FOR IMMEDIATE RELEASE                                    99-174

  SEC and U.S. Attorney Bring Civil and Criminal Fraud Charges
 Against James McDermott, Former Chairman and CEO of Investment
    Banking Firm Keefe, Bruyette & Woods, for Insider Trading
                                
     Washington, DC, December 21, 1999 -- The Securities and
Exchange Commission today filed civil fraud charges against James
J. McDermott, Jr., the former Chairman and Chief Executive
Officer of Keefe, Bruyette & Woods, Inc., an investment banking
firm, and two other individuals for insider trading.  The
charges, filed in U.S. District Court in Manhattan, allege that
McDermott provided material nonpublic information concerning at
least six merger transactions to Kathryn B. Gannon, who in turn
tipped a friend, Anthony P. Pomponio.  The U.S Attorney for the
Southern District of New York today also filed criminal charges
against the three individuals.

     SEC Associate Enforcement Director Thomas C. Newkirk said,
"As gatekeepers to our markets, there is simply no room for
securities industry professionals to misuse inside information.
If caught, the consequences will be severe."

     The complaint alleges that from at least June 1997 through
April 1998, McDermott, as Chairman and CEO of Keefe, Bruyette,
obtained material nonpublic information in advance of merger
transactions and provided it to Gannon, with whom he had a
relationship.  Gannon then purchased securities in relatively
unknown regional banks:  Central Fidelity Banks, Inc., First
Commerce Corp., California State Bank (West Covina), First
Commercial Corp., Advanta Corporation, and Barnett Banks, Inc.
Each of the banks whose stock Gannon traded was either involved
in merger negotiations with potential suitors or actually
completed a merger transaction contemporaneously with her
trading.  In addition, with respect to all but one of Gannon's
bank stock purchases, Keefe, Bruyette represented the target in
the merger transaction or was otherwise associated in some way
with one of the parties to the transaction.  As a result of her
illegal trading, Gannon made profits of at least $88,135.

     The complaint also alleges that Gannon tipped Pomponio, to
whom she boasted that she had clients in New York City who were
"well connected Wall Street types," including lawyers,
stockbrokers and other "high level people."  Pomponio, with
knowledge of the reliability of the material nonpublic
information concerning pending mergers obtained from Gannon,
traded in advance of five of the merger transactions, reaping
profits of at least $86,378.

     The Commission seeks to permanently prevent McDermott,
Gannon and Pomponio from violating the antifraud provisions of
the federal securities laws.  In addition, the complaint seeks
disgorgement of all ill-gotten gains, prejudgment interest, and
civil monetary penalties.

     Also today, the United States Attorney for the Southern
District of New York announced the filing of a criminal complaint
against McDermott, Gannon, and Pomponio for two felony counts
each, for violations of the federal securities laws, as well as a
felony count against Pomponio for perjury.  In addition, the U.S.
Attorney announced today that McDermott and Pomponio were
arrested, and an arrest warrant was issued for Gannon.

     The Commission thanks the United States Attorney's office
for its cooperation in this matter.

     The Commission continues its investigation in this matter.

     For further information contact:
     --Tom Newkirk at 202.942.4500.
     --Paul Berger at 202.942.4854.

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