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         UNITED STATES SECURITIES AND EXCHANGE COMMISSION

Litigation Release No. 14915 / May 21, 1996

SEC v. Mary S. Pate, U.S.D.C. N.D. Ill., No. 96 C 2900, filed May
15, 1996.    

     The Commission announced that on May 15, 1996, it filed a
Complaint in the United States District Court for the Northern
District of Illinois charging Mary S. Pate (Pate) with violations
of Sections 5(a), 5(c) and 17(a) of the Securities Act of 1933
(Securities Act) and Section 10(b) of the Securities Exchange Act
of 1934 (Exchange Act) and Rule 10b-5 thereunder in connection
with a $15 million Ponzi scheme designed and operated by Pate.   

     Specifically, the Commission's Complaint alleges that from
the spring of 1988 until August 1993, Pate, through her interior
design business, raised approximately $15 million from over 200
investors in the offer and sale of securities in the form of
investment contracts in a fictitious investment which she called
the "Mart Bonus Program."  The Complaint alleges that Pate told
investors that based on the volume of sales her business
generated through the Chicago Merchandise Mart, she was eligible
to participate in an investment bonus program offered by the
Merchandise Mart which would generate returns ranging from 10%-
500%.  The Complaint further alleges that Pate frequently told
investors that they were guaranteed not to loose any principal
when investing in the program.  In reality, the Mart Bonus
Program was nothing more than an elaborate Ponzi scheme designed
by Pate to defraud investors and enable her to misappropriate
funds for her personal and business use.  As a result, the
Complaint alleges that Pate misrepresented and omitted to state
material facts to investors concerning, among other things, the
nature and existence of the investment, the use of investor
proceeds and the safety and profitability of the investment.  The
Complaint seeks the entry of an order of permanent injunction
against Pate.

     Simultaneous with the filing of the Complaint, Pate
consented, without admitting or denying the allegations in the
Complaint, to the entry of an Order of Permanent Injunction
against her.  Accordingly, on May 16, 1996, the Honorable Charles
P. Kocoras of the United States District Court for the Northern
District of Illinois entered the Order of Permanent Injunction
against Pate.