UNITED STATES SECURITIES AND EXCHANGE COMMISSION

     Litigation Release No. 15633 / January 30, 1998

     Accounting and Auditing Enforcement
     Release No. 1011 / January 30, 1998

     SECURITIES AND EXCHANGE COMMISSION v. JAMES PATRICK KITTLER 
     (Civ. No. 98-551DSD/JMM) January 30, 1998

     The Securities and Exchange Commission announced today that it filed, and
     simultaneously settled, a civil suit in federal court in the District of
     Minnesota against J. Patrick Kittler, trustee and chief executive officer
     of National Trade Trust, a Minneapolis, Minnesota company.  The complaint
     alleges that under Kittler's direction the company disseminated misleading
     offering materials that misrepresented the safety and liquidity of the
     company's promissory notes.  These offering materials included fraudulent
     financial statements that materially overstated the company's earnings,
     assets and net worth.  The complaint further alleges that these financial
     statements, prepared at Kittler s direction, (i) artificially inflated
     assets by $2 million, by recording an asset which held no value for the
     company; (ii) failed to record reserves for uncollectible loans; and (iii)
     recorded advances to clients at inflated values, instead of the actual
     amount advanced to each client.  Between February 1990 and March 1994, the
     company raised approximately $8 million from over 300 investors from the
     sale of its notes.  National Trade Trust has defaulted on the notes and
     currently owes approximately $6.5 million to over 200 investors.  The
     company has ceased operations and is liquidating its remaining assets.

     The complaint alleges that by preparing the fraudulent financial
     statements, Kittler violated Section 17(a) of the Securities Act of 1933,
     Section 10(b) of the Securities Exchange Act of 1934, and Rule 10b-5
     thereunder.  Kittler has consented, without admitting or denying the
     Commission s allegations, to the entry of an order of permanent injunction
     and the payment of a $25,000 civil penalty. 

     The Commission also instituted, and simultaneously settled, administrative
     proceedings against the company's independent auditor, Paul Mount.  Mount
     consented to the entry of an order barring him from appearing or practicing
     before the Commission as an accountant for four years.  Mount, through his
     accounting firm, Mount & Borresen, Ltd., of Bloomington, Minnesota, audited
     the company's financial statements for the fiscal years ended December 31,
     1990, 1991 and 1992.  These financial statements, together with audit
     reports prepared by Mount, were included in the company s offering
     statements filed with the Commission under Regulation A of the Securities
     Act of 1933.

     The administrative order, which Mount consented to without admitting or
     denying, finds that Mount engaged in improper professional conduct by
     failing to obtain sufficient competent evidential matter to support his
     opinions, by failing to exercise due professional care, and by lacking the
     proper degree of professional skepticism.  

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