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                SECURITIES AND EXCHANGE COMMISSION
                         Washington, D.C.


Litigation Release No. 15001 / August 6, 1996

SECURITIES AND EXCHANGE COMMISSION v. ALLAN G. KERN, YALE HIRSCH,
AND MALCOLM MCGUIRE III, United States District Court for the
District of New Jersey.

     The Securities and Exchange Commission today announced the
filing of a Complaint in the U.S. District Court for the District
of New Jersey in Newark against Allan G. Kern, Yale Hirsch, and
Malcolm McGuire III alleging that they participated in a
fraudulent scheme to inflate artificially the stock price of
Davstar Industries, Ltd. ("Davstar") between May 1991 and
November 1992.  According to the Complaint, defendants
artificially inflated the price of Davstar common stock during
the relevant period from approximately $1.00 per share to a high
of $13.75 per share in November 1992.  The Complaint alleges that
each defendant received Davstar stock or warrants as compensation
to promote Davstar to the investing public and, therefore, stood
to realize personal financial gain from an increase in Davstar's
stock price.

     According to the Complaint, in or about May 1991, Davstar
enlisted Kern, a resident of Paradise Valley, Arizona, as a
financial consultant and awarded him warrants to purchase Davstar
stock at favorable prices.  Thereafter, Kern is alleged to have
prepared and caused Davstar to issue several materially false and
misleading press releases concerning, among other things, the
manufacturing and distribution status of Davstar's proprietary
medical products and the company's financial prospects.

     The Complaint alleges that Davstar also retained Yale Hirsch
of Old Tappan, New Jersey, and compensated him with warrants in
return for his agreement to promote Davstar, its products and its
financial prospects in Smart Money and Ground Floor, two
investment newsletters published by the Hirsch Organization.  The
Complaint alleges that Hirsch thereafter published a steady
stream of materially false and misleading information concerning,
among other things, the distribution, marketability and market
response to Davstar's products, as well as baseless projections
regarding, among other things, Davstar's business prospects,
profitability and the value of its stock.

     As to McGuire, a stockbroker in Phoenix, Arizona, the
Complaint alleges that he too was compensated by Davstar,
directly and indirectly, to prepare and disseminate to his retail
clients a purported research report which contained materially
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false and misleading information about Davstar, its products and
its financial prospects.  McGuire's report, prepared and 

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disseminated in May of 1992, projected that Davstar would earn 90
cents per share in 1993 and $1.93 in 1994.  The Complaint alleges
that McGuire knew or was reckless in not knowing there was no
reasonable basis for these projections and that undisclosed,
material adverse facts undermined their accuracy.

     The Complaint alleges that each defendant, by the foregoing
acts, violated the antifraud provisions of the federal securities
laws, Section 10(b) of the Securities Exchange Act of 1934 and
Rule 10b-5 thereunder.  Finally, the Complaint alleges that
Hirsch and McGuire failed to disclose that they had or would
receive compensation directly and indirectly from Davstar in
exchange for promoting the Company.  These omissions misled their
respective readers to believe they were receiving unbiased
evaluations of Davstar when they were not, and violated Section
17(b) of the Securities Act of 1933.

     The Complaint seeks injunctive relief against all
defendants, as well as disgorgement of ill-gotten gains and civil
money penalties.

     The Commission today also filed a separate Complaint against
Jerry B. Silver, Davstar's former president, chief executive
officer and chairman of the board, in the U.S. District Court for
the District of New Jersey, alleging violations of the antifraud
provisions.  Without admitting or denying the Commission's
allegations, Silver has consented to a proposed Final Judgment
that would enjoin him from future violations of the antifraud
provisions and impose a $25,000 civil penalty.  That proposed
judgment has been submitted for approval and entry by the Court.

     In July 1995, Davstar changed its name to Urohealth Systems,
Inc. and moved its headquarters to Costa Mesa, California.  On
December 7, 1995, the Commission issued an Order finding that, in
connection with the same underlying conduct, Davstar had violated
the antifraud and reporting requirements of the federal
securities laws.  Davstar consented to that Order, which required
Davstar to cease and desist from committing or causing such
violations, without admitting or denying the allegations.