UNITED STATES SECURITIES AND EXCHANGE COMMISSION


Securities Exchange Act of 1934
Release No. 36909 / February 29, 1996

Investment Advisers Act of 1940 
Release No. 1555 / February 29, 1996

Admin. Proceeding 
File No. 3-8966       

In the Matter of Quest Capital Strategies, Inc.
and David Chen Yu                              

     The Securities and Exchange Commission announced that public
administrative proceedings have been instituted pursuant to the
Securities Exchange Act of 1934 ("Exchange Act") against Quest
Capital Strategies, Inc. ("Quest"), a registered broker-dealer
located in Laguna Hills, California, and pursuant to the Exchange
Act and the Investment Advisers Act of 1940 ("Advisers Act")
against David Chen Yu ("Yu"), Quest's president.  The Order
alleges as follows:

     Quest and Yu failed reasonably to supervise a former Quest
registered representative, John T. Nakoski ("Nakoski"), with a
view to preventing Nakoski's violations of the federal securities
laws.

     From December 1991 to August 1993, Nakoski, while a Quest
registered representative and the branch manager of Quest's
Kingston, New York branch office, defrauded approximately thirty-
five investors of approximately $450,000 by means of a "Fixed
Income Loan Agreement" (the "Note"), pursuant to which he
guaranteed principal and interest on investments in or through
his investment business.  Among other things, Nakoski
misrepresented the safety of the Notes and the use of investors'
monies.  In fact, Nakoski used investors' money to invest in
futures and futures options and for personal and business
expenses.  Nakoski incurred substantial losses on his futures
trading, losses which he failed to disclose and which ultimately
resulted in his inability to pay investors their guaranteed
principal and interest.  Nakoski violated Section 17(a) of the
Securities Act of 1933, Section 10(b) of the Exchange Act, and
Rule 10b-5 thereunder, and Sections 203(a) and 206 (1), (2), and
(4) of the Advisers Act, and Rules 206(4)-2 and 206(4)-4
thereunder.  

     A hearing will be scheduled to determine whether the
allegations against Quest and Yu are true, and, if so, what
remedial action, if any, is appropriate.