U.S. Securities and Exchange Commission


     LITIGATION RELEASE NO. 15376 \ May 29, 1997

     SEC v. Ted Harold Westerfield, 94 Civ. 6997 (JSM), U.S. District Court,
     Southern District of New York

          The Commission today announced that on May 23, 1997, the Honorable
     John S. Martin, U.S.D.J. issued an opinion and order granting the
     Commission s motion for summary judgment against Defendant Ted Harold
     Westerfield.  The Court determined that Westerfield violated antifraud
     provisions of the securities laws by engaging in a commission kickback
     scheme.  Westerfield, a broker with Gruntal & Co., agreed to kick back a
     portion of commissions he earned on the purchase and sale of high yield
     bonds ordered by Albert Griggs, Jr., a bond analyst and assistant portfolio
     manager with Keystone Custodian Funds, Inc.  

          The Commission had charged that the scheme defrauded both Keystone and
     its mutual fund investors, because its purpose was to enrich Westerfield
     and Griggs rather than obtain best execution of transactions for the
     Keystone investors.  Keystone investors also were defrauded in that they
     were not informed that Keystone, in exercising its investment advisory
     function, had agreed to execute purchases and sales of high yield bonds for
     Keystone's account through Westerfield, pursuant to his undisclosed
     kickback arrangement with Griggs.

          The Court held Westerfield liable for disgorgement of $210,931,
     representing commissions he received as a result of his agreement with
     Griggs, together with prejudgment interest of $133,896, for a total of
     $344,827.  The Court also determined that Westerfield should be enjoined
     from violating Section 10(b) of the Securities Exchange Act of 1934 [15
     U.S.C. 78j(b)] and Rule 10b-5 thereunder [17 C.F.R. 240.10b-5]; Section
     204 of the Investment Advisers Act of 1940 [15 U.S.C. 80b-4] and Rule 204-
     1 thereunder [17 C.F.R. 275.204.1]; and Section 17(e)(1) of the Investment
     Company Act of 1940 [15 U.S.C. 80a-17(e)(1)].

          The Court based its determination on a jury verdict in a related
     criminal case, US v. Westerfield, 95 Cr. 219 (LMM).  In that case, the
     Court sentenced Westerfield to 15 months of incarceration.  The Court in
     the criminal case also directed Westerfield to pay restitution in the
     amount of up to a total of $105,465.50, according to a schedule.  In the
     SEC s civil action, the Court stated that any amounts Westerfield actually
     pays toward this restitution may be offset against his disgorgement
     liability described above.







                                                   ======END OF PAGE 1======