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                SECURITIES AND EXCHANGE COMMISSION
                         Washington, D.C.

Litigation Release No. 15240 / February 3, 1997

Accounting and Auditing Enforcement 
Release No.  875 / February 3, 1997 

SECURITIES AND EXCHANGE COMMISSION v. NICHOLAS J. PACE and EUGENE
R. VALENTINE, United States District Court for the Northern
District of Ohio, Civil Action No. 5:95CV1999 (Dowd).

     The Securities and Exchange Commission announced that on
January 24, 1997, the United States District Court for the
Northern District of Ohio issued an injunction by consent against
Nicholas J. Pace ("Pace") of Canton, Ohio.  The injunction
prohibits Pace from violating Section 17(a) of the Securities Act
of 1933, Section 10(b) of the Securities Exchange Act of 1934
("Exchange Act") and Rules 10b-5, 13b2-1 and 13b2-2.  It also
bars Pace from acting as an officer or director of a public
company pursuant to Section 21(d) of the Exchange Act.  The
court's order also requires Pace to disgorge $742,500 plus
prejudgment interest of $299,677.42 and postjudgment interest. 
Pace was not ordered to pay a civil penalty contingent on the
truthfulness of the representations in Pace's Financial
Statements and financial documents.  The order provides that the
Commission may move to waive collection of part of the
disgorgement after Pace provides additional information regarding
his finances.  Pace was formerly the chief financial officer of
Valley Systems, Inc. ("Valley"), a publicly held industrial
cleaning company headquartered in Canal Fulton, Ohio.

     The Commission filed its Complaint against Pace and three
other individuals on September 14, 1995.  The Complaint alleged
that Pace engaged in a fraudulent scheme that resulted in
Valley's filing with the Commission three quarterly reports that
materially overstated net income.  According to the Complaint,
the overstatements of net income resulted from improperly
capitalizing certain costs, understating workers' compensation
insurance expenses, and improperly recording loans from officers
as revenue.  The Complaint further alleged that Pace falsified
certain of Valley's books and records, provided false
explanations to Valley's auditors for amounts capitalized and
falsely claimed that monies loaned to Valley were revenue from
sales of equipment.  In addition, the Complaint alleged that
after Valley's fourth quarter of fiscal 1992, Pace recorded $1.14
million in fictitious revenue in Valley's books and records as of
the last day of the fourth quarter, then told Valley's auditors
that the fictitious revenue derived from the sale of Valley's
cleaning services.  Finally, the Complaint alleged that Pace sold
50,000 shares of Valley's common stock when he knew that Valley's
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publicly reported financial results were materially overstated,
and thereby avoided losses of $742,500.

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     Pace consented to the entry of the injunction and order of
disgorgement without admitting or denying the allegations in the
Complaint.  See Litigation Release No. 14637/AAER No. 708.