from the use of these strategies are
16.16%, 17.25% and 18.08%, respectively.

     12.  The Portfolio Charts fail to disclose, among other
things:

     (a)  that SRM only began offering its STAR program
          after the performance period covered by the
          Portfolio Charts, i.e., the advertised performance
          results do not represent the results of actual
          trading using client assets, but were achieved by
          means of the retroactive application of a model
          designed with the benefit of hindsight;-[2]-

---------FOOTNOTES----------
     -[2]-     Each of the Portfolio Charts states, in small
type, that "[b]ecause markets are influenced by a variety of
changing conditions, future performance based upon prior results,
or pro-forma analysis, cannot be guaranteed."  This disclosure is
insufficient to dispel the misleading suggestion of the
advertisement that the advertised performance results represented
the results of actual trading.  Cf. Jesse Rosenblum, Investment
Advisers Release No. 913 (May 17, 1984) (investment adviser's
advertisement containing materially misleading statements "not
cured by the disclaimers buried in the [smaller print] text" of
the advertisement).

                   
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     (b)  all material economic and market factors that
          might have had an impact on SRM's decision-making
          when using the STAR model to actually manage
          clients' money; 

     (c)  whether the advertised performance reflects the
          deduction of advisory fees, brokerage or other
          commissions, mutual fund exchange fees, and any
          other expenses that a client would have paid; and

     (d)  the potential for loss as well as for profit.

     13.  Finally, SRM's promotional package included a one page
chart captioned "Benefit of Fund Selection."  This chart
represents "a pro-forma study of asset allocation," and shows the
hypothetical performance of assets allocated among certain mutual
funds and treasury bills from April 8, 1983 through July 2, 1992.

The chart concludes that "[i]nvesting $100,000 with SRM would
have grown to $506,000", whereas the same investment, "using the
S&P . . . would only have grown to $368,000."

     14.  The "Benefit of Fund Selection" chart fails to
disclose, among other things:

     (a)  that SRM only began offering its STAR program
          after the performance period covered by the
          "Benefit of Fund Selection" chart, i.e., the
          advertised performance results do not represent
          the results of actual trading using client assets,
          but were achieved by means of the retroactive
          application of a model designed with the benefit
          of hindsight;-[3]-

     (b)  all material economic and market factors that
          might have had an impact on SRM's decision-making
          when using the STAR model to actually manage
          clients' money; 

     (c)  whether the advertised performance reflects the
          deduction of advisory fees, brokerage or other
          commissions, mutual fund exchange fees, and any
          other expenses that a client would have paid;

     (d)  the potential for loss as well as for profit; 

---------FOOTNOTES----------
     -[3]-     The "Benefit of Fund Selection" chart contains the
same disclosure language described in footnote 2.  For the reason
therein described, the disclosure language is insufficient to
dispel the misleading suggestion of the advertisement that the
advertised performance results represented the results of actual
trading.

                   
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     (e)  that SRM had not actually utilized the funds
          listed in the "Benefit of Fund Selection" chart;
          and 

     (f)  all other material facts relevant to the
          comparison between the STAR program and the S&P.

     Legal Findings

     15.  From at least July 1994 to May 1995, Respondent
willfully aided and abetted and caused violations of Section
206(4) of the Advisers Act and Rule 206(4)-1(a)(1) promulgated
thereunder, in that she, as President and Chief Executive Officer
of SRM, aided and abetted and caused SRM, by use of the mails or
any means or instrumentality of interstate commerce, directly or
indirectly, to engage in any act, practice, or course of business
which was fraudulent, deceptive, or manipulative by, directly or
indirectly, publishing, circulating or distributing
advertisements which referred, directly or indirectly, to any
testimonial of any kind concerning SRM or concerning any advice,
analysis, report or other service rendered by SRM.  As part of
the aforesaid conduct, Respondent aided and abetted and caused
SRM to engage in acts and practices described above in Sections
II.4.(i) and II.5.

     16.  From at least July 1994 to May 1995, Respondent
willfully aided and abetted and caused violations of Section
206(4) of the Advisers Act and Rule 206(4)-1(a)(5) promulgated
thereunder, in that she, as President and Chief Executive Officer
of SRM, aided and abetted and caused SRM, by use of the mails or
any means or instrumentality of interstate commerce, directly or
indirectly to engage in any act, practice, or course of business
which was fraudulent, deceptive, or manipulative by, directly or
indirectly, publishing, circulating or distributing any
advertisement which contained any untrue statement of a material
fact, or which was otherwise false and misleading.  As part of
the aforesaid conduct, Respondent aided and abetted and caused
SRM to engage in acts and practices described above in Sections
II.4.(ii), II.4.(iii) and II.6 - II.14.

                               III.

     On the basis of the foregoing, the Commission deems it
appropriate and in the public interest to impose the sanctions
and cease-and-desist order specified in the Offer submitted by
Respondent.

     ACCORDINGLY, IT IS HEREBY ORDERED THAT:

     1.   Pursuant to Section 203(k) of the Advisers Act,
Respondent shall cease and desist from committing or causing any
violation or future violation of Section 206(4) of the Advisers

                   
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Act and Rules 206(4)-1(a)(1) and 206(4)-1(a)(5) promulgated
thereunder;

     2.   Pursuant to Section 203(f) of the Advisers Act,
Respondent is hereby censured; and 

     3.   Respondent, within fifteen (15) days from the entry of
the Order, pursuant to Section 203(i) of the Advisers Act, shall
pay an administrative penalty in the amount of twenty-five
thousand dollars ($25,000.00) to the United States Treasury. 
Such payment shall be:  (1) made by United States postal money
order, certified check, bank cashier's check, or bank money
order; (2) made payable to the Securities and Exchange
Commission; (3) transmitted to the Comptroller, Securities and
Exchange Commission, 450 Fifth Street, N.W., Stop 2-5,
Washington, D.C. 20549; and (4) submitted under cover letter that
specifies the respondent in this proceeding, and the Commission's
case number, a copy of which cover letter and money order or
check shall be sent to Glenn S. Gordon, Securities and Exchange
Commission, Southeast Regional Office, 1401 Brickell Avenue,
Suite 200, Miami, Florida 33131.

     By the Commission.




                              Jonathan G. Katz
                              Secretary
























                   
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