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UNITED STATES SECURITIES AND EXCHANGE COMMISSION

LITIGATION RELEASE NO. 14676 / October 4, 1995      

SECURITIES AND EXCHANGE COMMISSION v. PENN CAPITAL FINANCIAL
SERVICES, INC., ET AL. (United States District Court for the
Western District of Pennsylvania, Civil Action No. 95-1571)

On October 2, 1995, the Securities and Exchange Commission
("Commission") filed an emergency action in U.S. District Court
for the Western District of Pennsylvania seeking a temporary
restraining order, preliminary and permanent injunctions, a
freeze of assets and other expedited relief against Penn Capital
Financial Services, Inc. ("Penn Capital"), Penn Capital
Management, Inc. ("PCM"), Roy Plaza, Helen A. Roy ("Helen Roy"),
Christopher E. Beimel ("Beimel"), William P. Hogan ("Hogan"),
Bruce Batley, Daniel D. Beimel, John W. Ford ("Ford"), John T.
Jarvis ("Jarvis") and Louis A. Miller. 

The Commission's complaint alleges that, from at least February
1991 through the present, Helen Roy and the other defendants have
engaged in an ongoing fraudulent scheme through which they have
raised over $3.1 million from at least 100 public investors,
ostensibly for the purchase of various securities offered through
Penn Capital, a broker-dealer registered with the Commission. 
Rather than purchasing the securities promised, the defendants
misappropriated the investor funds and used them for their
personal benefit and to pay earlier investors in the scheme.  In
furtherance of the scheme, the defendants made materially false
and misleading statements to investors concerning, among other
things, the nature of, and degree of risk inherent in, the
investments.  To implement the scheme, the defendants utilized
two entities: PCM, a holding company controlled by Helen Roy,
Ford, Jarvis and others, and Roy Plaza, a strip shopping center,
which leases office space to Penn Capital and is owned by Helen
Roy.  The Commission's complaint further alleges that, in order
to conceal evidence of the continuing fraudulent scheme from
regulatory authorities, Helen Roy, Beimel and Hogan maintained an
undisclosed set of broker-dealer books and records.  

In the action, the Commission charges the defendants with various
violations of the antifraud provisions of the Securities Act of
1933, and the antifraud, broker-dealer registration and broker-
dealer recordkeeping provisions of the Securities Exchange Act of
1934.  The complaint seeks to obtain ancillary relief from the
defendants in the form of disgorgement, prejudgment interest and
civil penalties and seeks an accounting from PCM.
The action also names Helen Roy as Administratrix of the Estate
of Philip F. Roy Jr. as a relief defendant for purposes of
seeking an asset freeze and disgorgement of certain funds
misappropriated by Philip Roy, Jr. ("Roy Jr."), Helen Roy's
deceased son.  Roy Jr., who was a participant in the scheme, died
on April 24, 1995.

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Several of the defendants have been the subjects of prior
Commission actions.  On September 28, 1993, Helen Roy, Ford and
Jarvis consented to a Commission order wherein, among other
things, they were suspended from association with any brokerage
firm for varying periods of time.  They were sanctioned for their
activities in connection with an improper financial transaction
executed by an investment adviser registered with the Commission.

On February 12, 1979, Helen Roy consented to a Commission order
wherein she was censured for violating the antifraud provisions

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of the federal securities laws in connection with the offer and
sale of securities.