UNITED STATES OF AMERICA
                                      Before the
                          SECURITIES AND EXCHANGE COMMISSION

             SECURITIES EXCHANGE ACT OF 1934
             Release No. 34-40910 / January 11, 1999

             ADMINISTRATIVE PROCEEDING
             File No. 3-9803

             ___________________________________
                                                :
             In the Matter of                   :    ORDER MAKING
             FINDINGS                           :    AND IMPOSING
             CERTAIN MARKET MAKING              :    SANCTIONS AS TO
             ACTIVITIES ON NASDAQ               :    J.P. MORGAN
                                                :    SECURITIES, INC.,
                                                :    DONALD A.
                                                :    DUNWORTH, MARK A.
                                                :    GALLAGHER AND
                                                :    DAVID J. MOTTES
             ___________________________________:

                                          I.

                  In the accompanying Order Instituting Proceedings
             Pursuant to Sections 15(b) and 21C of the Securities
             Exchange Act of 1934 and Findings of the Commission ("Order
             Instituting Proceedings"), the Securities and Exchange
             Commission ("Commission") instituted these public
             administrative proceedings against J.P. Morgan Securities,
             Inc. ("J.P. Morgan"), Donald A. Dunworth, Mark A. Gallagher
             and David J. Mottes, and other firms and individuals.
             Contemporaneously, J.P. Morgan, Donald A. Dunworth, Mark A.
             Gallagher and David J. Mottes ("Respondents") have submitted
             Offers of Settlement ("Offers") in anticipation of the
             institution of these proceedings, which the Commission has
             determined to accept.  In their Offers, Respondents, solely
             for the purposes of these proceedings and any other
             proceedings brought by or on behalf of the Commission or to
             which the Commission is a party, prior to a hearing pursuant
             to the Commissions Rules of Practice, and without admitting
             or denying the findings herein, except for the findings of
             Section II.A., which are admitted, have consented to the
             entry of the Order Instituting Proceedings and this Order
             Making Findings and Imposing Sanctions as to J.P. Morgan,
             Donald A. Dunworth, Mark A. Gallagher and David J. Mottes
             (which are hereinafter referred to as the "Orders").

                  The Commission has determined that it is appropriate
             and in the public interest to accept the Respondents Offers
             and accordingly is issuing this Order.

                                         II.

                  On the basis of the Orders and Respondents Offers, the
             Commission finds[1] the following:

                  A.   Respondents

                  J.P. Morgan, a Delaware corporation, is registered with
             the Commission as a broker-dealer pursuant to Section 15(b)
             of the Securities Exchange Act of 1934 ("Exchange Act").  At
             all relevant times, J.P. Morgan made markets in a number of
             securities traded in the Nasdaq market.  J.P. Morgan's
             principal place of business during the relevant time period
             was New York, New York.  J.P. Morgan traded Nasdaq stocks
             for its own accounts and for the accounts of institutional
             and retail investors.  At all times relevant herein, J.P.
             Morgan was a member of the National Association of
             Securities Dealers, Inc. ("NASD"), a national securities
             association registered with the Commission under Section 15A
             of the Exchange Act.

                  Donald A. Dunworth, age 42, resides in Upper Montclair,
             New Jersey and, at all relevant times, was a Nasdaq trader
             at J.P. Morgan.  As a Nasdaq trader, Donald A. Dunworth was
             responsible for making markets in certain securities traded
             on the Nasdaq Stock Market.

                   Mark A. Gallagher, age 34, resides in Mineola, New
             York and, at all relevant times, was a Nasdaq trader at J.P.
             Morgan.  As a Nasdaq trader, Mark A. Gallagher was
             responsible for making markets in certain securities traded
             on the Nasdaq Stock Market.

                   David J. Mottes, age 37, resides in West Islip, New
             York and, at all relevant times, was a Nasdaq trader at J.P.
             Morgan.  As a Nasdaq trader, David J. Mottes was responsible
             for making markets in certain securities traded on the
             Nasdaq Stock Market.
                  B.   Factual Summary

                  In connection with its activities as a Nasdaq market
             maker, J.P. Morgan, Donald A. Dunworth, Mark A. Gallagher
             and David J. Mottes engaged in the following activities, as
             more fully described in the applicable sections of the
             accompanying Order Instituting Proceedings, in the following
             securities and on the following dates.

