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U.S. Securities and Exchange Commission

Litigation Release No. 14664 / September 29, 1995

SEC v. Victor Strevel, Civil Action No. 1:95-CV-2097 (N.D. Ga.).

     The Securities and Exchange Commission announced that on
August 22, 1995, it filed a complaint in the United States
District Court for the Northern District of Georgia seeking a
permanent injunction against Victor Strevel ("Strevel") and
alleging that Strevel violated the antifraud provisions of the
federal securities laws while associated with First Alliance
Securities, Inc. ("First Alliance"), a now-defunct, Atlanta-
based penny stock broker-dealer.  

     The complaint alleged that Strevel was associated with First
Alliance, without registration, as a de facto principal with the
title "trading department liaison," and that in that role Strevel
coached the First Alliance sales staff in high pressure sales
tactics, assisted in setting fraudulent, arbitrary prices for the
securities First Alliance sold, enforced the firm's policy
prohibiting net selling, and caused First Alliance brokers to
make unauthorized purchases in customer accounts.  In addition,
the complaint alleged that Strevel caused the First Alliance
sales staff to lie to customers about the liquidity, suitability,
and level of risk of stocks promoted by First Alliance, the
current available market prices for those stocks, the reasons for
increases or decreases in the prices of those stocks, the
operations, financial condition, and prospects of the purported
issuers of those stocks, the cost of executing trades through
First Alliance, and the prospects that the stocks promoted by
First Alliance would be listed on a stock exchange and would be
profitable.  The complaint further alleged that Strevel caused
the sales staff to fraudulently fail to tell First Alliance
customers that the firm was manipulating the prices of stocks it
promoted and that the firm had a policy prohibiting net-selling.

     As a result of a grand jury investigation led by a
Commission staff member detailed to the Department of Justice,
Strevel pled guilty in the United States District Court for the
Northern District of Georgia to one count of conspiracy to commit
securities fraud and twelve counts of securities fraud, based
upon his conduct while associated with First Alliance.  United
States v. Victor H. Strevel, Criminal Information No. 1:93-CR-
500 (N.D. Ga.).  On July 27, 1994 the court sentenced Strevel to
fifty-seven months imprisonment, three years supervised release
and joint and severable liability for trading losses of
$3,339,000.