UNITED STATES OF AMERICA
                          SECURITIES AND EXCHANGE COMMISSION

     SECURITIES EXCHANGE ACT OF 1934
     Release No.  38714 / June 4, 1997

     SECURITIES ACT OF 1933
     Release No.   7421 / June 4, 1997

     ADMINISTRATIVE PROCEEDING
     File No. 3-9327

     Administrative Release

          The Securities and Exchange Commission has instituted public
     administrative and cease-and-desist proceedings pursuant to Sections 8A of
     the Securities Act of 1933 ("Securities Act") and Sections 15(b)(6), 19(h)
     and 21C of the Securities Exchange Act of 1934 ("Exchange Act") against
     Aubrey O'Connor ("O'Connor"), formerly Sales Manager of Government
     Securities Corp. ("GSC"), Rick Pierson ("Pierson"), formerly Head Trader of
     GSC's Fixed Income Division, and three former GSC registered
     representatives, James Winter ("Winter"), Gregory Bowen ("Bowen") and
     Kenneth Ward ("Ward").  

          The Order alleges that the respondents willfully violated Section
     17(a) of the Securities Act and Section 10(b) of the Exchange Act and Rule
     10b-5 thereunder in connection with the offer and sale to public clients of
     high-risk Collateralized Mortgage Obligation ("CMOs"), including interest-
     only strips ("IOs"), Inverse IOs and Inverse Floaters.  The Order alleges
     that respondents failed to disclose to public clients that the instruments
     constituted volatile CMO tranches, but instead misrepresented the CMOs as
     suitable investments that comported with clients' investments objectives of
     safety of principal, liquidity,  market stability, short duration and low
     risk.  In addition, clients were not informed that these instruments were
     highly sensitive to changes in interest rates.  Moreover, the Order further
     alleges that the respondents specifically misrepresented certain
     characteristics and risks involved in the CMO tranches.  For example,
     O'Connor, Pierson, Winter and Bowen falsely represented to certain public
     clients that IOs and Inverse IOs offered guaranteed principal, while
     O'Connor, Pierson, Bowen and Ward falsely represented to other public
     clients that the Inverse Floaters were short term instruments, whose
     maturity would extend, at most, to two years or less.  The Order also
     alleges that O'Connor willfully violated Section 15(b)(6)(B)(i) of the
     Exchange Act, in that O'Connor, while subject to a statutory
     disqualification that prohibited him from exercising supervisory
     responsibility over GSC's sales personnel, assumed positions at GSC that
     constituted him as the person chiefly responsibility for supervising GSC
     registered representatives.


          A hearing will be scheduled to take evidence on the Staff's
     allegations and to afford O'Connor, Pierson, Winter, Bowen and Ward an

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     opportunity to present any defense thereto.  The purpose of the hearing is
     to determine whether the allegations are true and whether disgorgement,
     civil penalties and/or any remedial action should be ordered and whether
     any cease-and-desist orders should be issued by the Commission.   

















































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