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         UNITED STATES SECURITIES AND EXCHANGE COMMISSION

Litigation Release No. 15230 / January 29, 1997


SECURITIES AND EXCHANGE COMMISSION v. JAY MARCUS, 97 Civ. 462
(CBA) (E.D.N.Y. Jan. 29, 1997)

     The Securities and Exchange Commission filed a Complaint
today charging Jay Marcus, former president of Halsey Drug Co.,
Inc., with (1) violations of the antifraud provisions of the
federal securities laws based upon Marcus' insider trading and
(2) violations of the antifraud and reporting provisions of the
federal securities laws arising from Halsey's filing of false
annual reports with the Commission.

     The Complaint alleges that from at least January 1990
through March 1993, Halsey,  whose principal place of business is
in Brooklyn, New York, manufactured and sold certain adulterated
generic drugs.  Marcus knew of the drug adulteration and that the
adulteration was being concealed from the United States Food and
Drug Administration ("FDA") and the public.  In February 1992,
while in possession of material, non-public information regarding
Halsey's manufacture and sale of adulterated drug products,
Marcus sold 70,000 shares of Halsey common stock.  After Halsey's
March 30, 1993 public disclosure regarding its manufacture and
sale of adulterated drug products, the price of Halsey's stock
dropped approximately 49%.  Additionally, Halsey filed materially
false and misleading annual reports with the Commission for
fiscal years ended December 31, 1990 and 1991.  Marcus reviewed
and signed these annual reports, knowing that they were
materially false and misleading.

     The Complaint seeks the following relief: (1) a permanent
injunction against future violation of the federal securities
laws; (2) disgorgement of an amount equal to the losses Marcus
avoided by selling shares of Halsey stock prior to the public
announcement regarding Halsey's adulteration of drug products,
plus prejudgment interest; (3) civil penalties for insider
trading and violations relating to Halsey's filing of a false and
misleading annual report for the fiscal year ended December 31,
1991; and (4) an order barring Marcus from serving as an officer
or director of any public company.

     In a related proceeding, on January 29, 1997 the Commission
simultaneously instituted and settled an administrative
proceeding against Halsey.  There, the Commission made findings
that Halsey's annual reports for fiscal years ended December 31,
1990 and 1991 were materially false and misleading because they
failed to disclose that Halsey was not manufacturing drugs in
accordance with certain standards promulgated by the FDA, but was
using unapproved formulas and procedures, and Halsey employees,
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at management's direction, were concealing product adulteration
from the FDA.  These annual reports also failed to disclose that
since Halsey was not manufacturing generic drugs in accordance
with certain FDA standards, FDA approval for any or all of
Halsey's new products could be adversely affected.  Halsey
neither admitted nor denied these findings, but consented to the
entry of Commission's Order requiring Halsey to cease and desist
from committing or causing any violation and any future violation
of the antifraud and reporting provisions of the federal
securities laws.  (See In the Matter of Halsey Drug Company,
Inc., Release No. 34-38210 (Jan. 29, 1997).