UNITED STATES OF AMERICA
                                      before the
                          SECURITIES AND EXCHANGE COMMISSION



          SECURITIES EXCHANGE ACT OF 1934
          Rel. No.  41008 / February 1, 1999

          Admin. Proc. File No. 3-9394

        __________________________________________________
                                           _               :
              In the Matter of the Application of          :
                                                           :
                       KENNETH C. KRULL                    :
                     7302 77th Drive, N.E.                 :
                 Marysville, Washington  98270             :
                                                           :
          For Review of Disciplinary Action Taken by the   :
                                                           :
          NATIONAL ASSOCIATION OF SECURITIES DEALERS, INC. :
                                                           :
        ____________________________________________________

          ORDER DENYING REQUEST FOR RECONSIDERATION

               On December 10, 1998, we issued an opinion sustaining

          disciplinary action taken by the National Association of

          Securities Dealers, Inc. ("NASD") against Kenneth C. Krull,

          formerly a registered representative and principal of Investment

          Management and Research, Inc. ("the Firm"), a member of the NASD.

          [1] Krull now requests a "partial" reconsideration of our

          decision.

               We found that Krull violated NASD suitability standards by

          engaging in a widespread pattern of switching customers from one

          front-end load mutual fund to another, thereby placing his own

          interests in garnering commissions above those of his customers.

          We accordingly sustained most of the sanctions imposed on Krull

          by the NASD: censure, a $20,000 fine, a bar in any principal or

          supervisory capacity, a one-year suspension in all capacities,

          and restitution. [2]

               Krull argues that, in sustaining the bulk of the NASD's

          sanctions, we failed to consider "vital exculpatory evidence"

          showing that his misconduct was simply the result of "mistake."

          The "evidence" he cites consists of (1) statements made to the

          NASD's District Business Conduct Committee by a staff attorney

          indicating her belief that Krull acted in good faith, and (2)

          testimony by another NASD staff member to the effect that one of

          Krull's legal defenses might have merit.

               We considered the statements to which Krull refers.

          However, like the NASD's adjudicatory bodies, we concluded on the

          basis of the evidence that Krull did not act in good faith.  We

          further determined, as did the NASD, that Krull had no valid

          defense to the charges against him.

               Krull further contends that the one-year suspension imposed

          on him is a penalty for his past misconduct and serves no valid

          remedial purpose.  He argues that it is well-established that

          sanctions imposed by the Commission must have a remedial rather

          than a punitive purpose.

               We note initially that the sanctions in this matter were

          imposed by the NASD, not by this Commission.  Section 19(e)(2) of

          the Securities Exchange Act of 1934 [3] limits our review of NASD

          sanctions to a determination of whether the sanctions are

          excessive or oppressive, or impose an undue burden on

          competition.  Based on our review of the record, we were unable

          to conclude that the sanctions contravened the statutory

          standards.

               In any event, we do not agree with Krull's claim that he

          does not pose any present threat to the investing public.  As the

          NASD found, Krull's misconduct was both extensive and egregious.

          He knowingly flouted the Firm's policies, deliberately concealed

          his actions from the Firm, and ignored his customers' best

          interests in favor of increasing his own profits.  The sanctions,

          particularly the one-year total exclusion from the securities

          business, will serve to impress upon Krull the seriousness of his

          misconduct, and reduce the likelihood of any recurrence of such

          behavior if he returns to the industry.

               Accordingly, IT IS ORDERED that the petition for

          reconsideration filed by Kenneth C. Krull be, and it hereby is,

          denied.

               By the Commission.



                                                  Jonathan G. Katz
                                                     Secretary

          **FOOTNOTES**

          [1]: Kenneth C. Krull, Securities Exchange Act Release No. 40768,
               ___ SEC Docket ___.

               [2]:We reduced the amount of restitution ordered by the NASD
               to   accord  with  the  amount  specified  in  the  parties'
               stipulation.

               [3]: 15 U.S.C. § 78s(e).