SECURITIES AND EXCHANGE COMMISSION
                                      Washington, D.C.

             SECURITIES EXCHANGE ACT OF 1934
             Rel. No. 40335 / August 19, 1998

             Admin. Proc. File No. 3-9346
             __________________________________________________
                                                               :
                  In the Matter of the Application of          :
                                                               :
                       JUSTINE SUSAN FISCHER                   :
                       4400 Calle Del Conde                    :
                         Tucson, AZ 85718                      :
                                                               :
               For Review of Disciplinary Action Taken by the  :
                                                               :
                       NEW YORK STOCK EXCHANGE, INC.           :
             __________________________________________________:

             OPINION OF THE COMMISSION

                  NATIONAL SECURITIES EXCHANGE -- REVIEW OF DISCIPLINARY
             PROCEEDINGS

                       Conduct Inconsistent with Just and Equitable
                       Principles of Trade

                            Making Material Misstatements Regarding
                            Investment Strategy
                            Unauthorized Transactions
                            Excessive Trading
                            Unsuitable Trading

                       Exercise of Discretionary Power Without Written
                       Authorization

                  Registered representative of member firm of national
                  securities exchange omitted to disclose material facts
                  to customers, traded in customer's account without
                  prior written approval and without authorization, and
                  traded excessively and unsuitably in customers'
                  accounts.  Held, exchange's findings of violation and
                  the sanctions it imposed are sustained.

             APPEARANCES:

                  Michael Salcido, of Michael Salcido, P.C., for Justine
             Susan Fischer.

                  Arthur S. Okun, Mary Brienza, and Sherrill Spatz, for
             the New York Stock Exchange, Inc.


             Appeal Filed:  September 16, 1997
             Last Brief Received:  October 30, 1997

                                             I.

                  Justine Susan Fischer, who during the period at issue
             was a registered representative with PaineWebber, Inc., a
             member of the New York Stock Exchange, Inc. ("NYSE" or
             "Exchange"), appeals from NYSE disciplinary action.  The
             Exchange found that Fischer:

                  1.   Engaged in conduct inconsistent with just and
                       equitable principles of trade by:

                       a.   making one or more misstatements and/or
                            omitting to state material facts to one or
                            more customers regarding an investment
                            strategy;

                       b.   effecting transactions in the account of a
                            customer without the prior approval of the
                            customer;

                       c.   engaging in trading in the account of two
                            customers that was excessive in view of the
                            customers' investment objectives, investment
                            experience, and the financial resources in
                            the customers' accounts; and

                       d.   effecting margin transactions in the accounts
                            of two customers that were unsuitable in view
                            of the customers' investment objectives,
                            investment experience, and the financial
                            resources in the customers' accounts. [1]/

                  2.   Violated Exchange Rule 408(a) by exercising
                       discretionary power in the account of a customer,
                       without first obtaining the written authorization
                       of the customer.

             The Exchange censured Fischer and imposed a bar for one year
             from employment or association in any capacity with any
             member or any member organization.  We base our findings on
             an independent review of the record.

                                            II.

                  Fischer joined PaineWebber in March 1982 as a
             registered representative and remained until she was
             discharged in November 1991.  During the mid-to-late 1980s,
             PaineWebber recommended to its customers the purchase of
             discounted bonds issued by the Government National Mortgage
             Association ("GNMA").  The government guarantees the timely
             payment of both principal and interest on these bonds, which
             represent pools of underlying mortgages.  Thus, investors
             are guaranteed the amounts due each month.  Nevertheless,
             investors receive the total principal and interest payable
             on the instruments only if they hold the GNMAs until
             maturity.  With the approval of PaineWebber, Fischer
             conducted several seminars for the public promoting the cash
             purchase of securities representing older GNMA pools that
             were trading at a discount.  Subsequently, Fischer began to
             recommend and use margin to purchase such securities in
             several of her clients' accounts.  Use of margin meant that,
             if there was a downturn in the bond market, these clients
             would have to either infuse cash or sell securities to meet
             margin calls.

                  The Exchange's findings of violation relate to two
             customer accounts handled by Fischer at PaineWebber.  The
             relevant facts are as follows.

