FOR IMMEDIATE RELEASE                                    2000-144
                                
 SEC Brings Charges Against German Company E.ON (Formerly Veba)
                               for
     Deliberately Issuing False Statements Regarding Merger
                          Negotiations

     Washington, DC, September 28, 2000 -- The Securities and
Exchange Commission today brought and settled civil
administrative fraud charges against E.ON AG, Germany's third
largest industrial holding company and formerly known as Veba AG,
for issuing materially false denials concerning merger
negotiations with Viag AG, another German company over the course
of a month.  Without admitting or denying the Commission's
findings, E.ON agreed to cease and desist from future violations
of the U.S. federal securities laws.
     
     SEC Director of Enforcement Richard H. Walker said, "The
reach of U.S. securities laws is not limited by our borders.  In
today's global marketplace, false statements made overseas can
harm U.S. investors as much as statements made domestically.
Today's case reminds foreign issuers trading on U.S. markets that
they remain subject to our fraud laws even when speaking abroad."
     
     The Commission's Order specifically finds that, beginning
July 29, 1999 and continuing until August 31, 1999, Veba made a
series of statements in which it falsely denied press reports
that it was engaged in merger negotiations with Viag.  In
reality, as of July 29, the two companies had, among other
things, executed a confidentiality agreement, retained investment
bankers and legal advisors, exchanged financial forecasts, and
engaged in high-level talks concerning proposed deal structures,
valuation methods, corporate governance and other merger issues.
On September 1, 1999, Veba publicly acknowledged for the first
time that it had been engaged in merger negotiations and that it
had agreed with Viag on the framework of a merger.

     The Commission's Order finds that Veba's denials were widely
disseminated in Germany and were also reported in the United
States, resulting in a period of investor confusion.  Certain
denials, drafted by Veba in both German and English, were made
with the expectation that the denials would be covered by U.S.
publications.  The Order finds that Veba's senior management was
directly involved in drafting and approving public statements
that they knew were false.  In addition, Veba's denials were made
pursuant to a policy of "absolute denial" that was implemented at
the direction of Veba's Chief Executive Officer and Chairman of
its Board of Management.

     While the Commission's Order recognizes that disclosure
practices and laws regarding the existence of merger negotiations
may differ in other jurisdictions, it finds that "there is no
safe harbor for foreign issuers from violations of the antifraud
provisions of the U.S. federal securities laws."  As stated in
its Order, "[t]he Commission will not apply a different standard
with respect to foreign issuers commenting on merger discussions
or negotiations.  When a foreign issuer voluntarily avails itself
of the opportunities in the U.S. capital markets, it must adhere
to the U.S. federal securities laws."
     
     The Commission's Order emphasizes "`[t]he importance of
accurate and complete issuer disclosure to the integrity of the
securities markets . . . to the extent that investors cannot rely
upon the accuracy and completeness of issuer statements, they
will be less likely to invest, thereby reducing the liquidity of
the securities markets to the detriment of investors and issuers
alike.'  In the Matter of Carnation Company, Exchange Act Release
No. 22214 at 1030.  This fundamental principle applies to
statements made by foreign issuers just as fully as it applies to
statements made by domestic issuers.  Compliance with this
principle will serve to ensure transparency, foster investor
protection and confidence, and thus, enhance the liquidity of the
U.S. capital markets."
     
     The Commission acknowledges the assistance of the German
Federal Securities Supervisory Office (Bundesaufsichtsamt f�r den
Wertpapierhandel or "BAWe") in this matter.
     
Contact:  Paul R. Berger at (202) 942-4854
     
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