                  1.   The Fraudulent Coordination of Quote Movements

                  J.P. Morgan engaged in, or caused, the coordinated
             entry of quotations on Nasdaq in violation of Sections
             15(c)(1) and (2) of the Exchange Act and Rules 15c1-2 and
             15c2-7 thereunder, in one or more of the respects described
             in Section II.C.1. of the Order Instituting Proceedings in a
             market making transaction or a related series of market
             making transactions in:

                         a. the stock of Flagstar Companies Inc. ("FLST")
                       on April 28, 1994, aided and abetted by its trader
                       Donald A. Dunworth;

                  b. the stock of Tele Communications Inc. - Class A
                  ("TCOMA") on
                  June 7, 1994, aided and abetted by its trader Donald A.
                  Dunworth;

                  c. the stock of Centocor Inc. ("CNTO") on September 20,
                  1994, aided
                  and abetted by its trader Donald A. Dunworth;

                  d. the stock of Novell Inc. ("NOVL") on October 11,
                  1994, aided and
                  abetted by its trader Donald A. Dunworth;

                  e. the stock of Marshall & Ilsley ("MRIS") on July 29,
                  1994, aided and
                  abetted by its trader Mark A. Gallagher;

                  f. the stock of Charming Shoppes Inc. ("CHRS") on
                  August 19, 1994,
                  aided and abetted by its trader Mark A. Gallagher;

                  g. the stock of Lin Broadcasting Corp. ("LINB") on
                  August 18, 1994,
                  aided and abetted by its trader Mark A. Gallagher;

                  h. the  stock of Cambridge Technology Partners Inc.
                  ("CATP") on
                  May 25, 1994, aided and abetted by its trader David J.
                  Mottes; and

                  i.   the stock of Cambridge Technology Partners Inc.
                       ("CATP") on June 30, 1994, aided and abetted by
                       its trader David J. Mottes.

                  2.   Undisclosed Arrangements to Coordinate Quotations

                  J.P. Morgan entered, or caused to be entered, in the
             Nasdaq market fictitious quotations in one or more respects
             described in Section II.C.2. of the Order Instituting
             Proceedings in violation of Section 15(c)(2) of the Exchange
             Act and Rule 15c2-7 thereunder, in a market making
             transaction or related series of market making transactions
             in:

                  a.   the stock of Nextal Communications Inc. - Class A
                       ("CALL") on April 7, 1994, aided and abetted by
                       its trader Donald A. Dunworth;

                  b.   the stock of Perrigo Co. ("PRGO") on May 11, 1994,
             aided and
             abetted by its trader Donald A. Dunworth;

                  c.   the stock of Amgen Inc. ("AMGN") on June 22, 1994,
             aided and
             abetted by its trader Donald A. Dunworth;

                  d.   the stock of Apple Computer Inc. ("AAPL") on
             August 2, 1994,
             aided and abetted by its trader Donald A. Dunworth;

                  e.   the stock of Gilead Sciences Inc. ("GILD") on
             August 22, 1994,
             aided and abetted by its trader Donald A. Dunworth;

                  f. the stock of Tele Communications Inc. - Class A
                  ("TCOMA") on
                  September 16, 1994, aided and abetted by its trader
                  Donald A.
                  Dunworth;

                  g.   the stock of Novell Inc. ("NOVL") on October 5,
             1994, aided and
             abetted by its trader Donald A. Dunworth;

                  h.   the stock of Novell Inc. ("NOVL") on October 24,
             1994, aided and
             abetted by its trader Donald A. Dunworth;

                  i.   the stock of Oracle Systems Corp. ("ORCL") on May
             11, 1994, aided
             and abetted by its trader Mark A. Gallagher;

                  j.   the stock of Oracle Systems Corp. ("ORCL") on
             August 30, 1994,
             aided and abetted by its trader Mark A. Gallagher;

                  k.   the stock of Oracle Systems Corp. ("ORCL") on
             September 15, 1994,
             aided and abetted by its trader Mark A. Gallagher;

                  l.   the stock of Simpson Manufacturing Co. ("SMCO") on
             October 11,
             1994, aided and abetted by its trader Mark A. Gallagher;

                  m.   the stock of Cambridge Technology Partners Inc.
             ("CATP") on May
             24, 1994, aided and abetted by its trader David J. Mottes;

                  n.   the stock of Cambridge Technology Partners Inc.
             ("CATP") on May
             25, 1994, aided and abetted by its trader David J. Mottes;

                  o.   the stock of Cambridge Technology Partners Inc.
             ("CATP") on June
             30, 1994, aided and abetted by its trader David J. Mottes;
             and

                  p.   the stock of Acclaim Entertainment ("AKLM") on
                       August 17, 1994, aided and abetted by its trader
                       David J. Mottes.