             A.   Lucille Van Campen

                  In May 1983, Lucille Van Campen opened an account with
             Fischer at PaineWebber.  At that time, Van Campen was 70
             years old, had a high school education, had retired from a
             position as a secretary and bookkeeper for a physician, and
             was working part-time as a computer clerk earning $7 per
             hour.  Van Campen also received $100 a week from a trust
             fund that had been established in 1978.  In May 1984, Van
             Campen inherited an additional income interest in a trust
             fund worth $100 weekly.  Van Campen owned a townhouse that
             was valued at about $85,000.  At the time she opened her
             account, Van Campen's prior investment experience was
             limited to purchases of U.S. Treasury bills and certificates
             of deposit ("CDs").  The New Account Form for Van Campen,
             which she testified that she did not see until after she
             closed the account with Fischer, falsely indicated that Van
             Campen had a net worth of over $250,000, annual income of
             $75,000, and real estate valued at $150,000.

                  Initially, Van Campen invested in municipal bonds.
             After attending PaineWebber seminars, at which Fischer
             promoted GNMAs as lucrative investments, Van Campen decided
             to invest in them.  She sold her municipal bonds in July
             1985 and invested the proceeds, approximately $18,000, in
             securities representing GNMAs.  Van Campen explained to
             Fischer that she was trying to amass $100,000 for custodial
             care because she did not have immediate family to care for
             her.  Fischer told Van Campen that the GNMAs would yield a
             higher rate of return than the municipal bonds.

                  Van Campen also signed a Client Agreement that
             authorized Fischer to trade on margin in her account.  Van
             Campen did not read the document and did not understand that
             it allowed for margin trading.  Moreover, at the time, Van
             Campen did not understand that "margin" meant that she was
             borrowing money from PaineWebber to purchase the GNMAs.
             Fischer did not explain that, if the bond market fell, Van
             Campen could either have to infuse cash or sell GNMAs at a
             loss.

                  Although Van Campen agreed, in general, to let Fischer
             roll over proceeds in her account, Fischer never asked for
             nor received written authorization to trade in the account
             without Van Campen's prior approval.  Nevertheless, between
             November 1986 and August 1987, Fischer bought and sold
             numerous GNMAs in Van Campen's account.  Fischer obtained
             Van Campen's prior approval for only two transactions in
             which Fischer needed additional funds for the purchases.
             For the remainder of the transactions, Fischer acted on a
             discretionary basis, without seeking Van Campen's
             authorization.

                  As of December 1986, the Van Campen account had a
             margin debit balance of approximately $787,300.  The margin
             interest charged to her account in 1986 totaled
             approximately $40,870.  After reviewing her December
             statement, Van Campen set up a meeting with Fischer because
             she was concerned about the debit balance.  Van Campen
             testified before the Hearing Exchange Panel that she asked
             when Fischer was going to sell some of the GNMAs, but
             Fischer insisted that the account was doing well.  Van
             Campen testified that she came away from their conversation
             frustrated because "her mission was not accomplished."

                  In April 1987, the value of the GNMAs declined due to a
             fall in the bond market.  At that time, Van Campen contacted
             Fischer to check on her account.  Fischer stated that she
             was leaving the country, but she advised Van Campen to keep
             the GNMAs.  Shortly thereafter, Rudy Ferlan, Fischer's
             supervisor at PaineWebber, summoned Van Campen to a meeting
             at which he asked her for money to meet margin calls.  Van
             Campen, who testified that at this point she lost all
             confidence in Fischer, requested that her account be
             transferred from Fischer to another registered
             representative.

