UNITED STATES SECURITIES AND EXCHANGE COMMISSION


LITIGATION RELEASE NO. 14920 / May 24, 1996

SECURITIES AND EXCHANGE COMMISSION v. CHURCHILL SECURITIES, INC.,
CHURCHILL MORTGAGE INVESTMENT CORP. AND GERALD P. HIRSCH, 93 Civ.

7486 (CBM).   

On April 17, 1996, the United States District Court for the
Southern District of New York enjoined Churchill Securities, Inc.
("Churchill Securities"), a broker-dealer registered with the
Commission, Churchill Mortgage Investment Corp. ("CMIC"), a
mortgage lending company, and Gerald P. Hirsch ("Hirsch"), the
control person of both companies, from future violations of
Sections 5(a), 5(c) and 17(a) of the Securities Act of 1933 and
Section 10(b) of the Securities Exchange Act of 1934 and Rule
10b-5 thereunder.  In addition, CMIC and Churchill Securities
consented to the entry of an Order requiring them to pay $10,000
and $5,000 in civil penalties, respectively.  Civil penalties
were not imposed upon Hirsch based upon his demonstrated
inability to pay them.

The Commission's Complaint in this matter, filed on November 1,
1993, alleged that the defendants violated the above-listed
registration and antifraud provisions of the federal securities
laws.  Specifically, the Complaint alleged that, from June 1987
through November 1993, the defendants sold at least 1,030
unregistered securities in the form of fractional interests in
mortgages originated by CMIC, called "mortgage participations,"
to at least 520 investors, raising approximately $15,000,000. 
The Complaint alleged that the defendants solicited public
investors to purchase the mortgage participations, selected
mortgages in which to assign investors, collected mortgage
payments from borrowers, distributed interest payments to
investors, investigated borrowers and properties, and guaranteed
payment of interest and principal.  

The Commission's Complaint also alleged that, in connection with
the offers and sales of the mortgage participations, the
defendants misrepresented that the investments were safe, or low
risk, when, in fact, CMIC made loans to borrowers with a high
risk of default.  In addition, the Complaint alleged that the
defendants misrepresented that they had recorded investors'
fractional mortgage interests with the appropriate public land
records offices, when, in fact, in many instances they either
failed to record such interests or recorded the interests only
after substantial delays.  In addition, the Commission's
Complaint alleged that the defendants, without disclosure to
investors, assigned to investors interests in mortgages which had
been discharged, or upon which CMIC has commenced legal
proceedings.
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The defendants consented to the entry of the injunctions without
admitting or denying the allegations of the Commission's
Complaint.  For additional information, see Litigation Release
No. 13853.