                  3.   Intentional Delaying of Trade Reports

                  J.P. Morgan engaged in, or caused, a manipulation by
             delaying trade reporting in one or more of the respects
             described in Section II.C.3. of the Order Instituting
             Proceedings in violation of Section 15(c)(1) of the Exchange
             Act and Rule 15c1-2 thereunder, in a market making
             transaction or related series of market making transactions
             in:

                  a. the stock of Simpson Manufacturing Co. ("SMCO") on
                  August 2,
                  1994, aided and abetted by its trader Mark A.
                  Gallagher;

                  b. the stock of Simpson Manufacturing Co. ("SMCO") on
                  October 5,
                  1994; and

                  c. the stock of Cambridge Technology Partners Inc.
                  ("CATP") on
                  August 9, 1994, aided and abetted by its trader David
                  J. Mottes.

                  4.   Other Market Maker Misconduct

                  J.P. Morgan engaged in, or caused, other manipulative
             conduct in one or more of the respects described in Section
             II.C.4. of the Order Instituting Proceedings in violation of
             Section 15(c)(1) of the Exchange Act and Rule 15c1-2
             thereunder, in a market making transaction or related series
             of market making transactions in:

                  a.   the stock of Novell Inc. ("NOVL") on October 13,
             1994, aided and
             abetted by its trader Donald A. Dunworth.

                  5.   Best Execution Violations

                  J.P. Morgan failed, or caused the failure, to provide
             best execution in the handling of customer orders in one or
             more of the respects described in Section II.C.5. of the
             Order Instituting Proceedings in violation of Section
             15(c)(1) of the Exchange Act and Rule 15c1-2 thereunder, in
             a market making transaction or related series of market
             making transactions in:

                  a.   the stock of First Security Corp. ("FSCO") on
                       April 7, 1994, aided and abetted by its trader
                       Donald A. Dunworth;

                  b. the stock of Mid Ocean Ltd. ("MOCNF") on August 30,
                  1994, aided
                  and abetted by its trader Donald A. Dunworth; and

                  c.   the stock of American Management Systems ("AMSY")
             on May 11,
             1994, aided and abetted by its trader Mark A. Gallagher.

                  6.   Failure to Honor Quotations

                  J.P. Morgan failed to honor its quotations in one or
             more of the respects described in Section II.C.6. of the
             Order Instituting Proceedings in violation of Section 11A(c)
             of the Exchange Act and Rule 11Ac1-1 thereunder, in a market
             making transaction or related series of market making
             transactions in:

                  a.   the stock of The AES Corp. ("AESC") on October 5,
                       1994, aided and abetted by its trader Donald A.
                       Dunworth.

                  7.   Failure to Keep Accurate Books and Records

                  J.P. Morgan failed to keep and maintain accurate books
                       and records in
             one or more of the respects described in Section II.C.7. of
                       the Order
             Instituting Proceedings in violation of Section 17(a) of the
                       Exchange Act
             and Rule 17a-3 thereunder, in a market making transaction or
                       related
             series of market making transactions in:

             **FOOTNOTES**

              [1]: The findings herein are solely for the purpose of these
                   proceedings, and are not binding on any person not a
                   respondent in these proceedings.

                                                   1

                  a.   the stock of Cambridge Technology Partners Inc.
                       ("CATP") on May 24, 1994;

                  b. the stock of Cambridge Technology Partners Inc.
                  ("CATP") in two
                  violations on August 9, 1994;

                  c. the stock of Amgen Inc. ("AMGN") on June 22, 1994;

                  d. the stock of Mid Ocean Ltd. ("MOCNF") on August 30,
                  1994;

                  e. the stock of Simpson Manufacturing Co. ("SMCO") on
                  August 2,
                  1994;

                  f. the stock of Simpson Manufacturing Co. ("SMCO") on
                  October 5,
                  1994;

                  g. the stock of The AES Corp. ("AESC") in two
                  violations on October
                  5,  1994;

                  h. the stock of West One Bancorp ("WEST") on June 7,
                  1994; and

                  i.   the stock of Acclaim Entertainment ("AKLM") on
             August 17, 1994.