             B.   Patricia and Rudolph Malusa

                  In the spring of 1986, after attending a seminar on
             GNMAs given by Fischer, Patricia and Rudolph Malusa opened
             an account with Fischer at PaineWebber.  At that time,
             Rudolph Malusa was 57 years old, had a high school
             education, and was planning to retire from his position as a
             technician for a telephone company.  Patricia Malusa was 56
             years old, had a high school education, and worked part-time
             as a real estate broker.  Their combined net worth,
             including their residence and three rental properties, was
             about $300,000.  The Malusas informed Fischer that they were
             interested in conservative, income-producing investments
             because, after Rudolph Malusa retired, they would have
             limited income.  The New Account Form for the Malusa account
             confirmed that their highest priorities were income and
             investment-grade
             investments. [2]/

                  In March 1986, the Malusas, relying on Fischer's
             assurances that GNMAs were safe, secure, and government-
             backed, purchased $10,390 of discounted GNMAs on a cash
             basis.  A few months later, Fischer suggested that the
             Malusas "maximize" their account.  P. Malusa testified that
             Fischer did not discuss what "maximizing" meant and did not
             use the word "margin."  Rather, Fischer told P. Malusa that
             this was a safe strategy that Fischer used in both her own
             personal account and the accounts of family members and that
             "nobody had ever lost a cent."  According to P. Malusa,
             Fischer did not explain that, if the bond market fell, the
             Malusas might have to infuse cash or sell GNMAs at a loss to
             meet margin calls.  Nor did Fischer explain that the
             government guarantee that the entire amount of principal
             would be returned applied only if the GNMAs were held to
             maturity.

                  During the period August 1986 through December 1986,
             Fischer bought more GNMAs for the Malusas' account.  All but
             one of these purchases were on margin.  As of December 31,
             1986, the Malusa account had a margin debit balance of
             approximately $454,112.  Margin interest charged to the
             Malusa account totaled approximately $5,479, which exceeded
             the GNMA interest earned during the same period by
             approximately $1,000.

                  In early 1987, the bond market declined.  The Malusas
             received numerous margin calls from PaineWebber.  P. Malusa
             testified that she was not concerned by mailgrams that she
             received notifying the Malusas of margin calls, because
             Fischer had told them that mailgrams did not mean anything
             and were a "joke."  Nonetheless, between February and April
             1987, Fischer sold GNMAs in the Malusa account to meet valid
             margin calls without discussing the sales with the Malusas.

                  After receiving their April account statement
             indicating the sale of several GNMAs, the Malusas became
             concerned and contacted Fischer to set up a meeting.
             Fischer, along with Ferlan and a PaineWebber associate who
             was introduced as a "hedge expert," met with the Malusas.
             P. Malusa testified before the Panel that they informed the
             Malusas that:

                  this thing that happened [the bond market fall] would
                  probably never happen again, but just to be sure, that
                  they were going to put this hedge in place.  And it was
                  like a seesaw, he said.  If this went down, that would
                  go up, and that never would we ever have a problem
                  again, if we could just get our hands on some more
                  money and rescue the account, stabilize the account
                  where it was.

             Because the Malusas did not have cash on hand, Ferlan
             suggested that they borrow against one of their life
             insurance policies to pay down the margin debit in their
             account, which totaled $232,540.  The Malusas also sold
             their shares of a mutual fund for approximately $9,400 and
             deposited the proceeds along with the funds from the life
             insurance policy, which they had been forced to sell, into
             their account to reduce their margin debt and open a "hedge"
             account investing in commodity futures. [3]/

                  Despite the Malusas' desire to reduce their debit
             balance, between June and August 1987, Fischer purchased
             more GNMAs on margin for the Malusa account.  At the end of
             August, the margin debit balance had increased to
             approximately $248,740.  Year-to-date margin interest
             charged to the Malusa account totaled approximately $11,020.

                                            III.

                  A.   Fischer challenges the Exchange's finding that she
             made material misstatements or omitted to disclose material
             facts to PaineWebber's customers about her strategy of
             trading GNMAs on margin.  She asserts that the investments
             were safe and endorsed by PaineWebber.  Fischer claims that
             trading GNMAs permitted clients to "enjoy the 'spread,'"
             which appears to be a reference to the discount between the
             then-current market value of the GNMAs and their face
             principal value.  She further asserts that the leverage
             afforded by trading on margin permitted clients to multiply
             the spread "ten times over" since initial margin for these
             transactions was ten percent.

                  Fischer concedes, however, that her clients could only
             "enjoy the spread" if they held the GNMAs to maturity.  If
             the market moved against her clients, and they did not have
             the ability to meet margin calls, the GNMAs would have to be
             liquidated.  The customers would suffer substantial losses
             if the liquidation occurred below the original discount at
             which the GNMAs had been purchased.

