UNITED STATES SECURITIES AND EXCHANGE COMMISSION
     Washington, D.C.


     SECURITIES ACT OF 1933
     Release No.  7503 / February 2, 1998 

     SECURITIES EXCHANGE ACT OF 1934
     Release No. 39612 / February 2, 1998

     ADMIN. PROC. FILE NO. 3-9542


     ADMINISTRATIVE PROCEEDINGS INSTITUTED AGAINST COUNTY OF NEVADA, CITY OF
     IONE, WASCO PUBLIC FINANCING AUTHORITY, VIRGINIA HORLER, AND WILLIAM MCKAY

          On February 2, 1998, the Securities and Exchange Commission
     ("Commission") issued an Order Instituting Public Administrative
     Proceedings against three central California municipalities and two
     professionals for causing or committing securities fraud in connection with
     the sale of $58 million in municipal bonds.  The Order names the County of
     Nevada ("Nevada County"), the City of Ione ("Ione"), the Wasco Public
     Financing Authority ("Wasco"), Virginia Horler ("Horler"), of Dain Rauscher
     Incorporated (formerly known as Rauscher Pierce Refsnes), and William McKay
     ("McKay"), a real estate appraiser.  The Order alleges that the
     municipalities and individuals created and approved written materials, used
     in selling the bonds, that fraudulently misstated or omitted important
     information. 

          Last July, the Commission sued the underwriter of the offerings, First
     California Capital Markets Group, and two of its executives, H. Michael
     Richardson and Derrick Dumont, in the United States District Court for the
     Northern District of California.  See Lit. Rel. No. 15423.  That litigation
     is pending.

          Nevada County raised $9.07 million through the sale of "Mello-Roos"
     bonds, which are used to finance real estate development.  The Order
     alleges that the Official Statement for the Nevada County offering
     contained misrepresentations and omissions concerning: (1) the value of the
     property to be developed; (2) the developer's ownership interest in the
     property; (3) the developer's experience and financial condition; (4) cost
     estimates to complete the project; and (5) how the project would be
     financed by the developer and Nevada County.  The Order further alleges
     that Horler, Nevada County's financial advisor, drafted the Official
     Statement, which was reviewed by Nevada County staff and officials, and
     approved for distribution by resolution of the County Board of Supervisors.

          Ione raised $14 million in two "Mello-Roos" bond offerings.  The Order
     alleges that the Official Statements for the Ione offerings contained
     misrepresentations and omissions concerning:  (1) the ability to complete
     all of the listed improvements with the offering proceeds; (2) the value of
     the property to be developed, and (3) the sufficiency of the developer's

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     capital to complete the project.

          The Order further alleges that McKay prepared the appraisals for both
     Nevada County and Ione, as well as summaries of each which he knew were to
     be included in the Official Statements for the offerings.

          The misrepresentations and omissions in the Nevada County and Ione
     Offering Statements were important to investors because they made the
     projects and the bonds appear to be less risky than they actually were.

          The Wasco offering, which raised $35 million, involved the sale of
     "Marks-Roos" municipal bonds, which are issued to form pools of money to
     finance a number of local projects.  The Order alleges that the Official
     Statement for this offering failed to disclose that nearly all of the
     projects listed were highly contingent, if not speculative.  These
     misrepresentations were important to investors because they falsely created
     the impression that the pools were fully allocated to particular projects. 
     Because the projects were speculative, there was a greater risk to
     investors that the bonds would not be repaid with interest.

          The Order alleges that Nevada County, Ione, Wasco, Horler and McKay
     violated the antifraud provisions of the federal securities laws, including
     Section 17(a) of the Securities Act of 1933 and Section 10(b) of the
     Securities Exchange Act of 1934 and Rule 10b-5 issued thereunder. 

          An administrative hearing will be scheduled to litigate the
     allegations and determine whether the Commission should order any remedial
     action.

























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