                  8.   Section 15(f) Violation

                  The investigation revealed a deficiency in the
             procedures established by respondent J.P. Morgan to prevent
             the misuse of material, nonpublic information.   As a multi-
             service investment bank, J.P. Morgan provided Nasdaq-listed
             clients with underwriting and other investment banking
             services, while also making markets in their securities.  In
             order to prevent the misuse of material, nonpublic
             information, J.P. Morgans applicable policies and
             procedures provided that, whenever a trader received
             "material nonpublic information" from an investment banker,
             the trader and investment banker inform the Compliance
             Department of the transference of the nonpublic information.
             The procedure called for the trader and investment banker
             involved, in the first instance, to decide whether or not
             the information was material.  This procedure was flawed,
             because the determination of whether or not information is
             material--and in effect, the determination of whether or not
             the trader could continue trading--was placed in the hands
             of persons who lacked expertise in the applicable legal
             principles, and in the case of the trader, the supervised
             person who had a potential pecuniary interest in the outcome
             of the determination.  Such a procedure created the
             potential for uninformed decisionmaking and misuse of
             material nonpublic information.  The flaws in the procedure
             are illustrated by the following incident.

                  On May 10, 1994, Perrigo Company ("Perrigo") announced
             negative financial expectations.  This announcement caused a
             drop that day in the price of its stock of approximately 30
             percent.  Concerned by this market reaction, Perrigo asked
             J.P. Morgan, with which it had a pre-existing investment
             banking relationship, for advice as to what it might do to
             enhance the price of its stock.  J.P. Morgan initially
             suggested a stock buyback program by Perrigo and its
             management.  Perrigo and J.P. Morgan scheduled a meeting for
             the next day, May 11, 1994, at J.P. Morgans offices in New
             York.

                  Before the opening of the Nasdaq market on May 11,
             1994, a J.P. Morgan investment banker and other senior
             personnel had a conversation with the Nasdaq trader at J.P.
             Morgan who was responsible for making markets in Perrigo
             stock, in which the trader expressed his views as to how to
             deal with the Perrigo situation.  The trader raised the
             possibility of a stock buyback and was informed by the
             investment banker that J.P. Morgan was then in the process
             of analyzing a stock buyback.  During the morning of May 11,
             1994, the trader began accumulating a significant quantity
             of Perrigo stock.  The trader accumulated approximately
             100,000 shares believing that an announcement of a  buyback
             would likely have a positive impact on Perrigos stock
             price.   None of his supervisors and none of J.P. Morgans
             compliance personnel were aware that the trader was
             accumulating this position that day.  Neither the trader nor
             the investment banker and other J.P Morgan personnel
             involved believed that they had to inform Compliance of the
             traders knowledge because they did not believe the
             nonpublic information he had received about the analysis of
             a buyback to be material.  Under J.P. Morgans then existing
             procedures, notification of Compliance was therefore not
             necessary.

                  Subsequent to May 11, 1994, Perrigo did not proceed
             with a buyback and the trader did not profit from his
             involvement in and knowledge of the consideration of a
             buyback.  The trader sold his position on May 12 and 13,
             1994. Nevertheless, the fact that he was able to accumulate
             approximately 100,000 shares of Perrigo stock under these
             circumstances without the knowledge or approval of any
             supervisor or the Compliance Department reflects a
             deficiency in J.P. Morgans then existing policies and
             procedures.

                  In the ordinary course of business, the activities of a
             broker-dealers investment bankers on behalf of a client
             should not be revealed to its traders.  Investment bankers
             may, however, legitimately consult with a trader or involve
             him in their activities on behalf of a client, when
             necessary, to obtain his expertise and advice with respect
             to the market and market conditions.  In such circumstances,
             however, the potential for abuse of nonpublic information is
             significantly heightened because the trader could learn of
             confidential matters that may significantly affect the price
             of the relevant securities.

