UNITED STATES SECURITIES AND EXCHANGE COMMISSION


     Litigation Release No.  15782  / June 15, 1998

     SECURITIES AND EXCHANGE COMMISSION v. ROBERT L. GRAY, 97 Civ. 5732 (LAK)
     (S.D.N.Y.)

          The Commission announced that on June 8, 1998, the United States
     District Court for the Southern District of New York entered a default
     judgment against Robert L. Gray ( Gray ), an unregistered investment
     adviser and a convicted felon whom the Commission charged with defrauding
     his advisory clients and a registered broker-dealer.  The court permanently
     enjoined Gray from violating the antifraud provisions of the Securities
     Exchange Act of 1934 and various registration, books and records, and other
     provisions of the Investment Advisers Act of 1940.  The court also ordered
     Gray to disgorge $121,654, representing his ill-gotten gains, plus $48,071
     in prejudgment interest.

          The Complaint, filed on August 1, 1997, alleges that, from January
     1993 through June 1996, Gray misappropriated a total of $121,654 from
     advisory clients who had given Gray money to purchase securities on their
     behalf.  The Complaint also alleges that Gray engaged in  free-riding  at
     the expense of a registered broker-dealer, Robb, Peck, McCooey Clearing
     Corporation, by failing to pay for over $1 million in securities that Gray
     bought through that brokerage firm ostensibly for his clients.  The
     Complaint further alleges that Gray violated provisions of the Investment
     Advisers Act of 1940 by (a) failing to maintain required investment
     advisory records; (b) failing to furnish clients with required written
     disclosure statements; (c) entering into advisory contracts that unlawfully
     provided for performance-based compensation and did not prohibit assignment
     of the contracts without client consent; (d) violating rules governing
     treatment of client funds in an adviser's custody; and (e) concealing his
     disciplinary and criminal history from his clients.

          According to the Complaint, by engaging in the foregoing conduct, Gray
     violated Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-
     5 thereunder, and Sections 203(a), 204, 205(a)(1) and (2), and 206(1), (2)
     and (4) of the Investment Advisers Act of 1940, and Rules 204-2, 204-3,
     206(4)-2 and 206(4)-4 thereunder.

          Gray was barred from the securities industry by the National
     Association of Securities Dealers, Inc. in 1977 and was convicted in 1989
     and 1993 of crimes related to prior acts of misappropriating funds.









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