SECURITIES AND EXCHANGE COMMISSION
                                   Washington, D.C.


     SECURITIES EXCHANGE ACT OF 1934
     Rel. No.  40010 / May 20, 1998

     INVESTMENT ADVISERS ACT OF 1940
     Rel. No.   1722 / May 20, 1998

     Admin. Proc. File No. 3-8394

                                        
                                        :
              In the Matter of          :
                                        :
               VICTOR TEICHER           :
          VICTOR TEICHER & CO., L.P.    :
              New York, New York        :
                                        :
               ROSS S. FRANKEL          :
             5 Seymour Place East       :
               Armonk, New York         :
                                        :
                                        

     OPINION OF THE COMMISSION

          BROKER-DEALER AND INVESTMENT ADVISER PROCEEDINGS

               Jurisdiction

               The Commission is authorized under Section 203(f) of the
               Investment Advisers Act to bring proceedings against and sanction
               persons associated with unregistered investment advisers.

               Grounds for Remedial Action

                    Criminal Convictions
                    Injunction

               The partner of an unregistered investment adviser and the vice
               president of a registered broker-dealer were convicted, among
               other things, of securities fraud. The vice president was also
               enjoined and convicted of perjury and obstruction of justice in
               connection with a Commission investigation. Held, it is in the
               public interest to bar partner from association with any
               unregistered investment adviser, and to impose a collateral bar
               on vice president barring him from association with any
               investment adviser, registered or unregistered.







     APPEARANCES:

          Robert G. Morvillo, Catherine M. Foti, and John T. Hecht, of Morvillo,
     Abramowitz, Grand, Jason & Silberberg, P.C., for Victor Teicher and Victor
     Teicher & Co., L.P.

          Roger J. Bernstein, for Ross S. Frankel.

          Richard H. Walker, Carmen J. Lawrence, Edwin H. Nordlinger, Robert B.
     Blackburn, and Dorothy Heyl, for the Commission's Division of Enforcement.

     Appeal filed:  March 13, 1995
     Briefing completed:  February 12, 1998
     Oral argument:  March 16, 1998

                                          I.

          Victor Teicher & Co., L.P. ("Teicher Co."), an unregistered investment
     adviserexempt from registration under the Investment Advisers Act ("Act"), <(1)>
     and Victor Teicher, its sole general partner and 75% owner, appeal from the
     decision of an administrative law judge.  Our Division of Enforcement also
     appeals from that decision with respect to Ross S. Frankel, who was a vice
     president of Drexel Burnham Lambert, Inc., formerly a registered broker-
     dealer.

          Based on the criminal convictions of Teicher Co. and Teicher ("the
     Teicher respondents") and their stipulation, <(2)> the law judge
     barred them from association with any broker, dealer, investment company,
     investment adviser (both registered and unregistered), and municipal
     securities dealer.  On review, the Teicher respondents object only to that
     portion of the law judge's order that bars them from association with an
     unregistered investment adviser.  They contend that we lack authority under
     the Act to bring administrative proceedings against and sanction
     unregistered advisers and their associated persons.
          On the basis of Frankel's criminal convictions, an injunction against
     him, and his consent, <(3)> the law judge barred Frankel from
     association with any broker, dealer, investment company, municipal
     securities dealer, member of a national securities exchange or member of a
                              

          1/   See Section 203(b) of the Act.  Although the parties agree
               on Teicher Co.'s exempt status, the record does not disclose
               the precise basis for its exemption.

          2/   The Teicher respondents agreed to be barred from association
               with any broker, dealer, investment company, registered
               investment adviser, or municipal securities dealer.

          3/   In his answer to the order for proceedings herein, Frankel
               expressed his willingness to be barred from association with
               any broker, dealer, investment company, or municipal
               securities dealer.

