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UNITED STATES SECURITIES AND EXCHANGE COMMISSION

Litigation Release No. 14705 / October 31, 1995     

SEC v. John D. Lauer, Clifton Capital Investors L.P., Konex
Holding Corp., Lyle E. Neal, Copol Investments Limited and Joseph
Polichemi, USDC N.D.Ill., 94 C 3770, filed June 21, 1994.

     The U.S Securities and Exchange Commission (Commission)
announced that on October 24, 1995, the Honorable Wayne R.
Andersen of the U.S. District Court for the Northern District of
Illinois entered an Order of Permanent Injunction and Other
Equitable Relief, by consent, against John D. Lauer (Lauer) and
Clifton Capital Investors L.P. (CCI) enjoining them from future
violations of Section 17(a) of the Securities Act of 1933 and
Section 10(b) of the Securities Exchange Act of 1934 and Rule
10b-5 thereunder for misrepresenting and omitting to state
material facts to prospective investors and others in a scheme
involving the offer and sale of so called "Prime Bank
Instruments" for which Lauer received over $4 million of investor
funds from the scheme's promoters.  The Permanent Injunction also
ordered Lauer and CCI to disgorge $4.853 million plus prejudgment
interest within 30 days and found civil penalties appropriate but
left the determination of the amount of civil penalties for a
future date.  

     The Permanent Injunction contained Findings of Fact and
Conclusions of Law against Lauer and CCI.  As part of those
findings, the Court found that Lauer, the Director of Risk
Management and Benefits for the Chicago Housing Authority (CHA),
had invested at least $12.5 million of CHA funds in the Konex
Roll Program (Roll Program), a purported "Prime Bank Instrument"
trading program.  In connection with that offering, the Court
found that Lauer had breached his fiduciary duty to the CHA by
failing to disclose the role of his private company, CCI, in the
administration of CHA's investment, his receipt from Roll Program
promoters of over $4 million and his resulting conflict of
interest.  The Court further found that Lauer had made false
statements to prospective investors concerning the rate of return
the CHA earned and the circumstances under which the CHA invested
in the Roll Program.  Moreover, Court found that Lauer had
repeatedly lied to federal investigators about his investments in
"Prime Bank Instruments," including Commission staff, during the
course of its investigation in this matter.   

     The Commission's Complaint filed in that action also charged
Konex Holding Corp. (Konex), Lyle E. Neal (Neal), Copol
Investments Limited (Copol) and Joseph Polichemi (Polichemi) with
violations of the antifraud provisions in connection with the
offer and sale of investment contracts in the Roll Program.  In
fact, the Roll Program was nothing more than a scheme to defraud
investors.  Thus, the Complaint alleged that Neal and Polichemi,
through their prospective companies, Konex and Copol, made false
and misleading statements regarding the use of CHA proceeds and
the risks and returns associated with the investment.

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     The Commission brought this action on an emergency basis on
June 21, 1994.  On that date, Judge Andersen entered a Temporary
Restraining Order against the defendants, and, among other
things, froze their assets.  On July 29, 1994, the Court
permanently enjoined Konex, Neal, Copol and Polichemi by default.

On August 25, 1994, Judge Andersen entered an Order of
Preliminary Injunction and Other Equitable Relief against Lauer
and CCI, which the Seventh Circuit affirmed on April 12, 1995. 
Discovery continues in this action for purposes of disgorgement
and civil penalties.