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UNITED STATES SECURITIES AND EXCHANGE COMMISSION

LITIGATION RELEASE NO. 14670 / October 2, 1995

SECURITIES AND EXCHANGE COMMISSION v. TANDEM MANAGEMENT INC.,
WILLIAM F. BRANSTON, EUGENE B. DEVENEY, and PETER S. ALSOP, 95
Civ. 8411 (JGK) (S.D.N.Y.)

NEW YORK -- The Securities and Exchange Commission announced the
filing of a Complaint in the United States District Court for the
Southern District of New York alleging a million-dollar
fraudulent scheme involving bogus "soft dollar" billing
practices.  Named as defendants were:

TANDEM MANAGEMENT INC. ("Tandem"), a registered investment
adviser located in New York City; 

WILLIAM F. BRANSTON ("Branston"), of Oyster Bay, New York,
Tandem's President, Chief Investment Officer and 50% owner. 
According to the Commission's Complaint, Branston personally
received over $500,000 of Tandem's ill-gotten gains, through
compensation, ATM withdrawals from Tandem's bank account,
electronic funds transfers, and direct cash payments from soft
dollar broker-dealers;

EUGENE B. DEVENEY ("Deveney"), of Hoboken, New Jersey,
Tandem's Managing Director and 50% owner; and

PETER S. ALSOP ("Alsop"), of New York City, who was Tandem's Vice
President until mid-1993.

The Commission's Complaint, filed on October 2, 1995, alleges as
follows:

     In a scheme that began at Tandem's inception in late 1991,
the defendants misappropriated at least $1 million of advisory
client assets, which were primarily in the form of soft dollar
credits.  Tandem entered into arrangements with at least ten
broker-dealers, who agreed to provide soft dollar credits, or
rebates, of a portion of the commissions generated from
securities trades ordered by Tandem in the portfolios of Tandem's
advisory clients.  The broker-dealers agreed then to use the
credits to pay vendor invoices submitted by Tandem, or to
reimburse Tandem in cash for invoices that Tandem had purportedly
already paid directly.  Soft dollar credits are assets of the
advisory clients whose trades pay the brokerage commissions that
generate the rebates.

     The defendants fraudulently pocketed over $735,000 in soft
dollar payments from broker-dealers by:

submitting the same vendor invoice for full "reimbursement"
multiple times; 

submitting invoices for fictitious expenses and obtaining
"reimbursement," often multiple times;
 
altering invoices before submitting them -- often multiple times
-- for reimbursement, so as to make the invoices appear to be
different from invoices previously paid, or to conceal
information that would have shown that Tandem was already
receiving payment of a given invoice from another broker-dealer;
and 

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inducing one broker-dealer to pay the soft dollar credits in cash
to Tandem as undisclosed compensation, or kickbacks.

     The defendants also used soft dollar credits to pay, or
obtain reimbursement for, over $200,000 of Tandem's non-research
expenses, contrary to representations made to advisory clients
concerning Tandem's soft dollar practices.

     Tandem, Branston and Deveney also took over $47,000 from two
of their advisory clients, Parallax Group L.P. and Parallax Fund
Limited, to pay Tandem's rent, in contravention of the governing
agreements for those clients.

     Throughout its existence, Tandem would have been insolvent
but for its "income" from bogus soft dollar billings.  While
Tandem has received over $1 million in soft dollar "revenues,"
its fee income has totaled only about $320,000.  Throughout its
existence, Tandem's operating expenses have greatly exceeded its
fee income.  

     The defendants also distributed a variety of fraudulent
marketing materials to attempt to attract clients to Tandem. 
These materials included false performance results for accounts
supposedly managed by Tandem, Branston and Deveney.  In marketing
materials and SEC filings, the defendants overstated Tandem's
assets under management, claiming that Tandem managed as much as
$320 million, when in truth Tandem's assets under management
never exceeded $40 million.

     The Commission charged Tandem, Branston and Deveney with
violating Section 17(a) of the Securities Act of 1933
("Securities Act"), Section 10(b) of the Securities Exchange Act
of 1934 ("Exchange Act"), Rule 10b-5 thereunder, Sections 204,
206(1), 206(2), and 206(4) of the Investment Advisers Act of 1940
("Advisers Act"), and Rules 204-2, 206(4)-1 and 206(4)-4
thereunder.  The Complaint charges that Alsop aided and abetted
certain of the violations by Tandem of the Advisers Act and the
rules thereunder.  The Commission is seeking preliminary and
permanent injunctions against all defendants against future
violations, as well as disgorgement and civil money penalties.

     Simultaneous with the filing of the Complaint, and without
admitting or denying the allegations therein, (1) Tandem and
Branston consented to the entry of a preliminary injunction
against future violations of the above statutory provisions and
rules; (2) Deveney consented to the entry of a preliminary
injunction against future violations of the Advisers Act
provisions and rules specified above; and (3) Alsop consented to
the entry of a permanent injunction against future violations of
the Advisers Act provisions and rules specified above. 
Litigation will continue with regard to charges against Deveney
under the Securities Act and the Exchange Act; permanent
injunctive relief against Tandem, Branston and Deveney; and
disgorgement and civil money penalties.

     The Commission's investigation continues as to the conduct
of other entities and individuals involved in this matter.