                  In the situation at hand, compliance or legal personnel
             should have been contacted when the trader met with the
             investment banker and other personnel, to evaluate whether
             or not he could continue to trade Perrigo stock in light of
             the nonpublic information he learned.  It was inadequate for
             J.P. Morgans procedures to defer this evaluation until the
             trader or one of the J.P. Morgans investment bankers or
             other personnel involved in the matter concluded that the
             trader had "material" nonpublic information.[2]

                  Whenever a trader is given nonpublic information
             concerning an investment banking engagement, the traders
             continued ability to transact in the relevant securities
             should be evaluated by compliance personnel or legal counsel
             with appropriate training and knowledge.  This does not mean
             that a trader must necessarily cease to trade the relevant
             security upon receiving the information.  That determination
             depends on the facts and circumstances of the particular
             situation.

                  Consultation with Compliance or legal counsel is
             especially important in circumstances such as those in
             question.  Perrigo had asked J.P. Morgan for advice about
             how to respond to its declining stock price and in
             particular about a potential stock buyback program.  There
             was great potential for rapid corporate decisions and
             actions, even within a single trading day, that could have
             materially affected the price of Perrigos stock.
             Compliance personnel or legal counsel confronted with such a
             situation, in the exercise of prudence, would have been able
             to evaluate the materiality of information provided to the
             trader, based on the facts at that time, and to assess the
             materiality of the traders knowledge based on potential
             developments in the future.

                       In view of the foregoing, J.P. Morgan violated
             Section 15(f) of the Exchange Act.[3]

                  9.   Failure to Reasonably Supervise Nasdaq Trading

                  J.P. Morgan failed reasonably to supervise its Nasdaq
             market making activities with a view to preventing future
             violations within the meaning of Section 15(b)(4)(E) of the
             Exchange Act, in one or more of the respects described in
             Section II.C.8.a. and b. of the Order Instituting
             Proceedings, and in the other following respects:

                  a.   Respondent J.P. Morgan in 1994 failed to
             promulgate, maintain and enforce policies and procedures
             concerning the potential for manipulation of the market by
             delaying the submission of trade reports;

                  b.   Respondent J.P. Morgan in 1994 failed to
             promulgate, maintain and enforce policies and procedures
             regarding a market makers obligation of best execution of
             customer orders; and

                  c.   Respondent J.P. Morgans policies and procedures
             in 1994 regarding a market makers obligation to honor its
             quotes were inadequate, in that its compliance manual merely
             stated in summary fashion that traders were required to
             trade at their displayed quotes; the absence of more
             detailed guidance led to incorrect understandings of the
             exceptions to the firm quote rule.

                  Donald A. Dunworth failed reasonably to supervise
             Nasdaq market making activities with a view to preventing
             future violations, in the manner described in Section
             II.C.9.a. and b. of the Order Instituting Proceedings, and
             in the other following respects:

                  a.   Respondent Donald A. Dunworth in 1994 failed to to
             promulgate, maintain and enforce policies and procedures
             concerning the potential for manipulation of the market by
             delaying the submission of trade reports.

             **FOOTNOTES**

                [2]:  This  is  not  to  say  that  all  contacts  between  a trader and
                investment  banking  and  other  personnel  need  to  be brought to  the
                attention  of  the  Compliance  Department.   The discussion  herein  is
                focused  on  the  circumstance  in  which  a trader is  given  nonpublic
                information relating to an ongoing investment banking engagement.

                [3]: The fact that neither the trader nor J.P.  Morgan  is  charged with
                insider  trading   in  violation  of  the antifraud provisions does  not
                affect the Section 15(f) charge.  Section  15(f)  by  its terms requires
                reasonable  policies  and procedures, and an underlying insider  trading
                violation is not a predicate  to  a  Section  15(f)  charge.  See In the
                Matter  of Gabelli & Company, Inc. and Gamco Investors, Inc., 58  S.E.C.
                Docket 443 (Rel. Nos. 34-35057 and IA-1457, Dec. 8, 1994).

                                                   2

                  10.  Unlawful Profits and Other Gains

                  While engaged in certain of the improper activities
             described above, J.P. Morgan obtained unlawful profits and
             gains, which, together with interest, total $42,218.00.

                                         III.

