U.S. SECURITIES AND EXCHANGE COMMISSION
                                   Washington, D.C.

     Litigation Release No. 15412 / July 16, 1997

     SECURITIES AND EXCHANGE COMMISSION v. GRAY HAWK FUND COMPANY, a Delaware
     limited liability company; SALVATORE A. VECCHIO; AND FREDRICK J. RICE,
     Civil Action No. 97-5125 RAP (AJWx)

          On July 15, 1997, the Securities and Exchange Commission filed a
     complaint in federal district court in Los Angeles against Gray Hawk Fund
     Company, an oil and gas limited liability company based in Woodland Hills,
     California, and its principals, Salvatore A. Vecchio, age 51, of Los
     Angeles, California, and Fredrick J. Rice, age 38, of Simi Valley,
     California.  The Commission alleges that, from August 1994 through January
     1996, the defendants perpetrated a fraudulent investment scheme through
     which they raised approximately $1,055,000 from the sale of Gray Hawk
     securities to 75 investors nationwide, most of whom were elderly.  Vecchio
     and Rice misrepresented the use of investor proceeds and misused $474,500
     of investor funds, $179,350 of which was used for their own personal
     benefit.  Vecchio and Rice also falsely represented that investors were
     purchasing interests in wells that were already producing oil when, in
     fact, at no time during the sale of the Gray Hawk securities did the
     company have an interest in any producing wells.

          The Complaint alleges that Gray Hawk, Vecchio, and Rice violated the
     securities registration requirements of Sections 5(a) and 5(c) of the
     Securities Act of 1933, and the antifraud provisions of Section 17(a) of
     the Securities Act of 1933 and Section 10(b) of the Securities Exchange Act
     of 1934 and Rule 10b-5 thereunder, and that Vecchio and Rice violated the
     broker-dealer registration requirements of Section 15(a) of the Securities
     Exchange Act of 1934.  The Complaint seeks permanent injunctions,
     disgorgement with prejudgment interest, and civil penalties.

          Simultaneously with the filing of the Commission's Complaint, Gray
     Hawk, Vecchio, and Rice consented, without admitting or denying the
     allegations in the Complaint, to permanent injunctions enjoining them from
     future violations of the federal securities laws.  The Commission waived
     payment of disgorgement and prejudgment interest, and did not assess civil
     penalties based upon Vecchio's and Rice's demonstrated inability to pay.












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