                  Fischer failed to explain the risks of margin trading
             to Van Campen and the Malusas and did not explain that
             additional cash infusions, which neither Van Campen nor the
             Malusas had the resources to provide, might be necessary in
             the event of a market downturn.  Moreover, when the Malusas
             received margin calls, Fischer told them to ignore the
             mailgrams, despite the fact that Fischer sold several of
             their GNMAs to meet valid margin calls.

                  Fischer further asserts that, if Van Campen and the
             Malusas had held on to their GNMAs, as she did and as she
             recommended that they do, they would not have lost any
             money.  At the time, however, Fischer's income was over
             $100,000, and she had a net worth of approximately $1
             million.  She, unlike Van Campen and the Malusas, apparently
             had available funds to cover margin calls.

                  Fischer further represented to Van Campen and the
             Malusas that the margin interest payments would be covered
             by the GNMA interest, the "spread" from the account, and the
             periodic return of the GNMA principal.  She argues that the
             "remaining principal" (which we understand to mean the total
             amount of principal payments the holder would receive if the
             GNMA were held to maturity) on the GNMAs always exceeded the
             margin debt.  This assertion was misleading.  The return of
             principal was, in fact, the partial return of the customer's
             original investment in the GNMA.  Using the return of
             principal to pay interest and commissions meant that these
             customers would receive the return of their original
             investment only if the amount of the discount from the face
             value of the GNMA offset the use of their principal to pay
             margin interest.

                  Fischer also argues that PaineWebber, through her
             supervisor, Ferlan, authorized and approved her strategy and
             all information that she gave to clients.  Fischer argues
             that PaineWebber authorized and encouraged the sale of GNMAs
             on margin as evidenced by a representative from the New York
             office who attended and spoke at seminars with her.
             Fischer, however, cannot use PaineWebber or its employees as
             a shield. [4]/  PaineWebber promoted selling discounted
             GNMAs on a cash basis, an investment that the NYSE found was
             relatively safe.  It was Fischer's responsibility to
             determine which of her customers could suitably engage in
             margin trading.  PaineWebber did not authorize the sale of
             GNMAs on margin to investors, such as Van Campen and the
             Malusas, who did not have either the resources or the
             sophistication necessary to make such investments.

                  B.   Fischer also challenges the Exchange's findings
             both that she violated Exchange Rule 408(a) and engaged in
             conduct inconsistent with just and equitable principles of
             trade by exercising discretionary power and effecting
             transactions in Van Campen's account without first obtaining
             Van Campen's authorization.  Exchange Rule 408(a) prohibits
             employees of member firms from exercising discretionary
             power in a customer's account without first obtaining
             written authorization from the customer.  Fischer neither
             asked for, nor received, written discretionary authority
             from Van Campen to effect any purchases without Van Campen's
             prior approval.  Fischer does not claim to have received any
             such written authorization.

                  Fischer argues, however, that Van Campen knew that
             Fischer was using the funds Van Campen gave her and
             reinvesting the proceeds from the GNMAs to purchase
             additional GNMAs.  She argues that Van Campen orally
             authorized the trades and authorized her to reinvest the
             returns of principal and interest.  Van Campen agrees that
             she orally authorized two sets of purchases of GNMAs and
             brought money to Fischer to make such transactions.
             Fischer, however, effected other reinvestments without
             either Van Campen's prior approval for each transaction or a
             written authorization for discretionary trading.

                  Fischer also claims that Van Campen never complained
             about or repudiated any trades.  That Van Campen did not
             complain about the transactions is not a defense.  Even
             assuming that a failure to complain amounted to
             ratification, we have repeatedly held that ratification of a
             transaction after the fact does not mean trades were
             properly authorized. [5]/

                  C.   The Exchange found that Fischer engaged in
             excessive and unsuitable trading in both the Van Campen and
             Malusas' accounts.  The Division of Enforcement's expert
             found that the turnover rate in the Van Campen account was
             12.7 and in the Malusas' account was 5.2. [6]/  The "break-
             even return" in the Van Campen account was 111.2%, which
             means that, in order to pay for the cost of commissions and
             margin interest, the average annual return in the account
             would have had to be 111.2%  The Van Campen account had one
             of the highest break-even returns the expert's firm had ever
             calculated.  The Malusas would have needed to earn 48.9% on
             their investments in order to break even. [7]/

                  Fischer contends that she did not engage in trading
             that was excessive in view of Van Campen's and the Malusas'
             investment objectives, experience, and financial resources.
             She argues that the Exchange's expert used faulty methods to
             calculate the "break-even returns" because the expert did
             not take into account the fact that the GNMAs were sold
             before maturity.

