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         UNITED STATES SECURITIES AND EXCHANGE COMMISSION

Litigation Release No. 15206 / January 6, 1997

Accounting and Auditing Enforcement
Release No. 868 / January 6, 1996 

SECURITIES AND EXCHANGE COMMISSION v. MATTHEW E. KLENOVIC, THOMAS
R. YEARMS, and CHRISTOPHER P. VELTMANN, United States District
Court for the Middle District of Florida, No. 94-909-Civ-T-23E   

 
     The Securities and Exchange Commission announced that the
Honorable Steven D. Merryday issued Orders of Permanent
Injunction against Matthew E. Klenovic ("Klenovic") and Thomas R.
Yearms ("Yearms"), by consent, on December 24, 1996.  The
Commission's action arose out of a three year scheme perpetrated
by Klenovic, Yearms and a third defendant, Christopher P.
Veltmann ("Veltmann").  The Orders permanently enjoin Klenovic
and Yearms from violating the registration and antifraud
provisions of the Securities Act of 1933 ("Securities Act") and
the antifraud and reporting provisions of the Securities Exchange
Act of 1934 ("Exchange Act").  Klenovic is further enjoined from
creating and providing false information to an auditor in
violation of the Exchange Act.  The Orders further require
Klenovic to pay $1,474,934 in disgorgement but does not require
any payment of the disgorgement, or any civil penalty from
Klenovic or Yearms, based on their demonstrated financial
inability to pay.  Finally, the Orders bar Klenovic and Yearms
from serving as an officer or director of a public company for a
period of five years.  

     Between December 1987 and April 1991 the defendants engaged
in a multi-faceted scheme designed to mislead the public
regarding, among other things, the financial status of Standard
Oil and Exploration of Delaware, Inc. ("STDO"), an oil and gas
drilling company not associated with Standard Oil of Delaware. 
As part of their scheme, Klenovic provided false information to
STDO's auditors.  The defendants also caused false and misleading
information regarding the company's assets and liabilities and
the background of its management to be included in its public
disclosure documents.  Klenovic and Yearms also misappropriated
investor funds from partnerships that were to have been managed
by STDO and used the money for STDO operations and for their
personal expenses.  The defendants failed to file with the
Commission required documents disclosing their beneficial
ownership of STDO stock.  Further, the defendants sold
unregistered securities of STDO.  Finally, in furtherance of the
scheme, Veltmann managed a transfer agent, Sarasota Trust and
Transfer ("ST&T") in violation of Commission rules.  An order
permanently enjoining Veltmann from violations of the
registration and antifraud provisions of the Securities Act and
the antifraud, reporting and transfer agent provisions of the
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Exchange Act was issued, by consent, in August 1996.  Veltmann
was also barred from serving as an officer or director of a
public company for a period of five years.

     The Orders permanently enjoin Klenovic, Yearms and Veltmann
from violating Sections 5(a), 5(c) and 17(a) of the Securities
Act, Sections 10(b), 13(d) and 16(a) of the Exchange Act and
Rules 13d-1 and 13d-2 and 16a-1 promulgated thereunder.  Klenovic
is also permanently enjoined from violating Rules 13b2-1 and
13b2-2 promulgated pursuant to the Exchange Act while Veltmann
was permanently enjoined from violating Section 17A of the
Exchange Act and Rules 17Ad-5, 17Ad-6, 17Ad-7, 17Ad-10, 17Ad-12
and 17Ad-13 promulgated pursuant to the Exchange Act.

NOTE:
See related Litigation Release No. 15206a for further information:
http://www.sec.gov/enforce/litigrel/lr15206a.txt