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U.S. Securities and Exchange Commission

Litigation Release No. 14665 / September 29, 1995

SEC v. Daniel C. Baxley, Civil Action No. 1:95-CV-1761-JEC (N.D.
Ga.).

     The Securities and Exchange Commission announced that on
July 10, 1995, it filed a complaint in the United States District
Court for the Northern District of Georgia seeking a permanent
injunction against Daniel Baxley and alleging that Baxley
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 Baxley was a member of the First
Alliance sales force, which sold worthless penny stocks to
unsophisticated investors through high pressure telephone sales
tactics.  Specifically, the complaint alleged that Baxley lied to
First Alliance 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 Baxley
fraudulently failed 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.  The complaint
also alleged that Baxley made unauthorized trades in customer
accounts.

     Without admitting or denying the Commission's allegations,
Baxley consented to the entry of a permanent injunction against
future violations of the antifraud provisions, and on July 24,
1995 the court issued that injunction.

     As a result of a grand jury investigation led by a
Commission staff member detailed to the Department of Justice,
Baxley pled guilty on October 11, 1994 in the United States
District Court for the Northern District of Georgia to one count
of conspiracy to commit securities fraud, eight counts of
securities fraud, and two counts of interstate transportation of
monies taken by fraud, based upon the same conduct alleged by the
Commission in its complaint.