SECURITIES AND EXCHANGE COMMISSION Litigation Release No. 15634 / February 3, 1998 Securities and Exchange Commission v. First Zurich National U.S.A., LLC and Compunomics 139, Inc. Civil Action No. 98-CV-29D (USDC Wy.) On February 2, 1998, the U.S. Securities and Exchange Commission (the "Commission") filed an emergency action seeking to halt an affinity fraud being promoted over the internet and targeting African Americans. On February 3, 1998, the Commission obtained a temporary restraining order, including an asset freeze, from the United States District Court for the District of Wyoming against First Zurich National U.S.A., LLC ("First Zurich"), a Wyoming limited liability company ("LLC") and Compunomics 139, Inc. ("Compunomics"), a Belizean corporation based in southern California and the corporate parent of First Zurich. The Commission has received substantial assistance in this case from the California Department of Corporations, the Wyoming State Securities Division and the Cheyenne, Wyoming office of the United States Postal Inspection Service. Compunomics has been offering and selling First Zurich stock since at least April 1997, which Compunomics claims has been operating as a "global internet bank" since November 1997. The Commission alleges that First Zurich and Compunomics have failed to disclose to prospective and current investors that First Zurich cannot legally operate as a bank. The Office of the Comptroller of the Currency has not granted a national bank charter to First Zurich nor has the Wyoming State Banking Board authorized First Zurich to conduct banking operations. Moreover, First Zurich, as a Wyoming LLC, is not permitted under Wyoming corporate law to conduct banking operations. The Commission further alleges that Compunomics has been offering and selling First Zurich stock to its current shareholders and has made a sales presentation to a national church conference attended by approximately 30,000 individuals. Compunomics is promoting First Zurich on the internet, as well as through written materials and promotional meetings. The Commission alleges that the defendants are seeking to raise $60 million from 5,000 investors over a ten-year period and are currently receiving a minimum of between $50,000 and $75,000 per month from at least 500 and possibly as many as 750 investors nationwide. Investors have signed option agreements obligating them to purchase a fixed amount of First Zurich's stock for $1.25 per share by making an initial $98 payment and then monthly minimum payments of $99 for ten years, representing a total investment of $11,978 per investor. The Commission's complaint charges that the defendants have violated the antifraud provisions of the federal securities laws -- 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. Investors are again advised to read the SEC's "Cyberspace" Alert before purchasing any investment promoted on the internet. The free ======END OF PAGE 1====== publication, which alerts investors to the telltale signs of online investment fraud, is available on the Investor Assistance and Complaints link of the SEC's Home page on the World Wide Web . It can also be obtained by calling 800-SEC-0330. Investors are encouraged to report suspicious internet offerings (or other suspicious offerings) via e-mail to . A user- friendly form to assist you in making a report is available at the Enforcement Complaint Center on the Enforcement Division link of the SEC Home Page. Investors can also mail a report to the SEC's Enforcement Complaint Center, Mail Stop 8-4, 450 Fifth Street, N.W., Washington, D.C. 20549. ======END OF PAGE 2======