SECURITIES AND EXCHANGE COMMISSION

     Litigation Release No. 15630 / January 29 , 1998

     SECURITIES AND EXCHANGE COMMISSION v. JAMES PANNONE AND SAKURA GLOBAL
     CAPITAL, INC., United States District Court for the Western District of
     Oklahoma, Civ 98-146L

          The Securities and Exchange Commission announced that on January 29,
     1998, it filed a Complaint in the United States District Court for the
     Western District of Oklahoma against James Pannone, a former vice president
     of the Oklahoma Public Finance Office of Stifel, Nicolaus & Company, Inc.
     ("Stifel"), a broker-dealer registered with the Commission, and Sakura
     Global Capital, Inc. ("Sakura"), a subsidiary of Sakura Bank that is
     engaged in the business of selling derivatives.  The Complaint alleges that
     the defendants committed fraud in connection with the sale of municipal
     securities.  The Complaint alleges that in two municipal bond transactions
     underwritten by Stifel, Pannone engaged in bid-rigging to ensure Sakura's
     selection as the provider of the forward purchase agreements ("forwards")
     to the issuers.  The Complaint also alleges that in those same securities
     transactions, Pannone and Sakura made materially misleading statements
     and/or affirmative misrepresentations to the issuers with respect to
     undisclosed payments that Sakura made to Stifel.  The Complaint alleges
     that these undisclosed payments jeopardized the tax-exempt status of the
     bonds.

          The Complaint alleges that in a 1992 transaction for the Oklahoma
     Turnpike Authority, despite bond counsel's requirement that three
     competitive bids be obtained for the forward, Pannone rigged the bidding to
     ensure Sakura's selection as the forward provider.  The Complaint also
     alleges that Pannone subsequently negotiated with Steven Strauss, Sakura s
     then managing director in charge of municipal securities transactions, a
     $6.593 million undisclosed brokerage fee to be paid by Sakura to Stifel,
     and that Pannone falsely described to the Turnpike Authority the bidding
     and negotiation process of the forward.  The Complaint further alleges that
     the forward purchase agreement stated that Sakura did not intend to take
     any actions which would jeopardize the tax-exempt status of the bonds.  The
     Complaint alleges that at the time Sakura executed the forward it was
     planning to pay a $6.593 million brokerage fee to Stifel, and that Sakura
     knew or was reckless in not knowing that such a brokerage fee would
     jeopardize the tax-exempt status of the bonds.  

          The Complaint also alleges that in a 1992 transaction for the Sisters
     of St. Mary's Health Care Obligated Group, despite bond counsel's
     requirement that three competitive bids be obtained for the forward,
     Pannone rigged the bidding to ensure Sakura's selection as the forward
     provider.  The Complaint further alleges that at the request of bond
     counsel, Pannone and Strauss provided certificates stating that Sakura
     would not make any payments, other than certain payments to the issuer, in
     connection with the forward.  The Complaint alleges that Sakura made a
     $100,000 payment to Stifel and that Pannone concealed the payment by
     booking it to a different transaction. 

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          The Complaint alleges that by their conduct, Pannone and Sakura
     violated Section 17(a) of the Securities Act of 1933, Section 10(b) of the
     Securities Exchange Act of 1934 ("Exchange Act") and Rule 10b-5 thereunder,
     and that Pannone also violated Section 15B(c)(1) of the Exchange Act and
     Rule G-17 of the Municipal Securities Rulemaking Board.  The Complaint
     seeks relief including a permanent injunction barring Pannone and Sakura
     from future violations of those provisions and the imposition of civil
     monetary penalties.

          The Commission previously sued Stifel, Robert Cochran, Stifel's former
     executive vice president in charge of its Oklahoma Public Finance Office,
     and Steven Strauss in connection with these transactions.  The Commission
     settled its action against Stifel.  The Commission's litigation is ongoing
     with respect to Cochran and Strauss.  See Lit. Rel. No. 15569 (Nov. 24,
     1997); Lit. Rel. No. 14644 (Sept. 20, 1995); and Lit. Rel. No. 14587 (Aug.
     3, 1995). 





































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