SECURITIES AND EXCHANGE COMMISSION
                                   Washington, D.C.

     Securities Exchange Act of 1934 
     Release No. 39128 / September 25, 1997 

     Accounting and Auditing Enforcement 
     Release No.  965 / September 25, 1997

     Administrative Proceeding File No. 3-9435

     In the Matter of Kedar Gupta, Alvan Chorney, and Herbert Moskowitz 

          On September 25, 1997, the Commission instituted a cease-and-desist
     proceeding against Kedar Gupta, Alvan Chorney, and Herbert Moskowitz.  In
     the Order, the Division of Enforcement alleges that Ferrofluidics
     Corporation, a NASDAQ-listed corporation headquartered in New Hampshire,
     improperly recognized revenue totalling $4,683,454 on six units of custom-
     ordered equipment during the third and fourth quarters of its fiscal year
     ended June 30, 1992.  The Division alleges that Gupta obtained from a
     customer a letter, which he knew would be provided to Ferrofluidics'
     auditors, falsely stating that the equipment was complete as of the end of
     the fiscal year.  The Division alleges that Gupta caused violations of
     Exchange Act Section 10(b) and Rules 10b-5 and 13b2-2, and violated
     Exchange Act Rule 13b2-1.

          The Division also alleges that during the fall of 1992, Ronald
     Moskowitz, who was then Ferrofluidics' chief executive officer and chairman
     of the board of directors, took several steps to ensure that a shareholder
     proposal requesting certain limits on executive compensation was defeated. 
     The Division alleges that Ronald Moskowitz asked Gupta and Chorney to
     exercise their warrants and options for Ferrofluidics' shares, and provided
     them with below-market loans to fund the exercise.  The Division also
     alleges that Ronald Moskowitz also arranged to have Chorney's unvested
     warrants accelerated on the condition that Chorney agree to exercise and
     vote the shares against the shareholder proposal.  The Division alleges
     that Gupta and Chorney violated Exchange Act Section 13(d) and Rule 13d-1
     by failing to file a timely Schedule 13D with the Commission disclosing
     their ownership, along with Ronald Moskowitz, of more than five percent of
     the common stock of Ferrofluidics.

          The Division also alleges that, between May 24, 1991 and June 21,
     1991, Herbert Moskowitz, Ronald Moskowitz's brother, funded the purchase of
     40,100 shares of Ferrofluidics stock (then approximately 1.8 percent of the
     Ferrofluidics' shares) in an account owned by his daughter and son-in-law
     and over which he had trading authority.  The Division alleges that on June
     5, 1991, Herbert Moskowitz received 105,000 Ferrofluidics warrants
     (representing approximately 4.1 percent of the then outstanding shares). 
     The Division alleges that Herbert Moskowitz caused his daughter and son-in-
     law to sell the 40,100 shares between July 10, 1991 and August 1, 1991. 
     The Division alleges that Herbert Moskowitz failed to properly file a
     Schedule 13D with the Commission relating to his aggregated ownership of

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     Ferrofluidics shares, thereby violating Section 13(d) of the Exchange Act
     and Rules 13d-1 and 13d-2 thereunder.

          A hearing will be held before an administrative law judge to determine
     if the allegations are true and if true, what if any remedial relief is
     appropriate and in the public interest.















































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