                  By reason of the foregoing, J.P. Morgan willfully
             violated Sections 11A(c), 15(c)(1) and (2), 15(f) and 17(a)
             of the Exchange Act, and Rules 11Ac1-1, 15c1-2, 15c2-7, and
             17a-3 thereunder, and failed reasonably to supervise its
             Nasdaq trading personnel within the meaning of Section
             15(b)(4)(E) of the Exchange Act.
             Donald A. Dunworth willfully aided and abetted and caused
             violations of Section 11A(c), 15(c)(1) and (2) of the
             Exchange Act and Rules 11Ac1-1, 15c1-2 and 15c2-7
             thereunder, and failed reasonably to supervise Nasdaq
             trading personnel within the meaning of Section 15(b)(4)(E)
             of the Exchange Act.
             Mark A. Gallagher willfully aided and abetted and caused
             violations of Section 15(c)(1) and (2) of the Exchange Act
             and Rules 15c1-2 and 15c2-7 thereunder.  David J. Mottes
             willfully aided and abetted and caused violations of Section
             15(c)(1) and (2) of the Exchange Act and Rules 15c1-2 and
             15c2-7 thereunder.

                                         IV.

                  In view of the foregoing and Respondents Offers, IT IS
             HEREBY ORDERED, pursuant to Sections 15(b) and 21C of the
             Exchange Act, that:

                  1.   J.P. Morgan shall cease and desist from committing
                       or causing any violation of, and committing or
                       causing any future violation of Sections 11A(c),
                       15(c)(1) and (2), 15(f) and 17(a) of the Exchange
                       Act, and Rules 11Ac1-1, 15c1-2, 15c2-7, and 17a-3
                       thereunder;

                  2.   J.P. Morgan shall, within 10 business days of the
                       entry of this Order, pay a civil penalty in the
                       amount of $1,275,000.00 by wire transfer in
                       accordance with instructions furnished by the
                       Commission staff, or by U.S. Postal money order,
                       certified check, bank cashiers check, or bank
                       money order, made payable to the Securities and
                       Exchange Commission, which shall be hand-delivered
                       or mailed to the Comptroller, Securities and
                       Exchange Commission, Operations Center, 6432
                       General Green Way, Mail Stop O-3, Alexandria, VA
                       22312, under cover of a letter that identifies
                       J.P. Morgan as a Respondent in these proceedings
                       and provides the caption and file number for these
                       proceedings; with (a) written confirmation of
                       payment by such wire transfer, or (b) a copy of
                       such cover letter and money order or check, to be
                       sent to Leonard W. Wang, Division of Enforcement,
                       Securities and Exchange Commission, 450 5th
                       Street, N.W., Mail Stop 7-1, Washington, D.C.
                       20549;

                  3.   J.P. Morgan shall, within 10 business days of
                       written notice from the Commission staff or the
                       Independent Consultant (as defined below), pay
                       disgorgement in the amount of $42,218.00 pursuant
                       to Section 21C(e) of the Exchange Act;

                  4.   J.P. Morgan shall, within 90 days of the date of
                       the entry of this Order, provide to the
                       independent consultant appointed by the Commission
                       in connection with these proceedings (the
                       "Independent Consultant") a description of its
                       policies, procedures and practices relating to
                       prevention or detection of the types of improper
                       conduct involving J.P. Morgan described in
                       Section II of this Order.  Within such time as the
                       Commission directs, the Independent Consultant
                       shall review such policies, procedures and
                       practices with a view to determining if they would
                       reasonably be expected to prevent and detect,
                       insofar as practicable, any of the types of
                       improper conduct involving J.P. Morgan described
                       in  Section II of this Order.  J.P. Morgan shall
                       cooperate with the Independent Consultants review
                       of J.P. Morgans policies, procedures and
                       practices, and shall, among other things, provide
                       such further information as the Independent
                       Consultant reasonably requests or that J.P. Morgan
                       deems relevant to the Independent Consultants
                       review, provided, however, that J.P. Morgan need
                       not provide any information to which it asserts a
                       valid claim of the attorney-client privilege.  The
                       Independent Consultant shall maintain the
                       confidentiality of all materials provided by J.P.
                       Morgan and shall not provide the materials to any
                       person, provided, however, that such materials may
                       be provided to the Commission or its staff.

