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UNITED STATES SECURITIES AND EXCHANGE COMMISSION


Litigation Release No. 14866 / April 9, 1996


SECURITIES AND EXCHANGE COMMISSION v. KS RESOURCES, et al., Civil
Action No. 95-8608WDK(AJWx)(C.D. Cal.).

The Securities and Exchange Commission announced that on April 4,
1996, the Honorable William D. Keller, United States District
Judge for the Central District of California, issued a
preliminary injunction and continued the asset freezes against KS
Resources ("KS"), Weststar Exploration, Inc. ("Weststar"), John
K. Judd, Jr. ("Judd"), Mark D. Seigel ("M. Seigel"), and
Alexander L. Kahan ("Kahan").  The Court also continued the asset
freezes against the relief defendants Guardian Industries, Inc.,
Pathfinder Minerals Group, Inc., Alex Kahan Enterprises, Inc.,
Mid-West Production, Inc., Jamie B. Seigel, and 29 oil and gas
limited partnerships.  Previously, a now defunct broker-dealer,
Lazar Frederick & Company ("Lazar"), and its President, Betty A.
Rubin, consented to the entry of the preliminary injunction
without admitting or denying the Commission's allegations.  In
conjunction with the preliminary injunction, the Court also
appointed a permanent receiver over KS and Weststar.

     The Commission's complaint, filed December 19, 1995, alleges
that the Defendants fraudulently offered and sold securities in
the form of 29 oil and gas limited partnerships ("Partnerships")
from May 1993 through the present, raising approximately
$34,934,000 from investors, many of whom are elderly.  The
complaint alleges that Lazar's sales agents cold-called
prospective investors and represented that the Partnerships would
purchase oil and gas lease interests which would pay investor
returns, when in fact, the Defendants paid a substantial portion
of the so-called "returns" with investor monies.  The Commission
further alleges that Defendants KS, Weststar, Judd, M. Seigel,
and Kahan have misused and misappropriated at least
$6,034,483.35.  See Litigation Release No. LR-14766.

     In conjunction with its ruling, the Court found that the
Commission demonstrated a strong likelihood of success on the
merits of its case, and the facts evidenced many indications of
fraud, including:  

     (a)  Weststar's commingling of funds;
     (b)  M. Seigel's prior regulatory censure;
     (c)  Substantial payments to the Defendants;
     (d)  Weststar's large mark-ups of oil and gas properties
          sold to the Partnerships;
     (e)  Payments to investors which exceeded income, indicating
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          a "Ponzi" scheme; 
     (f)  Failure to obtain independent oil and gas property
          valuations; and
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     (g)  That the Commission's evidence shows that the current
          value of the oil and gas properties held by the
          Partnerships is only approximately $2 million.