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         UNITED STATES SECURITIES AND EXCHANGE COMMISSION

Litigation Release No. 15201 / December 30, 1996

SEC v. THETA GROUP, LLC, SHADOWSTONE PARTNERS I, LLC,
SCOTT S. BELL AND R. SCOT RUBEL  (USDC N.D. Ill., No. 96 C 7987,
filed December 5, 1996)  

    The Securities and Exchange Commission announced that on
December 6, 1996, the United States District Court for the
Northern District of Illinois issued a Temporary Restraining
Order (Order) against Theta Group L.L.C. (Theta), a broker-dealer
and member of the Chicago Board Options Exchange, located in
Chicago, Illinois, Shadowstone Partners I, L.L.C. (Shadowstone),
a registered broker-dealer located in Lawrenceville, New Jersey,
Scott S. Bell (Bell), an adviser/consultant to Theta and
President of Shadowstone, and R. Scot Rubel (Rubel), the sole
manager and trader of Theta. Specifically, the Order restrains
and enjoins Theta, Shadowstone, Bell and Rubel from further
violations of Section 17(a) of the Securities Act of 1933 and
Section 10(b) of the Securities Exchange Act of 1934 and Rule
10b-5 thereunder.  The Order also freezes the assets of Theta,
Shadowstone and Bell and orders certain other equitable relief,
including an accounting of all funds received from investors and
a production of all relevant books and records within five days
of the date of the Order.

     The Commission's Complaint alleges that, between October
1995 and November 1996, Theta, Bell and Rubel made fraudulent
misrepresentations and omissions of material fact in the offer
and sale of $13.4 million in securities in the form of membership
interests in Theta to at least 32 investors in 17 states.  The
Complaint further alleges that Theta, Bell and Rubel failed to
inform investors that Bell would be receiving $1.9 million in
investor monies, purportedly as an adviser/consultant to Theta. 
The Complaint also alleges that Theta represented to investors
that it had earned high returns in 1993 and 1994 even though
Theta did not exist before 1995, and claimed that Theta was
earning profits when it was actually losing money.  In addition,
the Complaint alleges that Shadowstone and Bell fraudulently
misrepresented to one investor that Shadowstone traded options on
the Philadelphia Stock Exchange and that Bell had invested
$200,000 of his own money in Shadowstone. A hearing on the
Commission's request for a preliminary injunction hearing has
been set for December 16, 1996.