                       If the Independent Consultant concludes that J.P.
                       Morgans policies, procedures and practices, as
                       presented, would reasonably be expected to prevent
                       and detect, insofar as practicable, any of the
                       types of improper conduct involving J.P. Morgan
                       described in  Section II of this Order, the
                       Independent Consultant shall inform J.P. Morgan of
                       this conclusion in writing, and his or her
                       responsibilities with respect to J.P. Morgan shall
                       conclude.  If the Independent Consultant cannot
                       conclude that J.P. Morgans policies, procedures
                       and practices meet the aforesaid standard, he or
                       she may recommend changes in or additions to J.P.
                       Morgans policies, procedures or practices for the
                       purpose of improving their ability to meet the
                       aforesaid standard.  J.P. Morgan shall implement
                       all such recommended changes or additions in a
                       timely manner, but in any event no later than
                       three months after receiving the recommendations
                       of the Independent Consultant or such other
                       reasonable time as determined by the Independent
                       Consultant; provided, however, if J.P. Morgan
                       believes that a change or addition to its
                       policies, procedures and practices recommended by
                       the Independent Consultant is unduly burdensome or
                       unreasonable, it may:  (a) propose an equally
                       effective alternative to the Independent
                       Consultant, and, with the Independent Consultants
                       approval, implement that alternative in lieu of
                       the Independent Consultants recommended change or
                       addition; or (b) petition the Commission, with
                       notice to the Independent Consultant and the
                       Division of Enforcement, for relief from the
                       recommendation of the Independent Consultant.

                       Within three months of receiving recommendations
                       of the Independent Consultant for changes in or
                       additions to its policies, procedures and
                       practices, J.P. Morgan shall report in writing to
                       the Independent Consultant with respect to the
                       implementation of the recommendations and/or any
                       equally effective alternatives approved by the
                       Independent Consultant.  If J.P. Morgans report
                       on implementation is without qualification and
                       states that said recommendations and/or
                       alternatives have been fully and effectively
                       implemented, the Independent Consultants
                       responsibilities with respect to J.P. Morgan shall
                       conclude.  If J.P. Morgans report on
                       implementation is qualified, or in any respect
                       indicates that implementation is not full and
                       effective, J.P. Morgan shall cooperate with all
                       further efforts of the Independent Consultant to
                       ensure that said recommendations and/or
                       alternatives are fully and effectively
                       implemented.  When the Independent Consultant
                       concludes that J.P. Morgan has fully and
                       effectively implemented said recommendations
                       and/or alternatives, he or she shall inform J.P.
                       Morgan in writing of this conclusion and his or
                       her responsibilities with respect to J.P. Morgan
                       shall conclude.  The fees and expenses of the
                       Independent Consultant arising from his or her
                       review of the policies, procedures and practices
                       of J.P. Morgan and the other respondent firms
                       subject to the Independent Consultants review
                       shall be prorated evenly among such firms, and in
                       such prorated amounts, be paid by each such firm,
                       provided however, that if the Independent
                       Consultant recommends changes or additions to J.P.
                       Morgans policies, procedures or practices, the
                       fees and expenses of the Independent Consultant
                       relating to the making and implementation of those
                       recommendations and/or any alternatives approved
                       by the Independent Consultant, and any
                       disagreements relating thereto, shall be paid by
                       J.P. Morgan.

                  5.   Donald A. Dunworth shall cease and desist from
                       committing or causing any violation of, and
                       committing or causing any future violation of
                       Sections 11A(c), 15(c)(1) and (2) of the Exchange
                       Act, and Rules 11Ac1-1, 15c1-2, and 15c2-7
                       thereunder;

                  6.   Donald A. Dunworth shall, within 10 business days
                       of the entry of this Order, pay a civil penalty in
                       the amount of $110,000.00 by wire transfer in
                       accordance with instructions furnished by the
                       Commission staff, or by U.S. Postal money order,
                       certified check, bank cashiers check, or bank
                       money order, made payable to the Securities and
                       Exchange Commission, which shall be hand-delivered
                       or mailed to the Comptroller, Securities and
                       Exchange Commission, Operations Center, 6432
                       General Green Way, Mail Stop O-3, Alexandria, VA
                       22312, under cover of a letter that identifies
                       Donald A. Dunworth as a Respondent in these
                       proceedings and provides the caption and file
                       number for these proceedings, with (a) written
                       confirmation of payment by such wire transfer, or
                       (b) a copy of such cover letter and money order or
                       check to be sent to Leonard W. Wang, Division of
                       Enforcement, Securities and Exchange Commission,
                       450 5th Street, N.W., Mail Stop 7-1, Washington,
                       D.C. 20549;