                  We disagree.  The turnover rates and break-even points
             for these accounts were extremely high. [8]/  Moreover, the
             Division's expert correctly calculated the break-even
             returns; Van Campen and the Malusas were forced to sell the
             GNMAs before maturity in order to meet margin calls.

                  Fischer admits that her strategy was not suitable for
             these customers.  She suggests, however, that this failure
             involved a "judgment call."  We disagree.  During the period
             Fischer was purchasing GNMAs on margin in the Van Campen
             account, Van Campen paid approximately $57,800 in margin
             interest and $49,500 in commissions.  As of December 1986,
             Van Campen faced a margin debit balance of $787,300, when
             her income consisted of only part-time work at $7 an hour
             and two small trust funds.  The Malusas were forced to sell
             their life insurance policy and a tax-free mutual fund in
             order to "rescue" the account from margin calls and to avoid
             liquidating their investments at a market price much lower
             than that at which the GNMAs had been purchased.  Moreover,
             the Malusas were paying margin interest plus commissions in
             excess of their annual income, and had margin debt well in
             excess of their net worth.  Over the life of the account,
             the Malusas incurred margin interest charges of
             approximately $30,800 and paid approximately $22,600 in
             commissions.

                  Additionally, the strategy was inappropriate in light
             of the customers' goals and objectives.  While Van Campen
             wanted to turn her initial investment of $18,000 into
             $100,000, for custodial care, Fischer's strategy was not
             appropriate considering Van Campen's net worth, income, and
             level of sophistication.  The Malusas indicated a preference
             for conservative, income-producing investments.  Neither
             client was interested in nor had the financial resources or
             experience to engage in highly leveraged trading. [9]/

                       *         *         *         *         *

                  We therefore sustain the NYSE's findings that Fischer
             made material misstatements regarding investment strategy,
             engaged in unauthorized transactions and excessive and
             unsuitable trades, and exercised discretionary power without
             written authorization.

                                            IV.

                  Fischer argues that the sanctions are excessive and
             that other associated persons who engaged in worse
             misconduct in unrelated matters have received lighter
             penalties.  Fischer claims that she was not a "rogue broker"
             and reiterates that her conduct was approved by PaineWebber
             and Ferlan.

                  Fischer does not challenge the Exchange's finding that
             she engaged in unsuitable margin transactions in clients'
             accounts.   We have sustained the Exchange's other findings
             of violations.  The totality of Fischer's misconduct
             reflects a serious misunderstanding of her responsibility to
             her clients and the nature of what she urged them to do.
             She recommended a highly risky investment strategy of
             trading GNMAs on margin to clients who did not understand
             and could not afford the risks involved, while failing to
             reveal those risks.  Fischer still does not appreciate the
             significance of her actions.  In light of Fischer's serious
             misconduct, we conclude that the sanctions assessed by the
             Exchange are neither excessive nor oppressive.

                  An appropriate order will issue. [10]/

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




                  Jonathan G. Katz
                  Secretary



             **FOOTNOTES**

             [1]:/ Fischer does not appeal the finding of violation with
                  regard to this part of this charge.

             [2]:/ The then-current PaineWebber New Account Form listed
                  four categories of risk:  income, investment grade,
                  capital gains, and speculative.  The form required the
                  customers to rank all four degrees of risk.

             [3]:/ The NYSE found that, because another registered
                  representative handled the hedge account, Fischer bore
                  no responsibility for that account.

             [4]:/ A broker has responsibility for his or her own actions
                  and cannot blame others for her own failings.  Dan A.
                  Druz, Securities Exchange Act Rel. No. 35203 (Jan. 9,
                  1995), 58 SEC Docket 1621, 1628 n.18 (branch manager is
                  not excused for his own failure to supervise by the
                  supervisory failing of others in the firm).

