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         UNITED STATES SECURITIES AND EXCHANGE COMMISSION

LITIGATION RELEASE NO. 14880 / April 16, 1996

SECURITIES AND EXCHANGE COMMISSION v. MELVIN H. COX, et al.
3:96-CV-0908-X, USDC, ND/TX (Dallas Division)

     The  Securities  and   Exchange  Commission   ("Commission")
announced that  on April 1,  1996, it  filed a  complaint in  the
United  States District  Court  in Dallas,  Texas, alleging  that
Melvin H. Cox ("Cox")  and his company Fairfield  Investment Co.,
Inc. ("Fairfield"), during the period 1993 to date,  violated the
securities registration  and antifraud provisions of  the federal
securities  laws in connection with  a $32 million "Ponzi" scheme
involving at least 1900 persons residing in 34 states and Canada.
The  complaint also named 12 corporations, four of which are said
to  be  wholly-owned  subsidiaries  of Fairfield,  as  defendants
solely for the purposes of equitable relief. 

     According to  the Commission's complaint, Cox  and Fairfield
promised  investors that their monies  would be used  to trade in
first and  second mortgages and would result in a return of 12.8%
(later 13.4%) every 45  days, a compounded return  of as much  as
160% a  year. In  fact, the  complaint alleged  investors' monies
were  loaned to the relief  defendants at interest  rates of 6-8%
per  annum. Those  loan proceeds  were "frozen"  by the  Court on
April 1, 1996, and a temporary receiver was appointed on April 4,
1996 to take  over control of Fairfield,  as well as  its wholly-
owned subsidiaries, for the benefit of investors. 

     At  an  evidentiary  hearing   April  11,  l996  before  the
Honorable Joe Kendall,  the Commission introduced  uncontroverted
evidence  that $22  million  had been  raised  by the  defendants
during  the first three months of 1996  alone, in addition to the
$32  million alleged  in the  complaint; that  approximately 3500
investors   had   purchased   the  Fairfield   securities;   that
approximately  $20 million  had been  disbursed to  the corporate
relief defendants; and that more than $10 million had been frozen
by  operation of  the  Court's April  1,  1996 order.  After  the
hearing, the  temporary  receiver for  Fairfield,  retired  Texas
State  Court  Judge  Richard  Mays,  assured  investors  that  an
informational mailing would be made in the near future. 

     Shortly prior  to  the  evidentiary  hearing  defendant  Cox
consented,  without  admitting  or   denying  the  truth  of  the
allegations  in  the  complaint, to  the  entry  of  an order  of
permanent injunction and asset freeze, leaving  only the issue of
disgorgement and  civil penalties to be resolved  as to him.  The
temporary  receiver transferred in  excess of $10  million from a
Fairfield account in Kemp, Texas, to the Registry of the Court.
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     The Commission  thanks the Texas State  Securities Board for
its assistance in this matter.