                              ======END OF PAGE 2======







     registered securities association.  However, the law judge denied the
     Division's request to bar Frankel from association with any investment
     adviser.  Proceedings against Frankel having been instituted solely under
     the Securities Exchange Act ("Exchange Act"), the law judge concluded that
     he had no authority to impose an advisory bar on Frankel.  Frankel did not
     appeal from the law judge's decision.  However, the Division has appealed
     from the law judge's refusal to issue a collateral advisory bar against
     Frankel.
                                         II.

          From December 1985 to March 1986, Michael David, an associate in the
     corporate department of Paul, Weiss, Rifkind, Wharton & Garrison, a New
     York law firm, provided Teicher and Robert Salsbury, a Drexel research
     analyst, with confidential information concerning possible acquisitions by
     Paul Weiss clients.  In addition, Salsbury provided Teicher with the names
     of companies on Drexel's "phantom list," a highly confidential list of
     companies that were the subject of mergers or takeovers by Drexel clients. 
     Frankel was Salsbury's supervisor at Drexel.  Salsbury passed on to Frankel
     confidential information that Salsbury received from David.

          On April 6, 1990, a jury convicted the Teicher respondents and Frankel
     of securities fraud for trading on the basis of material, non-public
     information that they knew had been misappropriated.  The three respondents
     were also convicted of conspiracy, the Teicher respondents of fraud in
     connection with a tender offer, and Teicher and Frankel of mail fraud.  In
     addition, as a result of giving false testimony in our investigation and
     destroying pertinent documents, Frankel was convicted of perjury and
     obstruction of justice. <(4)>  On May 18, 1994, in an action brought
     by this Commission, Frankel was permanently enjoined, with his consent,
     from further violations of Section 10(b) of the Exchange Act and Rule 10b-5

     thereunder. <(5)>

                                         III.

     A.   Teicher respondents

                              

          4/   Teicher Co. was fined $600,000; Teicher was sentenced to 18
               months' imprisonment, placed on probation for five years,
               and fined $200,000; and Frankel was sentenced to 18 months'
               imprisonment and fined $10,000.  United States v. Victor
               Teicher & Company, L.P., et al., 88 Cr. 796 (CSH)
               (S.D.N.Y.).  The convictions were affirmed on appeal. 
               United States v. Teicher, 987 F.2d 112 (2d Cir.), cert.
               denied, 114 S. Ct. 467 (1993).

          5/   Frankel was ordered to disgorge his insider trading profits,
               and to pay prejudgment interest on that amount and a civil
               penalty under the Insider Trading Sanctions Act.  SEC v.
               Teicher, et al., 91 Civ. 1634 (MP) (S.D.N.Y.).

                              ======END OF PAGE 3======







          We turn first to the proceedings against Teicher.  Section 203(f) of
     the Act provides in relevant part as follows:

          The Commission, by order, shall censure or place limitations on the
          activities of any person associated, ... or, at the time of the
          alleged misconduct, associated ... with an investment adviser, or
          suspend for a period not exceeding twelve months or bar any such
          person from being associated with an investment adviser, if the
          Commission [makes the necessary findings after notice and opportunity
          for hearing.]

          Section 202(a)(11) of the Act defines "investment adviser" as "any
     person who, for compensation, engages in the business of advising others
     ... as to the value of securities or as to the advisability of investing
     in, purchasing, or selling securities."  Section 202(a)(17) defines "person
     associated with an investment adviser" to include "any partner ... of such
     investment adviser."  It is undisputed that Teicher Co. falls within the
     Act's definition of investment adviser, and that Teicher was and is a
     person associated with that firm.

