James R. Harrold, Franklin Management and Consulting, LLC, Accipter, LLC, Franklin Asset Management and Consulting, LLC, Franklin Management and Consulting, Inc., and Concord Development Group, LLC.

Litigation Release No. 17132 / September 18, 2001

U.S. Securities and Exchange Commission v. James R. Harrold, Franklin Management and Consulting, LLC, Accipter, LLC, Franklin Asset Management and Consulting, LLC, Franklin Management and Consulting, Inc., and Concord Development Group, LLC., U.S. District Court for the Southern District of Indiana, Cause No. IP 01-1318-C H/G (S.D. Indiana 2001)

The U.S. Securities and Exchange Commission ("Commission") announced that on September 14, 2001, the Honorable Judge David F. Hamilton of the United States District Court for the Southern District of Indiana entered an Order of Permanent Injunction against James R. Harrold ("Harrold"), a resident of Indianapolis, Indiana and the Entity Defendants. On Friday, September 7, 2001, the Commission filed a Complaint alleging that Harrold and the Entity Defendants raised approximately $2 million in a fraudulent prime bank scheme and sought temporary and emergency relief. On the same day Judge Hamilton entered a Temporary Restraining Order freezing three accounts controlled by Harrold and set a hearing for Monday, September 10, 2001. On September 10, 2001, Judge Hamilton entered a Temporary Restraining Order freezing all of Harrold and the Entity Defendants' assets and granted other ancillary relief.

The Commission's Complaint alleged that the Federal Bureau of Investigation warned Harrold in October 1999 that prime trading programs do not exist. Despite that warning, however, since October 1999 through at least February 2001, Harrold and the Entity Defendants raised at least $2 million by selling investments in the Rubix Program, a purported "prime bank trading program." The Complaint further alleged that Harrold and the Entity Defendants are currently soliciting investors to invest in at least two other fraudulent investment programs.

In the Rubix Program, Harrold and the Entity Defendants made false claims that the money raised would be used to purchase prime bank debentures issued by top world banks. Numerous government agencies, including the Commission, the Federal Deposit Insurance Corporation and the Board of Governors of the Federal Deposit Systems, however, have warned the public that trading programs in prime bank instruments do not exist and are fraudulent. The Complaint also alleged that Harrold and the Entity Defendants misrepresented to investors in the Rubix Program that their principal was never at risk and promised a 20% monthly rate of return. The Complaint further alleged that the majority of funds raised in the Rubix Program were misappropriated and used for business and personal expenses.

The Order, entered pursuant to Harrold and the Entity Defendants' consents and without admitting or denying the allegations contained in the Commission's Complaint, permanently enjoins Harrold and the Entity Defendants from further violating Sections 5(a), 5(c) and 17(a) of the Securities Act of 1933, Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder. In addition, the Order freezes all of Harrold and the Entity Defendants' assets, requires the repatriation of assets, prohibits Harrold and the Entity Defendants from destroying any documents, orders Harrold and the Entity Defendants to account for all their ill-gotten gains and orders Harrold and the Entity Defendants to disgorge their ill-gotten gains and pay civil penalties in an amount to be determined in a separate hearing by the Court.