                  Moreover, Ferlan settled an action by the Exchange for
                  his failure to supervise Fischer.  Rudolph Louis
                  Ferlan, NYSE Case No. 96-3 (Jan. 23, 1996).  Fischer
                  complains that her sanctions are more severe than those
                  imposed on Ferlan, but, as we have repeatedly held,
                  sanctions in settled cases may well differ from those
                  in litigated cases.  James Alan Schneider, Securities
                  Exchange Act Rel. No. 37463 (July 22, 1996), 62 SEC
                  Docket 1089, 1094.

             [5]:/ Neil C. Sullivan, 51 S.E.C. 974, 976 (1994); Frank J.
                  Custable, 51 S.E.C. 643, 650 (1993).

             [6]:/ The turnover rate is computed by dividing the
                  aggregate amount of purchases in an account by either
                  equity in the account (the equity formula) or by the
                  average monthly investment (the Looper formula).  The
                  Looper formula represents the cumulative total of the
                  net investment at the end of each month, exclusive of
                  loans, divided by the number of months under
                  consideration.  See, Looper & Co., 38 S.E.C. 294, 297
                  n.6 (1958).  The Division's expert testified that the
                  Looper formula is more accurate in the case of GNMAs
                  because determining their price is quite complex.
                  Under the equity formula, which the expert calculated
                  but did not rely on because of pricing difficulties,
                  the turnover rate in the Van Campen account was 23.2
                  and in the Malusa account was 12.3.

             [7]:/ Under the equity formula, the break-even return for
                  Van Campen's account was 202.4% and for the Malusas'
                  account was 115.4%

             [8]:/ See Mihara v. Dean Witter & Co., Inc., 619 F.2d 814,
                  819 (9th Cir. 1980) (where account turned over
                  approximately 14 times in about two years, turnover
                  reflected churning); Frederick C. Heller, 51 S.E.C.
                  275, 277 (1993) (where break-even return was 36%,
                  annualized turnover ratio was 6.4, and investments were
                  held for short periods, broker found to have engaged in
                  excessive activity); Shearson Lehman Hutton Inc., 49
                  S.E.C. 1119, 1122 (1989) (where break-even return was
                  50% and turnover rate was 7.4, broker's trading was
                  excessive); Samuel B. Franklin & Company, 42 S.E.C.
                  325, 330 (1964) (turnover rates of 3.5 and 4.4 are
                  excessive).

             [9]:/ "As we have held, the broker has a duty to satisfy
                  himself that speculative investments are suitable for
                  the customer and that the customer understands and is
                  willing to take the risks."  Donald T. Sheldon, 51
                  S.E.C. 59, 74 n. 59 (1992), aff'd, 45 F.3d 1515 (11th
                  Cir. 1995).  See also, Henry James Faragalli,
                  Securities Exchange Act Rel. No. 37991 (Nov. 26, 1996),
                  63 SEC Docket 847.

             [10]:/ All of the arguments 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 in this opinion.
         



                                  UNITED STATES OF AMERICA
                                         before the
                             SECURITIES AND EXCHANGE COMMISSION

             SECURITIES EXCHANGE ACT OF 1934
             Rel. No. 40335 / August 19, 1998

             Admin. Proc. File No. 3-9346
             __________________________________________________
                                                               :
                  In the Matter of the Application of          :
                                                               :
                       JUSTINE SUSAN FISCHER                   :
                       4400 Calle Del Conde                    :
                         Tucson, AZ 85718                      :
                                                               :
               For Review of Disciplinary Action Taken by the  :
                                                               :
                       NEW YORK STOCK EXCHANGE, INC.           :
             __________________________________________________:

             ORDER SUSTAINING DISCIPLINARY ACTION TAKEN BY NATIONAL
             SECURITIES EXCHANGE

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

                  ORDERED that the disciplinary action taken by the New
             York Stock Exchange, Inc. against Justine Susan Fischer be,
             and it hereby is, sustained.

                  By the Commission.


                  Jonathan G. Katz
                  Secretary