SECURITIES AND EXCHANGE COMMISSION
                                   Washington, D.C.


          SECURITIES EXCHANGE ACT OF 1934
          Rel. No. 40663 / November 12, 1998

          Admin. Proc. File No. 3-9389

                                                            :
               In the Matter of the Application of          :
                                                            :
                    SHAMROCK PARTNERS, LTD.                 :
                    111 Veterans Square                     :
                    Media, Pennsylvania  19063              :
                                                            :
                              and                           :
                                                            :
                         JAMES T. KELLY                     :
                                                            :
          For Review of Disciplinary Action Taken by the    :
                                                            :
          NATIONAL ASSOCIATION OF SECURITIES DEALERS, INC.  :
                                                            :

          OPINION OF THE COMMISSION

               REGISTERED SECURITIES ASSOCIATION -- REVIEW OF DISCIPLINARY
          PROCEEDINGS

                    Violations of Rules of Fair Practice

               Member firm of registered securities association and its
               president and general securities principal charged excessive
               markdowns in purchasing securities from a retail customer.
               Held, association's findings of violation and the sanctions
               it imposed sustained in part and modified in part.

          APPEARANCES:

               Harley W. Shaver, Shaver & Licht, for Shamrock Partners,
          Ltd. and James T. Kelly.

               Alden Adkins, Norman Sue, Jr., and Francine Norz Tobin for
          NASD Regulation, Inc.

          Appeal Filed:  September 3, 1997
          Last Brief Filed:  December 11, 1997

                                          I.

               Shamrock Partners, Ltd. ("Shamrock"), a member of the
          National Association of Securities Dealers, Inc. ("NASD") and
          James T. Kelly, at all relevant times president and general
          securities principal of Shamrock, appeal from NASD disciplinary
          action.  The NASD found that Shamrock and Kelly violated Article
          III, Sections 1 and 4 of the NASD Rules of Fair Practice
          (recodified as Rules 2110 and 2440) by effecting, in a principal
          capacity, five purchases of Stylex Homes, Inc. ("Stylex") common
          stock from two customers at prices that were not fair and
          reasonable.  The NASD censured Shamrock and Kelly, fined them
          $15,000 jointly and severally, assessed hearing costs jointly and
          severally, and required restitution jointly and severally to two
          customers of $10,674.22.  We base our findings on an independent
          review of the record.

                                         II.

               In October 1992, Robert C. Hackney and Ron Hayes, Sr., who
          were both promoters of Stylex, contacted Shamrock's Florida
          branch office to determine if Ron Hayes, Jr., a registered
          representative at that office and the son of Ron Hayes Sr., could
          sell on their behalf shares of Stylex common stock.  Art Ring,
          manager of the Florida branch, referred Hackney and Hayes Sr. to
          Kelly in Shamrock's Pennsylvania office.  Hackney informed Kelly
          that Merrill Lynch had quoted him a price of $.75 per share, less
          $.07 per share commission, for their block of Stylex stock.

               Kelly contacted Stylex market makers and confirmed that the
          then-current best bid quotation was $.75.  He also asserts that
          he was told that, while trading volume was light, there recently
          had been more buyers than sellers.  Kelly testified that he
          agreed to "stop" Hayes Sr.'s and Hackney's orders; that is, he
          agreed that Shamrock would pay Hayes Sr. and Hackney a minimum of
          $.75 per share.  Kelly stated that he was willing to "stop" the
          order at $.75 because he wanted to obtain more business from
          Hayes Sr. in the future.  Although he claims that Shamrock was
          acting as a principal, Kelly further testified that he told
          Hackney and Hayes Sr. that, if they were willing to wait,
          Shamrock could probably sell the shares over the next few weeks
          for $1 per share or more.

               Following their conversations, Hackney sent Hayes Jr. a
          letter, which stated:

               This letter is to confirm that I will be sending you my
               certificate for 40,000 shares of Stylex Homes, Inc. common
               stock and have asked you to arrange the sale of the shares
               at $1.00 per share.  I also agree to pay Shamrock Partners,
               Ltd. a commission of $.05 per share sold.  Thank you for
               assisting me in this transaction.  I look forward to working
               with you on this and future transactions.

          Although Hackney's letter makes no reference to the "stop," Kelly
          testified that he understood that "I stopped him at 75 cents, and
          I was working the order at a dollar or better."

