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SECURITIES AND EXCHANGE COMMISSION

Litigation Release No. 14710 / November 2, 1995

Accounting and Auditing Enforcement 
Release No. 735 / November 2, 1995

SECURITIES AND EXCHANGE COMMISSION V. AUTOMATED TELEPHONE
MANAGEMENT SYSTEMS, INC., AKHILESH CHANDOKE, FRANK C. MZYK AND
DAVID H. JACOBS, United States District Court for the Northern
District of Texas, Civil Action No. 395-CV-2613-X.

     The Securities and Exchange Commission announced the filing
of a civil injunctive action on November 1, 1995 in the United
States District Court for the Northern District of Texas against
Automated Telephone Management Systems, Inc. ("ATM"), Akhilesh
Chandoke, the former president, chief executive officer, and
director of ATM, Frank Mzyk, the former controller and principal
accounting officer of ATM, and David Jacobs, the former secretary
and vice president of sales at ATM.

     In its complaint, the Commission alleges that Chandoke, Mzyk
and Jacobs engaged in a fraudulent scheme to inflate ATM's
revenue for the fiscal year ended September 30, 1993.  The
Commission alleges that the defendants arranged for a third party
to sign a fictitious sales contract, and that ATM recognized $1.3
million in revenue from the transaction, which accounted for
twenty-five percent of ATM's revenue for fiscal year 1993.  The
Commission further alleges that the defendants convinced an ATM
customer to backdate a contract in order to facilitate the
inclusion of the revenue in ATM's financial statements for the
fiscal year ended September 30, 1993.  In addition, the
Commission alleges that the defendants concealed inventory,
created fictitious invoices, and backdated ATM internal documents
to conceal the fraud from ATM's auditors.  The Commission alleges
that Chandoke, Mzyk and Jacobs were responsible for material
misrepresentations and omissions concerning ATM's transactions in
a periodic report filed with the Commission.  Additionally, the
Commission alleges that the defendants made materially false
statements and omitted to disclose material information to ATM's
auditors in connection with the audit of ATM's financial
statements.  

     The Complaint requests that the Court permanently enjoin
Chandoke, Mzyk and Jacobs from violating Sections 10(b) and
13(b)(5) of the Securities Exchange Act of 1934 and Rules 10b-5,
13b2-1, and 13b2-2 thereunder, prohibit Chandoke, Mzyk and Jacobs
from serving as an officer or director of a public company, and
to impose civil penalties as the Court determines appropriate. 
The Complaint also requests that the Court permanently enjoin ATM
from violating Sections 10(b), 13(a), 13(b)(2)(A), 13(b)(2)(B) of
the Securities Exchange Act of 1934 and Rules 10b-5, 12b-20, 13a-
1, and 13a-13 thereunder.

     Also today, the United States Attorney for the Northern
District of Texas announced that a federal grand jury indicted
Chandoke, Mzyk and Jacobs for bank fraud.  The indictments allege
that a financial institution was defrauded as a result of
providing ATM with a line of credit based upon the company's
fraudulently inflated receivables.

     The Commission's investigation continues as to the conduct
of other entities and individuals in this matter.