                  7.   Donald A. Dunworth be, and hereby is, suspended
                       from association with any broker, dealer,
                       municipal securities dealer, investment adviser or
                       investment company,  for a period of 6 1/2 months,
                       effective 15 weeks and one day after the date of
                       this Order; and

                  Donald A. Dunworth shall provide to the Commission,
                       within 10 days after the end of the 6 1/2 month
                       suspension described above, an affidavit that he
                       has complied fully with the sanctions described in
                       this Section;

                  8.   Mark A. Gallagher shall cease and desist from
                       committing or causing any violation of, and
                       committing or causing any future violation of
                       Sections 15(c)(1) and (2)of the Exchange Act, and
                       Rules 15c1-2 and 15c2-7thereunder;

                  9.   Mark A. Gallagher shall, within 10 business days
                       of the entry of this Order, pay a civil penalty in
                       the amount of $65,000.00 by wire transfer in
                       accordance with instructions furnished by the
                       Commission staff, or by U.S. Postal money order,
                       certified check, bank cashiers check, or bank
                       money order, made payable to the Securities and
                       Exchange Commission, which shall be hand-delivered
                       or mailed to the Comptroller, Securities and
                       Exchange Commission, Operations Center, 6432
                       General Green Way, Mail Stop O-3, Alexandria, VA
                       22312, under cover of a letter that identifies
                       Mark A. Gallagher as a Respondent in these
                       proceedings and provides the caption and file
                       number for these proceedings, with (a) written
                       confirmation of payment by such wire transfer, or
                       (b) a copy of such cover letter and money order or
                       check to be sent to Leonard W. Wang, Division of
                       Enforcement, Securities and Exchange Commission,
                       450 5th Street, N.W., Mail Stop 7-1, Washington,
                       D.C. 20549;

                  10.  Mark A. Gallagher be, and hereby is, suspended
                       from association with any broker, dealer,
                       municipal securities dealer, investment adviser or
                       investment company,  for a period of 15 weeks,
                       effective one day after the date of this Order;
                       and

                  Mark A. Gallagher shall provide to the Commission,
                       within 10 days after the end of the 15 week
                       suspension described above, an affidavit that he
                       has complied fully with the sanctions described in
                       this Section;

                  11.  David J. Mottes shall cease and desist from
                       committing or causing any violation of, and
                       committing or causing any future violation of
                       Sections 15(c)(1) and (2) of the Exchange Act, and
                       Rules 15c1-2 and 15c2-7 thereunder;

                  12.  David J. Mottes shall, within 10 business days of
                       the entry of this Order, pay a civil penalty in
                       the amount of $50,000.00 by wire transfer in
                       accordance with instructions furnished by the
                       Commission staff, or by U.S. Postal money order,
                       certified check, bank cashiers check, or bank
                       money order, made payable to the Securities and
                       Exchange Commission, which shall be hand-delivered
                       or mailed to the Comptroller, Securities and
                       Exchange Commission, Operations Center, 6432
                       General Green Way, Mail Stop O-3, Alexandria, VA
                       22312, under cover of a letter that identifies
                       David J. Mottes as a Respondent in these
                       proceedings and provides the caption and file
                       number for these proceedings, with (a) written
                       confirmation of payment by such wire transfer, or
                       (b) a copy of such cover letter and money order or
                       check to be sent to Leonard W. Wang, Division of
                       Enforcement, Securities and Exchange Commission,
                       450 5th Street, N.W., Mail Stop 7-1, Washington,
                       D.C. 20549;

                  13.  David J. Mottes be, and hereby is, suspended from
                       association with any broker, dealer, municipal
                       securities dealer, investment adviser or
                       investment company,  for a period of 12 weeks,
                       effective one day after the date of this Order;
                       and

                  David J. Mottes shall provide to the Commission, within
                       10 days after the end of the 12 week suspension
                       described above, an affidavit that he has complied
                       fully with the sanctions described in this
                       Section.

             By the Commission.

                                                     Jonathan G. Katz
                                                     Secretary

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