          Despite the clarity of the statutory language and the total absence of
     any ambiguity, respondents insist that Section 203(f) authorizes this
     Commission to take action only against persons associated with registered
     investment advisers.  We see no basis for that interpretation.  Nor is it
     consistent with proper canons of statutory construction.  As the Supreme
     Court has made clear:

          [I]n interpreting a statute, a court should always turn first to one,
          cardinal canon before all others.  We have stated time and again that
          courts must presume that a legislature says in a statute what it means
          and means in a statute what it says there ....  When the words of a
          statute are unambiguous, then this first canon is also the last: 
          judicial inquiry is complete. <(6)>

          There is no basis for expanding Teicher Co.'s exemption from
     registration requirements into an exemption of its associated persons from
     Section 203(f).  When Congress chose to exclude exempt advisers from the
     reach of some of the Act's provisions, it enacted specific language to that
     effect, as in Section 204 (dealing with required records and reports) and
     Section 205 (regulating the content of advisory contracts).  No such
     language was inserted into Section 203(f). <(7)>  Respondents also
                              

          6/   Connecticut National Bank v. Germain, 503 U.S. 249, 253-254
               (1992).

          7/   As the Supreme Court has stated, "Where Congress includes
               particular language in one section of a statute but omits it
               in another section of the same Act, it is generally presumed
               that Congress acts intentionally and purposely in the
               disparate inclusion or exclusion."  Russello v. U.S., 464
               U.S. 16, 23 (1983).

                              ======END OF PAGE 4======







     point to the fact that Section 203 of the Act is entitled "Registration of
     Investment Advisers."  However, "the title of a statute and the heading of
     a section cannot limit the plain meaning of the 
     text." <(8)>

          We have dealt with the jurisdictional issue raised by the Teicher
     respondents before.  In prior proceedings under Section 203(f) against
     persons associated with unregistered advisers, we came to the same
     conclusion that we reach here; namely, that we have the authority to
     discipline such persons. <(9)>  We have also determined that we have
     authority under the analogous provision of the Exchange Act, Section
     15(b)(6), to discipline persons associated with unregistered broker-
     dealers. <(10)>  We see no 
     reason to depart from our prior determinations.

          Respondents argue that the legislative history of Section 203(f) shows
     that Congress intended to limit that provision to persons associated with
     registered advisers.  However, the Supreme Court has stated that where, as
     here, the statutory language is clear and unambiguous, even "contrary
     indications in the statute's legislative history" will not be allowed to
     alter the plain meaning of the text. <(11)>  Indeed, "only the most
     extraordinary showing of contrary intentions [by Congress] [can] justify a
     limitation on the plain meaning of the statutory language." <(12)> 
     We find no such showing here.  While the House and Senate Reports on
     Section 203(f) speak in one place of strengthening disciplinary controls
     over registered investment advisers, <(13)> they state in another
     that this Commission is being given authority to bar or suspend individuals
     "from associating with an investment adviser," without any indication that
     our authority is limited to registered advisers. <(14)>  We further

                              

          8/   Brotherhood of Railroad Trainmen v. Baltimore and Ohio
               Railroad Co., 331 U.S. 519, 528-529 (1947).

          <(9)>     See Dan King Brainard, 47 S.E.C. 991, 1000 n. 28
                    (1983); Alexander V. Stein, Investment Advisers Act
                    Release No. 1497 (June 8, 1995), 59 SEC Docket 1493,
                    1497.

          10/  John Kilpatrick, 48 S.E.C. 481, 487 (1986).

          11/  Ratzlaf v. U.S., 510 U.S. 135, 147-148 (1994).  See also
               Barnhill v. Johnson, 503 U.S. 393, 401 (1982).

          12/  Garcia v. U.S., 469 U.S. 70, 75 (1984).

          13/  H.R. Rep. No. 1382, 91st Cong., 2d Sess. 13 (1970); S. Rep.
               No. 184, 91st Cong., 1st Sess. 44 (1969).

          14/  H.R. Rep. No. 1382, supra, at 41; S. Rep. No. 184, supra, at
               46-47.

