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UNITED STATES SECURITIES AND EXCHANGE COMMISSION

Litigation Release No. 14698 / October 24, 1995

SEC v. Basic Energy & Affiliated Resources, Inc., et al., Case
No. 94 CV 74434 (E.D. MI) 

The Securities and Exchange Commission announced that an Order of
Permanent Injunction by Consent was entered against Charles
Michael, Jr. on May 11, 1995, by the Honorable Horace Gilmore of
the District Court of Eastern Michigan.  The Injunction prohibits
Michael from violating Sections 5(a), 5(c) and 17(a) of the
Securities Act of 1933 and Section 10(b) of the Securities
Exchange Act of 1934 and Rule 10b-5 thereunder.  Additionally,
the Court ordered Michael to pay disgorgement in the amount of
$922,886 and prejudgment interest.  Based upon his financial
condition, the Court waived the payment of disgorgement and
prejudgment interest.  The Court did not impose a civil penalty
on Michael based on his inability to pay.

Previously, the Commission had filed a complaint against Michael
and others in which it alleged the defendants fraudulently sold
unregistered securities offered by Basic Energy & Affiliated
Resources, Inc. (BEAR).  The complaint alleged that Michael was a
top marketer of BEAR securities, which were sold through a multi-
level marketing structure consisting of at least 150 marketers. 
BEAR securities were sold to at least 1000 investors and such
sales raised at least $27 million.  Michael received $922,886 in
commissions for his and those of his hierarchy's sale of BEAR
securities.  The complaint also alleged that Michael willfully
violated the antifraud provisions of the securities laws in the
sale of BEAR securities in that he made misrepresentations and
omissions of material facts concerning the risks associated with
investing in BEAR programs, the financial condition of BEAR, the
use of investor funds, and the estimated oil and gas reserves of
properties leased or owned by BEAR.