UNITED STATES SECURITIES AND EXCHANGE COMMISSION


             SECURITIES EXCHANGE ACT OF 1934
             Release No.  41240 / April 1, 1999

             ACCOUNTING AND AUDITING ENFORCEMENT
             Release No.   1121 / April 1, 1999

             ADMINISTRATIVE PROCEEDING
             File No. 3-9862

             ADMINISTRATIVE PROCEEDINGS INSTITUTED AGAINST KPMG AUDIT
             PARTNER

                  The Commission has instituted administrative
             proceedings pursuant to Rule 102(e) of the Commission’s
             Rules of Practice against Carroll A. Wallace, CPA
             ("Wallace"), audit engagement partner with KPMG Peat
             Marwick, LLP in its Denver office, charging that he engaged
             in improper professional conduct by recklessly violating
             professional auditing and accounting standards in connection
             with his audit of the 1994 and 1995 financial statements of
             the Rockies Fund, Inc. ("the Fund"), a business development
             company based in Colorado Springs.

                  Previously, the Commission instituted administrative
             and cease-and-desist proceedings against the Fund, its
             president and independent members of its board of directors.
             The Division of Enforcement alleged that at the end of the
             Fund’s 1994 and 1995 calendar years, 40% and 21%
             respectively, of the Fund’s reported net assets consisted of
             securities issued directly to the Fund by Premier Concepts,
             Inc. ("Premier").  At the end of the 1994 calendar year, the
             Fund falsely designated these restricted securities as
             unrestricted, and, at the end of both calendar years,
             contrary to Generally Accepted Accounting Principles
             ("GAAP") and the Fund’s own valuation policy, overvalued the
             securities as if they could be sold at the bid price for
             unrestricted securities, skewing the valuations even further
             in 1995 by using the highest of three year-end bid prices.
             As a result, the Fund’s reported net assets were overstated
             by 27% in 1994 and 12% in 1995.  The case was tried before
             an Administrative Law Judge and the parties are awaiting an
             initial decision.  In the Matter of the Rockies Fund, Inc.,
             Stephen Calandrella, Charles Powell, Clifford Thygesen and
             John Power, Admin. Proc. File No. 3-9615; Rels. No. 34-
             40049, IC-23229.

                  In the Order Instituting Public Administrative
             Proceedings ("Order") against Wallace, the Division of
             Enforcement alleges that he did not conduct the 1994 and
             1995 audits of the Fund’s financial statements in accordance
             with Generally Accepted Auditing Standards ("GAAS").  The
             Order alleges that Wallace failed to comply with GAAS in
             that he failed to adequately plan the audits; obtain
             sufficient competent evidential matter concerning the
             procedures and bases for the valuation of the Premier stock
             by the Fund’s board of directors; and failed to maintain an
             attitude of professional skepticism by ignoring indications
             that the Fund’s valuations of the Premier securities were
             inflated and by failing to appropriately question
             representations made to the auditors by the Fund’s
             management.  Finally, the Order alleges that Wallace engaged
             in improper professional conduct by failing to assure that
             the Fund’s financial statements complied with GAAP in that
             Fund’s 1994 and 1995 financial statements materially
             overstated net assets due to the improper classification of
             the Premier securities.

                  A hearing will be held before an administrative law
             judge to determine whether the staff's allegations are true,
             and if so, whether Wallace should be censured or temporarily
             or permanently disqualified from, and denied the privilege
             of appearing or practicing before the Commission.



                1