John Gardner Black, Devon Capital Management, Inc., and Financial Management Sciences, Inc.

U.S. SECURITIES AND EXCHANGE COMMISSION
Washington, DC

LITIGATION RELEASE NO. 15725 / April 29, 1998

SECURITIES AND EXCHANGE COMMISSION v. JOHN GARDNER BLACK, DEVON CAPITAL MANAGEMENT, INC., AND FINANCIAL MANAGEMENT SCIENCES, INC., Civil Action No. 97-2257 (W.D.Pa.).

The Securities and Exchange Commission announced that, on April 29, 1998, the Honorable Donetta W. Ambrose of the United States District Court for the Western District of Pennsylvania entered an Order of Disgorgement and Civil Penalties ("Order") against defendant John Gardner Black ("Black"). The Order requires Black to disgorge $3,632,031, together with prejudgment interest in the amount of $326,883, and to pay a civil penalty in the amount of $500,000. Black consented to the entry of the Order without admitting or denying the allegations of the Commission's Complaint.

The Commission's Complaint alleged that Black, acting through defendants Devon Capital Management, Inc. ("Devon"), a registered investment adviser, and Financial Management Sciences, Inc. ("FMS"), a corporate affiliate of Devon's, both owned by Black, made misrepresentations and omissions of material fact in connection with the solicitation and management of Devon's investment advisory clients' funds, resulting in the loss of millions of dollars of municipal bond proceeds invested by school districts and other local government units throughout Western and Central Pennsylvania. The Complaint alleged that Black, Devon and FMS benefited financially from their actions.

The Commission filed this action as an emergency matter on September 26, 1997. On the same date, the Court granted the Commission's requested relief, including a temporary restraining order, freeze of assets and an order appointing the Honorable Richard L. Thornburgh, former Attorney General of the United States and Governor of Pennsylvania, as Trustee.

On December 12, 1997, Black, Devon and FMS, pursuant to their consent, were permanently enjoined from future violations of the antifraud provisions of the Securities Act of 1933, Securities Exchange Act of 1934, and the Investment Advisers Act of 1940, as charged in the Complaint.