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         UNITED STATES SECURITIES AND EXCHANGE COMMISSION

LITIGATION RELEASE NO. 15085 / September 27, 1996

SECURITIES & EXCHANGE COMMISSION v. CNC TRADING COMPANY, INC., et
al. (United States District Court for the District of New Jersey,
Civil Action No. 96-4620) 

     On September 24, 1996, the Securities and Exchange
Commission ("Commission") filed a Complaint in the U.S. District
Court for the District of New Jersey, against defendants CNC
Trading Company, Inc. ("CNC"), Charles N. Cugliari ("Cugliari"),
Cindy J. Myers ("Myers"), Frank R. Sommerer ("Sommerer"), and
Marvin Sherman ("Sherman"), and relief defendant Oscar R. Sierra
("Sierra").  According to the Commission's Complaint, Cugliari
perpetrated a fraudulent scheme through CNC, a purported food
brokerage formerly based in Marlton, New Jersey, which Cugliari
owned and controlled.  Beginning in 1985 and continuing until
February 1995, Cugliari directed the fraudulent sale of
approximately $70 million of CNC securities in the form of
investment contracts to over 2,000 investors.  Cugliari, Myers,
Sommerer, Sherman and others under Cugliari's direction,
solicited investors by representing that CNC would use their
funds to purchase food products such as meat or poultry, and then
resell that product to a food distributor or retailer.  They
further represented to investors that, through these purported
transactions, CNC would earn profits that would yield investors
returns of 3 1/2 percent monthly or 42 percent annually.

     The Complaint alleges that, contrary to these
representations, Cugliari and CNC did not purchase and resell
food products with investor money.  Instead, Cugliari engaged in
a Ponzi scheme whereby he used investor funds to pay the promised
returns to other investors.  Cugliari also used investor funds to
pay himself an annual salary of $500,000 and to support a lavish
lifestyle, including frequent gambling trips to Atlantic City. 
Cugliari also paid Myers, Sommerer and Sherman substantial sales
commissions using investor funds.  In 1994, Sommerer received
commissions of approximately $3.5 million, Myers received
commissions of approximately $300,000, and Sherman received
commissions of approximately $200,000.  In addition, the
Complaint alleges that Sierra, although not involved in the
fraudulent scheme, received approximately $52,000 in illegally
obtained CNC investor proceeds.

     The Complaint also alleges that, in furtherance of the
scheme, Cugliari, Myers, Sommerer and Sherman made numerous
misrepresentations and omissions of material fact to investors in
connection with the sale of CNC securities.  Among other things,
Cugliari and Myers misrepresented the profitability of CNC's food
brokering operation and CNC's financial condition.  In addition,
Cugliari, Myers, Sommerer and Sherman misrepresented to investors
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the degree of risk involved in the purchase of CNC securities,
and failed to disclose to investors that they received
substantial commissions from the sale of CNC securities.  The
Complaint further alleges that the fraudulent scheme collapsed in
February 1995 when Cugliari fled to the Cayman Islands.   

     The Complaint charges CNC, Cugliari, Myers, Sommerer, and
Sherman with violations of Sections 5(a), 5(c), and 17(a) of the
Securities Act of 1933 and Section 10(b) of the Securities
Exchange Act of 1934 and Rule 10b-5, promulgated thereunder.  The
Complaint also charges Cugliari, Myers, Sommerer, and Sherman
with violations of Section 15(a)(1) of the Securities Exchange
Act of 1934.  The Complaint seeks injunctive relief, disgorgement
together with prejudgment interest, and civil penalties, against
CNC, Cugliari, Myers, Sommerer, and Sherman, as well as an order
of disgorgement against Sierra.

     Simultaneously with the filing of the Commission's
Complaint, CNC, Cugliari, and Myers consented, without admitting
or denying the allegations of the Commission's Complaint, to the
entry of an Order of Permanent Injunction against them.  Among
other things, the Order will permanently enjoin CNC, Cugliari and
Myers from future violations of the antifraud and registration
provisions of the federal securities laws and will order Cugliari
to pay disgorgement of approximately $600,000, which is currently
held in an escrow account.