SECURITIES AND EXCHANGE COMMISSION

Litigation Release No. 16959 \ April 10, 2001

SECURITIES AND EXCHANGE COMMISSION V. MELISSA K. QUIZENBEURY, Civil Action No. 1:01-303 (S.D.W. Va.) (filed April 10, 2001)

FORMER KEYSTONE BANK OFFICER AND DIRECTOR SETTLES SEC CHARGES OF INSIDER TRADING

On April 10, 2001, the Commission filed a complaint in the United States District Court for the Southern District of West Virginia alleging that Melissa K. Quizenbeury, a former officer and director of First National Bank of Keystone ("Bank"), sold Bank stock while in possession of material nonpublic information about the adverse financial condition and improper activities conducted at the Bank. Between June 16, 1999 and July 6, 1999, Quizenbeury sold 2,000 Bank shares at $220.00 per share and avoided losses of $440,000.

The Commission's complaint specifically alleges that at the time Quizenbeury sold her stock, she knew that the Office of the Comptroller of the Currency ("OCC") had prohibited the Bank from accepting brokered deposits. Brokered deposits are deposits obtained by banks for which the banks pay a fee. Despite the OCC's restriction, Quizenbeury knew that the Bank had accepted millions of dollars in brokered deposits. Quizenbeury also falsely reported to the Executive Committee of the Bank's Board of Directors that the Bank had not accepted brokered deposits. Quizenbeury also knew that Bank executives had falsified Bank records and filed inaccurate reports with the OCC. At the time she sold her Bank stock, Quizenbeury knew that it was essentially worthless.

On September 1, 1999, the OCC declared the Bank to be insolvent, and the FDIC was appointed as receiver for the Bank. The insolvency determination followed the OCC's discovery that the assets of the Bank had been overstated by as much as $515 million. By September 2, 1999, the Bank stock was worthless.

Simultaneously with the filing of the Commission's complaint, Quizenbeury, without admitting or denying the Commission's allegations, consented to the entry of a judgment permanently enjoining her from violating 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 United States Attorney's office for the Southern District of West Virginia has filed a criminal charge against Quizenbeury arising from the same conduct charged in the SEC complaint. Quizenbeury has agreed with the U.S. Attorney's office to plead guilty to one felony count for insider trading and to pay $440,000 in restitution, plus prejudgment interest, to the registry of the court. With the payment of restitution, Quizenbeury was able to demonstrate her inability to make any further payment. As a result, the Commission did not seek to impose a monetary penalty on Quizenbeury. The Commission would like to thank the United States Attorney's office for its cooperation in this investigation. The Commission is continuing its investigation in this matter.