SECURITIES AND EXCHANGE COMMISSION
                                   Washington, D.C.


     LITIGATION RELEASE NO.    15767 /  June 4, 1998

     ACCOUNTING AND AUDITING ENFORCEMENT
     RELEASE NO.   1040 / June 4, 1998 


     SECURITIES AND EXCHANGE COMMISSION v. EUGENE McCLOSKEY AND CHARLES MEIZOSO, 
     No. 98 Civ. 3943 ( MBM )  (S.D.N.Y.  filed  June 4, 1998)

          The Securities and Exchange Commission ("Commission") today filed a
     complaint in the United States District Court for the Southern District of
     New York against Eugene McCloskey ("McCloskey") and Charles Meizoso
     ("Meizoso"), former senior managers of Gruntal & Co., Incorporated
     ("Gruntal"), a registered broker-dealer.  The Commission alleges that -- in
     connection with two fraudulent schemes to divert securities and funds
     totaling approximately $11 million from customer accounts, unclaimed
     dividends, stale and outstanding customer and vendor checks, and other
     sources at Gruntal -- McCloskey and Meizoso violated antifraud and
     corporate recordkeeping provisions of the federal securities laws, and
     aided and abetted violations of the broker-dealer recordkeeping provisions
     of the federal securities laws.  Without admitting or denying any of the
     allegations in the complaint, except as to jurisdiction, McCloskey and
     Meizoso each consented to the entry of a final judgment, which the judge
     today signed, (1) permanently enjoining him from (a) violating Section
     17(a) of the Securities Act of 1933, Sections 10(b) and 13(b)(5) of the
     Securities Exchange Act of 1934 ("Exchange Act"), and Exchange Act Rules
     10b-5 and 13b2-1, and (b) aiding and abetting violations of Section 17(a)
     of the Exchange Act and Exchange Act Rules 17a-3 and 17a-4; (2) ordering
     him to disgorge his ill-gotten gains and losses avoided, plus prejudgment
     interest thereon, but waiving such disgorgement, and not imposing a civil
     penalty, based on demonstrated inability to pay; and (3) in the case of
     Meizoso, barring him from acting as an officer or director of any public
     corporation.

          The Commission's complaint alleges that, in the first fraudulent
     scheme, beginning in 1984 and continuing until late 1994, McCloskey,
     Meizoso, and certain other members of Gruntal senior management opened
     securities accounts at Gruntal under fictitious customer names,
     intentionally diverted approximately $5 million of customer and other
     third-party assets to those accounts, and then transferred the assets to
     Gruntal's profit and loss accounts or used them to make off-books payments
     of Gruntal expenses.  In the second scheme, beginning in 1987 and
     continuing until late 1994, McCloskey, Meizoso, and one other Gruntal
     senior manager (now deceased) embezzled approximately $6 million in
     diverted assets.  McCloskey and Meizoso also falsified Gruntal books and
     records in order to conceal the diversions.  The Commission further alleges
     that McCloskey and Meizoso sold common stock of Gruntal Financial Corp.,
     the parent corporation of Gruntal, while in possession of material

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     nonpublic information about the first fraudulent scheme.

          As part of the settlements, McCloskey and Meizoso each agreed to
     settle a proposed administrative proceeding pursuant to Section 15(b)(6) of
     the Exchange Act, to be based on the entry of the injunction, that will bar
     him from the securities industry.  The Commission today issued  separate
     orders as to  McCloskey and Meizoso instituting the proposed administrative
     proceedings, accepting the offers of settlement, and barring McCloskey and
     Meizoso from association with any broker, dealer, investment adviser,
     investment company, or municipal securities dealer. See 34-40067; 3-9619
     and 34-40068; 3-9620.

     See Litigation Release No. 14865 (Apr. 9, 1996). 








































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