UNITED STATES SECURITIES AND EXCHANGE COMMISSION

 LITIGATION RELEASE NO. 16112 \ April 14, 1999

 SECURITIES AND EXCHANGE COMMISSION v. BENJAMIN FRANKLIN COOK, individually and dba DENNEL FINANCE LIMITED, GERALD LEE PATE, ELLSWORTH WAYNE McLAWS and ALAN CLAGG, et al., 3:99CV0571-R, USDC, ND/TX (Dallas Division)

 On April 2, 1999, Judge Jerry Buchmeyer, United States District Judge for the Northern District of Texas, rejected defendants’ opposition and granted the Commission’s request for a preliminary injunction and other relief. The pending civil action charges defendants with raising approximately $30 million in the fraudulent offer and sale of unregistered “prime bank” securities throughout the United States. The Court issued the preliminary injunction after holding an evidentiary hearing on April 1, 1999.

 At the hearing, a number of investors testified concerning the misrepresentations made to them about the use and safety of investor funds. Investors were told that their funds, secured by a bank guarantee, would be used as collateral to trade financial instruments with top 50 European banks, and that the trading activity would provide them with annual returns of 24 to 60 percent. However, evidence presented at the hearing indicated that there were no bank guarantees, no investor funds were transferred to European banks for trading purposes, and no investment interest was received from European banks. In fact, in typical “Ponzi” scheme fashion, interest income paid to existing investors was paid from funds provided by new investors.

 The Court continued its asset freeze entered on March 16 against Benjamin Franklin Cook (“Cook”), individually and d/b/a Dennel Finance Ltd. (“Dennel”), Gerald Lee Pate (“Pate”), Ellsworth Wayne McLaws, (“McLaws”) and Alan Clagg (“Clagg”) and relief defendants FPC-1 Limited Partnership, Samuel Limited Partnership, Alliance Investments Corp., Cornerstone Management LLC, International Business Consultants Limited, Highlander Limited Partnership, and C. Kelly Olsen. The Court also ordered the defendants and relief defendants to repatriate all funds obtained from the activities described in the Commission’s complaint which are located outside the jurisdiction of the court, ordered the defendants to surrender their passports, and ordered that defendants render an accounting of all investor monies.

 The order preliminarily enjoins defendants Cook, individually and d/b/a Dennel, Pate , McLaws, and Clagg from 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 (“Exchange Act”) and Rule 10b-5 thereunder, and Pate, McLaws, and Clagg from violations of Section 15(a)(1) of the Exchange Act.