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         UNITED STATES SECURITIES AND EXCHANGE COMMISSION

LITIGATION RELEASE NO. 14965 / June 27, 1996

SEC v. FRANK J. CUSTABLE, JR. AND F.C. FINANCIAL CORPORATION
(N.D. Ill., Civil Action File No. 94C-3755)

The Securities and Exchange Commission (Commission) announced
that on June 20, 1996, the Honorable John A. Nordberg of the
United States District Court for the Northern District of
Illinois granted the Commission's Motion for the Imposition of a
Civil Penalty (Motion) and ordered Defendants Frank J. Custable,
Jr. (Custable) and F.C. Financial Corporation (FCF) to pay a
civil penalty of $60,000.  The Court also ordered Defendant
Custable to submit a plan for payment of the $60,000 penalty to
the Court within 21 days of the Order.  Additionally, the Court
denied the Commission's Motion for Prejudgment Interest in the
amount of $31,097.75 on the basis that Custable "paid in excess
of $30,000 to repair and maintain the mobile homes" certain
investors' collateral.

Previously, on March 10, 1995, the Court granted, in principle,
the Commission's Motion.  At that time, the Court held that the
allegations in the Amended Complaint, which the Defendants agreed
not to contest as part of their consent to the Agreed Order
discussed below, established that the Defendants created a
substantial risk of loss, qualifying them for the third tier of
civil penalty pursuant to Section 21(d)(2)(C) of the Securities
Exchange Act of 1934 (Exchange Act).  However, the Court
requested additional briefing with regard to the amount of
penalty to be assessed against the Defendants.

The Complaint and Amended Complaint, filed on June 20, 1994 and
July 11, 1994, alleged that from at least June 1992 to July 11,
1994, Defendants Custable and FCF offered and sold notes, secured
by real property and personal property in the form of mobile
homes, and limited partnership interests in such notes by cold
calling the public.  As a result of such activities, the
Defendants raised at least $1.8 million from the sale of at least
108 notes to at least 89 investors.  The Amended Complaint also
alleged that Custable and FCF, a company owned, managed and
operated by Custable, were misrepresenting and omitting to state
material facts to investors regarding, among other things, the
nature, liquidity and risks of the investment as well as their
disciplinary histories with securities regulators.

On December 22, 1994, the Court entered an Agreed Order by
consent against the Defendants which permanently enjoined them
from future violations of Sections 17(a)(1), 17(a)(2) and
17(a)(3) of the Securities Act of 1933 and Section 10(b) of the 
Exchange Act and Rule 10b-5 thereunder.  The Order also required
the Defendants to pay $324,970.42 in disgorgement and $30,000 for
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repair work necessary to preserve certain investors' collateral. 


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Additionally, the Order lifted the freeze on the Defendants'
assets previously ordered by the Court.  Further, the Order set
forth a schedule for the parties to brief the issue of the
appropriateness of prejudgment interest and civil penalties. 
Finally, the Order set forth that, in regard to future litigation
relating to prejudgment interest and civil penalties, the
Defendants could not contest the veracity of the allegations in
the Amended Complaint.

For further information, see Litigation Release Nos. 14131 (June
22, 1994) and 14374 (January 4, 1995).