               On October 26, 1992, Shamrock purchased Stylex stock from
          Hayes Sr.  Between November 4 and November 11, 1992, Shamrock
          made four additional purchases of Stylex stock from Hackney.
          Shamrock then executed six sales of Stylex to Paragon, another
          broker-dealer, for prices ranging from $1.21875 to $2.000 per
          share.  Shamrock's purchases from Hackney and Hayes Sr. resulted
          in markdowns ranging from 11.8% to 37.5%. [1]  The transactions
          occurred as follows:

           -----------------------------------------------------------------
           |Date     |No.    |Purchase    |Sale        |Total      |% mark-|
           |Bought   |Shares |Price       |price [2]   |Profit     |down   |
           -----------------------------------------------------------------
           |Oct. 26  | 7,500 |$1.125      |$1.21875    |  $621.09  |11.8%  |
           -----------------------------------------------------------------
           |Nov. 4   | 2,500 |$1.250      |$1.875      |$1,328.13  |33.3%  |
           -----------------------------------------------------------------
           |Nov. 5   | 2,500 |$1.250      |$1.875      |$1,328.13  |33.3%  |
           -----------------------------------------------------------------
           |Nov. 9   | 1,000 |$1.250      |$2.000      |  $650.00  |37.5%  |
           -----------------------------------------------------------------
           |Nov. 11  |12,700 |$1.250      |$1.875      |$6,746.88  |33.3%  |
           -----------------------------------------------------------------
           |Total    |26,200 |            |            |$10,674.22 |       |
           -----------------------------------------------------------------

                                         III.

               Rule 2440 requires NASD member firms to buy or sell
          securities at a price that is fair, taking into consideration all
          relevant circumstances.  A transaction for a customer must be at
          a price reasonably related to the security's market price.
          Markdowns on equity securities exceeding five percent of the
          prevailing market price are generally viewed as excessive and
          violative of Rules 2110 and 2440. [3]  Markdowns that are less
          than five percent may also be considered excessive. [4]
          Markdowns are generally smaller than markups. [5]  As we have
          repeatedly stated, the best evidence of the prevailing market
          price is the price that dealers pay one another in arms-length
          transactions. [6]

               A.   Applicants admit that, prior to October 18 and after
          December 4, 1992, Shamrock was not a market maker in Stylex.
          Nevertheless, applicants contend that Shamrock was an
          "unpublished" market maker in Stylex between October 18 and
          December 4, 1992, when the transactions at issue occurred and
          thus was permitted to base Shamrock's purchase prices on bid
          quotations.

               Section 3(a)(38) of the Securities Exchange Act of 1934, 15
          U.S.C. 78c(a)(38), defines a market maker as "any dealer who,
          with respect to a security, holds himself out (by entering
          quotations in an inter-dealer communications system or otherwise)
          as being willing to buy and sell for his own account on a regular
          or continuous basis."  We do not find persuasive the claim that
          Shamrock was a market maker in Stylex stock during the period in
          which it sold shares for Hackney and Hayes Sr.

               Shamrock was not listed in the National Quotation Bureau
          Pink Sheets as a market maker for Stylex, and it did not enter
          quotations on the Bulletin Board for Stylex.  Kelly claims that
          he told certain dealers that Shamrock was a market maker in
          Stylex.  This statement by itself would not be sufficient to make
          Shamrock a market maker.  We have previously stated, "to be
          treated as a market maker, a dealer must, among other things,
          advertise its willingness to buy and sell securities for its own
          account and stand ready to buy and sell to other dealers at its
          quoted prices. [7]
                
                Shamrock, however, was not active in the inter-dealer
          market for Stylex on a regular and continuous basis.  Shamrock's
          transactions consisted solely of purchasing a block of stock from
          retail customers to dispose of the stock in the inter-dealer
          market.  Kelly admitted that, while he provided quotes to any
          market maker who contacted him, he did not buy any stock and
          would have told any market makers who offered him stock that he
          was not interested at the time.  Kelly asserts, however, that his
          lack of purchases is not dispositive of whether Shamrock was a
          market maker.  He asserts that he did not buy any Stylex shares
          because he already had 40,000 shares in inventory.  Indeed, Kelly
          admitted that he did not want to indicate interest in Stylex for
          fear of "spooking" the price.  Showing an interest in a stock,
          however, and being ready to buy or sell at any time, is the role
          of a market maker.

               The NASD properly calculated the markdowns on these
          transactions based on Shamrock's contemporaneous sales to
          Paragon.  Contrary to applicants' assertions, Shamrock was not
          entitled to rely on bid quotations as evidence of prevailing
          market price.  Where a dealer is not a market maker, the best
          evidence of the prevailing market price in computing markdowns is
          the dealer's contemporaneous proceeds from its sale. [8]