                              ======END OF PAGE 5======







     note that "[i]t is not the law that a statute can have no effects which are
     not explicitly mentioned in its legislative history." <(15)>

          It is well established that an investment adviser is a fiduciary whose
     actions must be governed by the highest standards of conduct. <(16)> 
     In light of the extremely serious misconduct in which Teicher engaged, we
     consider that the public interest requires that he be barred from
     association with any unregistered investment adviser.  Since we have
     determined to bar Teicher, and it appears that Teicher Co. is merely
     Teicher's alter ego, we need not address the issues raised with respect to
     Teicher Co. under Section 203(e) of the Act.

          B.   Frankel

          As noted above, the proceedings against Frankel were instituted solely
     under Section 15(b) of the Exchange Act.  Frankel, who was associated only
     with a broker-dealer, argues that we do not have authority under that Act
     to impose a collateral sanction barring him from association with an
     investment adviser, registered or unregistered.

          We recently dealt with the issue of whether we have authority to
     impose a collateral bar under Section 15(b).  After careful and extensive
     consideration, we determined that we do possess that authority.
     <(17)>  Moreover, we determined that, if a collateral advisory bar is
     imposed, it will effectively prevent both registered and unregistered
     advisory activities. <(18)>  We see no reason to revisit these
     conclusions, and we reaffirm them. 
          Frankel argues that the imposition of a collateral bar would deny him
     due process since the order for proceedings herein did not give him notice
     that such a bar was at issue.  However, even if an administrative pleading
     is defective, the defect can be remedied if the record demonstrates that
     the respondent was given notice of the matter in question and afforded a
     sufficient opportunity to respond. <(19)>  Here, at the very outset
     of hearings in this matter, Division counsel stated that our staff was
                              

          15/  Pittston Coal Group v. Sebben, 488 U.S. 105, 115 (1988).


          16/  See, e.g., SEC v. Capital Gains Research Bureau, Inc., 375
               U.S. 180, 191-192 (1963); Rosenfeld v. Black, 445 F.2d 1337,
               1342-1344 (2d Cir. 1971).

          17/  Meyer Blinder, Securities Exchange Act Release No. 39180
               (October 1, 1997), 65 SEC Docket 1970, 1974-1981.
               Commissioner Hunt dissented from the conclusion that this
               Commission has the authority to impose collateral sanctions.

          18/  Id., 65 SEC Docket at 1978-1979.

          19/  See Aloha Airlines, Inc. v. CAB, 598 F.2d 250, 261-262 (D.C.
               Cir. 1979), and the authorities therein cited.

                              ======END OF PAGE 6======







     seeking an "industry-wide" bar against Frankel.  And Frankel's counsel
     responded with the same arguments regarding our asserted lack of authority
     that he is now making to us.  Thus, Frankel was clearly given sufficient
     notice of the collateral bar issue.

          Frankel further contends that, even assuming we have the authority to
     impose a collateral advisory bar, we should not impose one on him.  He
     asserts, among other things, that his participation in the Teicher
     conspiracy was limited to a single security, that he has already been
     sufficiently punished for his misconduct, that no showing has been made
     that he engaged in any wrongdoing with respect to a customer or breached a
     fiduciary duty, and that he has had an unblemished record since 1986.

          We have stated that, in determining whether to impose a collateral
     bar, we must consider "whether the misconduct is of the type that, by its
     nature, `flows across' various securities professions and poses a risk of
     harm to the investing public in any such profession."  We further stated
     that we must also consider whether the egregiousness of the misconduct
     shows the need for such a bar in order to protect the public. <(20)>

          We conclude that Frankel's misconduct warrants the imposition of a
     collateral bar.  The law judge summed up the pertinent circumstances as
     follows:

          The conduct of ... Frankel was particularly egregious ....  He not
          only facilitated the theft of confidential material from a law firm
          but, when discovered, ... destroyed evidence, lied under oath, and
          otherwise obstructed justice in an attempt to escape liability....
          [Frankel] acted with the highest degree of scienter ....  [D]uring the
          hearing, he offered no firm assurances that he would not commit future
          violations, although he was given a number of opportunities to offer
          such assurances.

