==========================================START OF PAGE 1======

         UNITED STATES SECURITIES AND EXCHANGE COMMISSION

Litigation Release No. 15193 / December 19, 1996    

SECURITIES AND EXCHANGE COMMISSION v. MARK S. FERBER, 
Civil Action No. 96-12653-EFH (D. Mass.)

     On December 19, 1996, the Securities and Exchange Commission
filed a Complaint in the U.S. District Court for the District of
Massachusetts against Mark S. Ferber ("Ferber"), a former partner
of Lazard Freres & Co. ("Lazard").  In its Complaint, the
Commission alleged that Ferber failed to adequately disclose a
contract with Merrill Lynch, Pierce, Fenner & Smith Incorporated
("Merrill Lynch") to three of Lazard's financial advisory clients
that were serviced by Ferber and that selected Merrill Lynch to
provide underwriting, interest rate swap or other financial
services.  Simultaneously with the filing of the Complaint,
Ferber consented, without admitting or denying the allegations in
the Complaint, to a permanent injunction enjoining him from
future violations of the antifraud provisions and rule G-17 of
the Municipal Securities Rulemaking Board, which requires fair
dealing in the municipal securities markets.  Ferber also agreed
to pay disgorgement of $553,000, which represents his portion of
the financial advisory fees that he received, plus prejudgment
interest of $97,000, for a total of $650,000.

     The Complaint alleged that Ferber, on behalf of Lazard,
negotiated a lucrative contract with Merrill Lynch, which
provided that Lazard and Merrill Lynch would jointly market
interest rate swaps and that Lazard would be a consultant to
Merrill Lynch.  Pursuant to the contract, between September 1990
and November 1992, Merrill Lynch paid Lazard nearly $5.8 million,
which resulted in a substantial financial benefit to Ferber.

     The Complaint further alleged that the contract with Merrill
Lynch was a material fact that should have been disclosed to
Lazard's financial advisory clients that were serviced by Ferber
and were considering the selection of Merrill Lynch as a provider
of financial services - the Massachusetts Water Resources
Authority ("MWRA"), the District of Columbia ("the District") and
the United States Postal Service ("USPS").  The contract created
at least a potential conflict of interest for Ferber in that it
gave rise to a significant risk that Ferber would not provide
impartial advice to the financial advisory clients that were
considering the selection of Merrill Lynch as a provider of
financial services.  Thus, the contract created the potential for
Ferber to abuse his influence over the financial advisory
clients.

     The Complaint further alleged that Ferber knowingly or
recklessly failed to adequately disclose the contract to the
MWRA, the District and the USPS, all of which selected Merrill
==========================================START OF PAGE 2======

Lynch to provide underwriting, interest rate swap or other
financial services in connection with municipal securities
offerings and/or the purchase and sale of securities.  As a
result, Ferber defrauded these financial advisory clients and the
purchasers of their municipal securities in violation of Sections
10(b) and 15B(c)(1) of the Securities Exchange Act of 1934, Rule
10b-5 thereunder and rule G-17 of the Municipal Securities
Rulemaking Board.  

     The Commission investigation that led to this action was
conducted in close mutual cooperation with the Offices of the
United States Attorney for the District of Massachusetts and the
Attorney General of the Commonwealth of Massachusetts.