UNITED STATES SECURITIES AND EXCHANGE COMMISSION


     Litigation Release No. 15480 / September 8, 1997
       
     Securities and Exchange Commission v. Phoenix Continental Corporation,
     Michael T. Honey, and Robert Johnston, Civil Action No. 97-6600-Civ-Davis

          The Securities and Exchange Commission ( Commission ) announced that
     on May 28, 1997, the Federal District Court for the Southern District of
     Florida entered permanent injunctions against Phoenix Continental
     Corporation ( Phoenix ), Michael T. Honey ( Honey ), and Robert Johnston
     ( Johnston ), and appointed a Special Master to marshal the assets of
     Phoenix. The Order enjoins Phoenix, Honey, and Johnston from future
     violations of Sections 5(a), 5(c), and 17(a) of the Securities Act of 1933,
     and Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5
     thereunder. Phoenix, Honey, and Johnston consented to the entry of the
     permanent injunctions without admitting or denying the Commission s
     allegations.

          Phoenix, a Florida Corporation with its principal offices in Pembroke
     Pines, is engaged in the business of refurbishing, leasing, selling, and
     financing the sale of used aircraft in the small to medium size range to
     corporations and individuals. Honey, of Boca Raton, Florida, is Phoenix s
     president, and Johnston, of Bloomfield Hills, Michigan, is Phoenix s vice-
     president. Phoenix represented that money raised through the sale of
     promissory notes ( Notes ) was to provide the financial base from which
     borrowers could finance aircraft leases and purchases. 

          The Commission s Complaint, filed on May 15, 1997, alleged that from
     at least December 1994 until May 1997, Phoenix offered and sold the Notes
     to investors through Honey, Johnston, and a number of independent sales
     agents. According to the Complaint, Phoenix fraudulently raised $11.3
     million through the sale of the Notes to at least 130 investors in numerous
     states. The Commission alleged in its Complaint that Phoenix falsely
     represented in its offering materials that investors  funds were fully (and
     in some cases up to 150%) secured through liens on aircraft filed and
     recorded with the Federal Aviation Administration. The Complaint alleged
     that, in fact, no more than 60% of investor funds were protected. The
     Complaint also alleged that Phoenix failed to disclose to investors that
     Johnston has a history of securities violations, including being
     permanently enjoined from violating the federal securities laws, and being
     permanently barred from the securities industry. The Complaint further
     alleged that the defendants misrepresented Phoenix s financial position and
     the size of the company s fleet of planes. 



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          The Commission also alleged in its Complaint that Phoenix, Honey, and
     Johnston violated the registration provisions of the federal securities

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     laws by offering and selling the Notes when no registration statement had
     been filed, and no exemption from registration was available. 



















































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