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         UNITED STATES SECURITIES AND EXCHANGE COMMISSION

LITIGATION RELEASE NO. 14919 / May 23, 1996

SECURITIES AND EXCHANGE COMMISSION V. JAMES RUSSELL CLEVELAND,
individually and d/b/a CENTRAL TEXAS SECURITIES, Civil Action No.
H-96-1629, USDC, SD/TX (Houston)

     The Securities and Exchange Commission ("Commission")
announced that on May 22, 1996, it filed a Complaint in United
States District Court for the Southern District of Texas, seeking
emergency relief under the federal securities laws against James
Russell Cleveland ("Cleveland"), individually, and doing business
as Central Texas Securities ("CTS"), an unincorporated
association that Cleveland operated as an unregistered broker-
dealer.  The Hon. Nancy F. Atlas, United States District Judge,
granted the Commission's application for immediate relief, and
issued a Temporary Restraining Order prohibiting Cleveland and
CTS from violating Section 17(a) of the Securities Act of 1933,
and Sections 10(b) and 15(a)(1) of the Securities Exchange Act of
1934, and Rule 10b-5 thereunder, freezing assets held by
Cleveland and CTS subject to certain allowances, and requiring
the defendants to account for the funds they obtained through
these allegedly unlawful activities.

     The Commission's complaint alleges that Cleveland, through
CTS, took in at least $4.8 million from CTS customers for the
stated purpose of purchasing municipal securities, purportedly
obtained from a wealthy widow who required funds to satisfy
estate tax obligations, at below market prices, thereby assuring
his customers a profit. The complaint further alleges that
Cleveland never purchased the municipal bonds with these
customers' funds; rather, as part of a "Ponzi" scheme, he used
funds from new customers to satisfy obligations to customers he
previously defrauded.

     In furtherance of the scheme, the complaint alleges that
Cleveland provided customers with false confirmations and account
statements generated by CTS, or with account statements
purportedly generated by a registered broker-dealer that provides
recordkeeping, clearing, and execution services, to conceal his
misuse and misappropriation of customers' funds. Also, according
to the complaint, Cleveland has been unable to account for
customer funds or assets in his possession and now owes customers
in excess of $1.7 million.

     The complaint also seeks orders preliminarily and
permanently enjoining Cleveland and CTS from future violations of
the antifraud and broker-dealer registration provisions of the
federal securities laws, and orders requiring the defendants to





disgorge all wrongfully obtained profits and assessing civil
money penalties.