          We have already pointed out that an investment adviser is a fiduciary
     who must act in accordance  with the highest standards of behavior.  We
     consider that Frankel's egregious misconduct demonstrated ethical lapses
     that disqualify him from assuming any post involving fiduciary
     responsibilities.  In our view, an advisory bar is necessary to protect the
     investing public from the risk of harm at Frankel's hands.  The public
     interest requires that he be barred from association with any investment
     adviser, registered or unregistered. <(21)>
                              

          20/  Meyer Blinder, supra, 65 SEC Docket at 1981.

          21/  The Division's motion to withdraw its request for oral
               argument and to file a supplemental brief is granted.  That
               brief and Frankel's reply memorandum are made part of the
               record herein.  All of the contentions advanced by the
               parties have been considered.  They are rejected or
               sustained to the extent that they are inconsistent or in
               accord with the views expressed herein.

                              ======END OF PAGE 7======







          An appropriate order will issue. <(22)>

          By the Commission (Chairman LEVITT and Commissioners JOHNSON and
     UNGER); Commissioner HUNT dissenting in part and Commissioner CAREY not
     participating.




                                        Jonathan G. Katz
                                            Secretary



     Commissioner HUNT, dissenting in part:

          For the very most part, I join my colleagues in this fine opinion. 
     But because I believe that the Commission and its staff may not seek
     "collateral" suspensions or bars in litigated matters, and should not seek
     them in settled matters, I dissent from this particular aspect of the bars
     imposed against Messrs.  Frankel and Teicher.  See Meyer Blinder,
     Securities Exchange Act Release No. 39180 (October 1, 1997), 65 SEC Docket
     1970, 1982-1989 (Commissioner Hunt, dissenting).






















                              

          22/  Since the parties sought review only with respect to certain
               determinations made by the law judge, our order shall give
               the requisite notice that the remainder of the law judge's
               decision has become the final decision of this Commission.


                              ======END OF PAGE 8======







                               UNITED STATES OF AMERICA
                                      before the
                          SECURITIES AND EXCHANGE COMMISSION

     SECURITIES EXCHANGE ACT OF 1934
     Rel No.  40010 / May 20, 1998

     INVESTMENT ADVISERS ACT OF 1940
     Rel No.   1722 / May 20, 1998

     Admin. Proc. File No. 3-8394

                                        
                                        :
              In the Matter of          :
                                        :
               VICTOR TEICHER           :
          VICTOR TEICHER & CO., L.P.    :
              New York, New York        :
                                        :
               ROSS S. FRANKEL          :
             5 Seymour Place East       :
               Armonk, New York         :
                                        :
                                        

     ORDER IMPOSING REMEDIAL SANCTIONS AND NOTICE OF FINALITY

          On the basis of the Commission's opinion issued this day, it is

          ORDERED that Victor Teicher be, and he hereby is, barred from
     association with any unregistered investment adviser; and it is further

          ORDERED that Ross S. Frankel be, and he hereby is, barred from
     association with any investment adviser, registered or unregistered.

          No appeal was taken with respect to the remainder of the
     administrative law judge's initial decision, and the Commission did not
     choose to review the decision on its own initiative. Accordingly, notice is
     hereby given, pursuant to Rule 360(e) of the Commission's Rules of
     Practice, that the remainder of the law judge's decision has become the
     final decision of the Commission.  The order contained in that decision (1)
     barring Victor Teicher and Victor Teicher & Co., L.P. from association with
     any broker, dealer, registered investment adviser, municipal securities
     dealer or investment company and (2) barring Ross S. Frankel from 







     association with any broker, dealer, municipal securities dealer,
     investment company, member of a national securities exchange or member of a
     registered securities association is hereby declared effective.

          By the Commission.

                                   Jonathan G. Katz
                                       Secretary