UNITED STATES OF AMERICA
     Before the
     SECURITIES AND EXCHANGE COMMISSION


     SECURITIES EXCHANGE ACT OF 1934
     Release No. 39515 / January 2, 1998

     ADMINISTRATIVE PROCEEDING
     File No. 3-9524

                             
                             :
              		     :
     In the Matter of        :ORDER INSTITUTING A PROCEEDING,
                             :MAKING FINDINGS AND IMPOSING
     JAMES E. EATON          :REMEDIAL SANCTIONS PURSUANT TO
      Respondent.            :SECTIONS 15(b)(6), 15B(c)(4) AND
                             :19(h)(3) OF THE SECURITIES EXCHANGE
                             :ACT OF 1934


     I.


     The Commission deems it appropriate and in the public interest to institute
     a public administrative proceeding pursuant to Sections 15(b)(6), 15B(c)(4)
     and 19(h)(3) of the Securities Exchange Act of 1934 ("Exchange Act") [15
     U.S.C.  78o(b)((6), 78o-4(c)(4) and 78s(h)(3)] to determine what action,
     if any, is necessary in light of the entry of a permanent injunction
     against Eaton on December 9, 1997, which occurred in the United States
     District Court for the Northern District of Georgia.

     II.

     In anticipation of the institution of these proceedings, Eaton has
     submitted an Offer of Settlement ("Offer") which the Commission has
     determined to accept.<(1)>  Solely for the purpose of this proceeding,
     and any other proceeding brought by or on behalf of the Commission or to
     which the Commission is a party, and without admitting or denying the
     findings or conclusions contained herein, except for those contained in
     Section III.1., 2. and 3., which are admitted, Eaton consents to the
     issuance of this Order Instituting A Proceeding, Making Findings and
     Imposing Remedial Sanctions Pursuant to Sections 15(b)(6), 15B(c)(4) and
     19(h)(3) of the Securities Exchange Act of 1934 (the "Order"), the entry of
     the findings contained herein, and the imposition of the sanction set forth
     below.

                              

          <(1)>     In  determining  to accept  the  Offer, the  Commission
          considered the cooperation Eaton afforded the Commission staff.





     ACCORDINGLY, IT IS ORDERED that this proceeding pursuant to Sections
     15(b)(6), 15B(c)(4) and 19(h)(3) of the Exchange Act be and hereby is
     instituted.

     III.

     On the basis of this Order and Eaton's Offer, the Commission
     finds<(2)> that:

     1.From January 1990 through July 1993, Eaton was associated with Lazard
     Freres & Co. LLC ("Lazard Freres"), a broker-dealer and municipal
     securities dealer registered with the Commission pursuant to Sections 15
     and 15B(a) of the Exchange Act;

     2.Eaton is permanently enjoined by judgment of the United States District
     Court for the Northern District of Georgia, in the action styled Securities
     and Exchange Commission v. Richard P. Poirier, Jr., James E. Eaton, and
     Michael S. DeVegter ("SEC v. Poirier"), Civil Action No. 1:97-CV-3478-WBH
     (N.D. Ga., judgment entered December 9, 1997), from violating Section 17(a)
     of the Securities Act of 1933, Section 10(b) of the Exchange Act and Rule
     10b-5 thereunder, and Section 15B(c)(1) of the Exchange Act and Rules G-17
     and G-20 of the Municipal Securities Rulemaking Board, and in that
     proceeding was ordered to pay a civil penalty of $15,000;

     3.On June 11, 1997, Eaton entered a plea of guilty to one count of wire
     fraud in violation of 18 U.S.C.  1343, in United States District Court for
     the Northern District of Georgia in the action styled United States v.
     James Eaton, Criminal Information No. 1:97-CR-259 (N.D. Ga., plea entered
     June 11, 1997).

     4.With respect to Eaton, the Commission's complaint in SEC v. Poirier
     alleges as follows:  During 1992 and 1993, Eaton assisted Lazard Freres
     with the underwriting of two bond issues by the Fulton County Commission
     ("Fulton County") and the Fulton-DeKalb Hospital Authority ("FDHA"). 
     Lazard Freres and, by virtue of his position as an employee of Lazard
     Freres with knowledge of the relevant facts, Eaton, had a duty to disclose
     to Fulton County, the FDHA, and to investors in the two offerings, but
     failed to disclose, the existence of an arrangement pursuant to which at
     least $41,936 in Lazard Freres funds was paid to one of the financial
     advisors to Fulton County and the FDHA.  During 1992 and 1993, at the
     direction of his supervisor at Lazard Freres, Eaton participated in a
     scheme to utilize third parties as conduits for Lazard Freres political
     contributions made in New Jersey and Puerto Rico, pursuant to which the
     third parties were reimbursed by Lazard Freres under cover of misleading
     invoices.


                              

          <(2)>     The findings herein are  made pursuant to Eaton's Offer
                    and  are not binding on  any other person  or entity in
                    this or any other proceeding.

                              ======END OF PAGE 2======





     IV.

     Based on the foregoing, the Commission deems it appropriate and in the
     public interest to accept the Offer submitted by Eaton  and impose the
     sanctions that are consented to in that Offer. 

     Accordingly, IT IS HEREBY ORDERED that, effective immediately, Eaton be,
     and hereby is, barred from association with any broker, dealer, investment
     adviser, investment company or municipal securities dealer.


     By the Commission.


                                                               
                                     Jonathan G. Katz
       Secretary




































                              ======END OF PAGE 3======