SECURITIES AND EXCHANGE COMMISSION
                         Washington, D.C.

LITIGATION RELEASE NO. 15189 / December 18, 1996

ACCOUNTING AND AUDITING ENFORCEMENT
Release No. 866 / December 18, 1996

SECURITIES AND EXCHANGE COMMISSION v. MORRIS DABAH, ROBERT REISS,
STANLEY A. GREENSTEIN, AND DAVID KEERY, 96 Civ. 9498 (RWS)
(S.D.N.Y.)  

     The Securities and Exchange Commission ("Commission")
announced today that it filed a settled complaint in the United
States District Court for the Southern District of New York
alleging insider trading by Morris Dabah ("Dabah") founder and
formerly CEO of The Gitano Group, Inc. ("Gitano"), Robert Reiss
("Reiss"), formerly Gitano's executive vice president and Stanley
A. Greenstein ("Greenstein"), formerly Gitano's CFO; and
financial fraud by Greenstein and David Keery ("Keery") the
senior financial officer reporting to him.  As part of the
settlement the defendants have agreed to pay disgorgement,
prejudgment interest and penalties totalling $1,060,190.80.

     The Commission's Complaint alleges that in early 1992, Dabah
and Reiss traded Gitano stock through accounts at foreign banks
while they were in possession of material nonpublic information
concerning Gitano's earnings.  In particular, the Complaint
alleges that by at least February 16, 1992, Dabah learned that
Gitano's 1991 losses could be materially greater than analysts'
predictions.  The Complaint alleges that between February 20 and
March 12, 1992, Dabah caused the sale of 20,500 shares of Gitano
common stock through an account he owned at a Luxembourg bank and
other accounts at that bank in the names of other individuals. 
On March 16 Gitano announced it had lost $71 million in 1991. 
The Complaint alleges that Reiss purchased 10,000 shares of
Gitano common stock through an account he owned at a Swiss Bank
on May 4, 1992, the day before Gitano announced favorable first
quarter earnings of $6 million.  The Complaint further alleges
that Dabah, Reiss and Greenstein all sold Gitano stock before
Gitano disclosed on June 16, 1992 that a lender to its Hong Kong
subsidiary requested security equal to other lenders as a
condition to the continuation of its credit facility.  According
to the Complaint, Dabah, Reiss and Greenstein knew the lender had
threatened to terminate the line of credit when they sold.  The
Complaint alleges that in addition to trading though foreign
banks, Dabah and Reiss concealed their trades by failing to file
required Forms 4 with the Commission.

     According to the Complaint, in a separate incident Keery, at
Greenstein's direction, failed to establish a reserve on a timely
basis for losses he knew Gitano had incurred on a transaction
with Skiva International.  As a result Gitano improperly deferred
recognition of $3.3 million in losses.  The Complaint further
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alleges that Greenstein directed Keery to falsify Gitano's
accounts receivable aging reports to conceal the uncollected
Skiva receivable from Gitano's auditors.  The Complaint alleges
that, as a result of Greenstein's and Keery's falsification of
Gitano's records, the company's financial statements filed with
the Commission for the second and third quarters of 1991, and for
the first quarter of 1992 were materially false, and Gitano's
Form 10-K for the year 1991 was also false.   
  
     The Complaint alleges that Dabah's, Reiss's, and
Greenstein's trading violated Section 17(a) of the Securities Act
of 1933 ("Securities Act"), Sections 10(b) of the Securities
Exchange Act of 1934 ("Exchange Act") and Rule 10b-5 thereunder. 
The Complaint also alleges that Dabah and Reiss violated Section
16(a) of the Exchange Act and Rule 16a-3 thereunder by failing to
file with the Commission Forms 4 disclosing their Gitano
transactions.  The Complaint further alleges that Greenstein's
and Keery's falsification of Gitano's books and records and
periodic reports violated Sections 10(b) and 13(b)(5) of the
Exchange Act and Rules 10b-5, 13b2-1 and 13b2-2 thereunder.  In
its Complaint, the Commission seeks a permanent injunction
against future violations of these provisions, disgorgement with
prejudgment interest and civil penalties. 

     Simultaneously with the filing of the Complaint, the four
defendants, without admitting or denying the allegations of the
Complaint, consented to the entry of Final Judgments that enjoin
them from future violations of the provisions the Complaint
alleges they violated; require Dabah and Greenstein to disgorge
losses illegally avoided as a result of sales of Gitano stock
which, together with prejudgment interest, total $266,236.90 and
$236,982.44, respectively; require Reiss to disgorge both his
illegal profits and losses illegally avoided which, together with
prejudgment interest, total $97,831.47; and order Dabah, Reiss,
Greenstein, and Keery to pay civil penalties of $186,877.50,
$79,825, $167,437.50, and $25,000, respectively. 
  
     The Commission received substantial assistance in its
investigation from foreign authorities.