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         UNITED STATES SECURITIES AND EXCHANGE COMMISSION

LITIGATION RELEASE NO. 15070 / September 25, 1996

SECURITIES AND EXCHANGE COMMISSION v. SELHEIMER & CO., ET AL.
(United States District Court for the Eastern District of
Pennsylvania, Civil Action No. 96-CV-6449)

     On September 24, 1996, the Securities and Exchange
Commission ("Commission") instituted a civil action in U.S.
District Court for the Eastern District of Pennsylvania seeking a
permanent injunction, disgorgement and other relief against
Selheimer & Co. ("S&C"), a broker-dealer registered with the
Commission, and its owner, Perry A. Selheimer ("Selheimer").  The
complaint charges S&C and Selheimer with violations of Section
17(a) of the Securities Act of 1933 ("Securities Act") and
Sections 10(b), 15(c)(1), 15(c)(3) and 17(a) of the Securities
Exchange Act of 1934 ("Exchange Act") and Rules 10b-5, 15c1-2,
15c3-1, 17a-3 and 17a-4 thereunder.

     According to the complaint, from January 1989 until December
1994, Selheimer, through S&C, misappropriated approximately $1.6
million from ten S&C customers.  Selheimer persuaded the
customers to permit S&C to take custody of their securities,
ostensibly, to increase the firm's net capital to enable it to
expand its operations.  Selheimer led the customers to believe
that, while the securities would be recorded as assets of S&C,
they would continue to be held for the benefit of the customers,
and would not be liquidated without their prior consent. 
According to the complaint, Selheimer also promised to forward to
the customers the dividends and interest earned on the
securities.  As a further incentive, he promised to pay many of
the customers an additional six to ten percent interest.

     The Commission alleges that, once he obtained custody of the
securities, Selheimer sold them and used the proceeds to pay his
business and personal expenses.  Most of the money was used to
pay the dividends and interest promised to the customers. 
Selheimer also pledged some of the securities as collateral for a
bank loan, which was later placed in default status.  Moreover,
in addition to liquidating securities, on at least two occasions,
Selheimer misappropriated funds tendered to S&C for the purchase
of securities.  

     The Commission's complaint further alleges that, in
advancing the scheme, Selheimer and S&C made materially false and
misleading statements to the customers, and sent them fabricated
documents, which misrepresented the value, quantity and existence
of the securities.  Additionally, by failing to properly record
the customers' securities on its books and records, S&C failed to
comply with net capital and recordkeeping provisions of the
Exchange Act.  S&C ceased all operations in December 1994.