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             U. S. Securities and Exchange Commission

Litigation Release No. 15141 / October 30, 1996

SECURITIES AND EXCHANGE COMMISSION v. SHAHRYAR SOROOSH United
States District Court for the Northern District of California,
No. C-96-3933-VRW.  

     The Securities and Exchange Commission filed a complaint
against Shahryar Soroosh, a software engineer at Octel
Communications Corp. ("Octel"), alleging that Soroosh engaged in
massive illegal insider trading in three separate brokerage
accounts just before the company's announcement last Thursday
which caused the price of Octel stock to drop more than 35% of
its value the next day.  The Commission alleged that the Soroosh
stood to profit more than $500,000 through his illegal trading.  

     The Commission obtained an emergency order freezing
Soroosh's assets in the three brokerage accounts pending a
hearing on Thursday, October 31, 1996 at 10:00 a.m. (P.S.T.)
concerning the Commission's request for a temporary restraining
order and other emergency relief.  

     The complaint alleges that on October 24, 1996, after the
close of the market, Octel announced that a software upgrade
would be delayed three to six months, which the news media
reported could reduce revenues by $20 to $40 million in Octel's
second fiscal quarter ending December 31, 1996 and third fiscal
quarter ending March 31, 1997.  The next day Octel stock tumbled
from $24.50 per share to $15.75 per share--a 35.8% drop.  The
Commission alleged that Soroosh knew about the delay of the
software release when he traded.

     The complaint alleges that Soroosh traded through at least
three separate brokerage accounts up to the day before the
announcement.  In one account, between October 18 and October 23,
Soroosh sold short 18,000 shares of Octel stock, and on October
21 he purchased 40 put option contracts.  Between October 8 and
October 23, in a second account, Soroosh sold short an additional
9,000 shares of Octel stock and purchased an additional 40 put
option contracts.  Finally, on October 21, 1996--only three days
before the public announcement-- Soroosh opened a third account
and sold short 4,000 more shares of Octel stock.  In total, by
the close of business on October 24, 1996, the day preceding
Octel's announcement, Soroosh had sold short 35,000 common shares
of Octel stock and purchased 80 put options.  

     The complaint also alleges that Soroosh's trading violated
Octel's prohibitions on employee trading five business days prior
to earnings announcements.  
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     The complaint, filed in the United States District Court for
the Northern District of California, seeks a permanent injunction
against Soroosh from violating Section 10(b) of the Securities
Exchange Act and Rule 10b-5, disgorgement and civil penalties. 
The Commission acknowledges the assistance of NASD Regulation,
Inc. in this matter.