               B.   Even if a dealer is a market maker, it cannot base its
          retail markdowns on bid quotations unless the reliability of
          those quotations can be validated by comparing them with actual
          inter-dealer transactions in an active, independent market. [9]
          Kelly admitted that the market in Stylex was extremely thin and
          that volume was light.  Moreover, Shamrock's transactions at
          issue confirm that bid quotations for Stylex were unreliable
          measures of prevailing market price.  Although Paragon
          disseminated bid quotations ranging from $.75 to $1.375 (and
          other Stylex market makers were quoting bids ranging from $.75 to
          $1.25), Paragon nonetheless bought Stylex from Shamrock at prices
          ranging from $1.218 to $2.00, prices that were close to Paragon's
          ask quotation.  Therefore, Shamrock had evidence that the
          quotations on which applicants purported to rely in determining
          the prices paid to Hackney and Hayes Sr. were subject to
          negotiation. [10]

               Applicants also argue that Hackney and Hayes Sr. received a
          price equal to the best bid quotation available, which applicants
          assert was a much better price than they would have received
          elsewhere.  Applicants argue that, if they had tried to sell the
          entire block of shares, or even a block of 10-15,000 shares on an
          agency basis, it would have dramatically lowered the price
          because the shares were thinly traded.  They do not explain,
          however, why they could not do on an agency basis what they did
          in these transactions:  sell portions of the block to a market
          maker at these prices.

               C.   Respondents argue that all of Shamrock's transactions
          in Stylex for Hayes Sr. and Hackney -- not just the transactions
          at issue here -- should be combined for the purpose of
          determining whether there were excessive markdowns because the
          different sales to Paragon "are all part of the executions on one
          agreement."  We have held, however, that "[t]ransactions
          occurring over a period of time cannot be lumped together for the
          purpose of determining whether markdowns or markups are
          fair." [11]  The transactions here occurred over several weeks.
          The NASD correctly calculated the trades based on the closest
          individual contemporaneous transactions.

               D.   We do not find persuasive applicants' argument that
          Shamrock could charge high markdowns because it was "at risk" of
          loss.  We understand applicants to assert that they had assumed
          the risk of a market decline because Kelly had agreed to "stop"
          Hayes Sr.'s and Hackney's orders at $.75.  Kelly, however,
          testified that he was willing to "stop" the order because he
          wanted to attract future business from Hayes Sr.  His desire to
          attract new business does not justify excessive markdowns.
          Moreover, we question the degree to which Shamrock was at risk.
          Shamrock generally was able to sell the shares of Stylex
          contemporaneously with its purchases.  But, even if Shamrock had
          been at risk, we have held that a dealer is not entitled to
          charge excessive prices because it is at risk. [12]

               E.   Shamrock and Kelly argue that these trades were
          negotiated with Hackney and Hayes Sr. and that full disclosure
          was made to these customers.  The NASD Mark-Up Policy states that
          disclosure is a "factor to be considered" in determining the
          fairness of a markdown. [13]

               Thus, Kelly and Shamrock argue that Hayes Jr. fully
          disclosed the markdown to his father, Hayes Sr., and Hayes Sr.
          consented to it.  Shamrock and Kelly introduced an unsworn
          written statement from Hayes Sr., in which Hayes Sr. states that
          he was informed of a 3/32 markdown plus a $375 commission on his
          sale of $7500 and that he consented to that price.  We also note
          that the markdown on the transaction for Hayes Sr., 11.8 percent,
          was much lower than the markdowns on the purchases from Hackney.
          Hayes Sr. was a promoter of the stock.  He agreed not only to a
          markdown but also to a commission in a sale that benefitted his
          son.  Under these extraordinary circumstances, given the family
          relationship between the two Hayes, Hayes Sr.'s status as a
          promoter, and his statement that he was aware of and consented to
          the markdown, the record does not support a finding of violation
          with regard to the markdown on Hayes Sr.'s shares.

               In contrast, we find that the alleged disclosure to Hackney
          was inadequate.  Kelly claims that Ring and Hayes Jr. told
          Hackney about the prices that Shamrock received for the stock
          Hackney sold to Shamrock.  The record here, however, does not
          demonstrate whether the disclosure to Hackney was full and fair.
          Kelly has provided no evidence of how or when disclosure was made
          to Hackney, nor did Kelly indicate at the hearing before the NASD
          what precisely Hackney was told.  Kelly did not explain how he,
          located in Pennsylvania, could know what Ring and Hayes Jr.,
          located in Florida, told Hackney.  Neither Ring nor Hayes Jr.
          testified.  Thus, we cannot conclude that Hackney was informed of
          or consented to the markdowns.

               F.   Kelly contends that he should not be held responsible
          for any violations because he asserts that he did not personally
          receive the commissions, Hackney and Hayes Sr. were not his
          clients, and he did not even execute most of the trades.  Kelly,
          however, was the president of Shamrock, the principal in charge
          of trading at Shamrock, and one of two principals responsible for
          the establishment and enforcement of the firm's markdown policy.
          He testified that he negotiated the transactions with Hackney.
          He was aware of all of the trades at issue, wrote the trade
          tickets, and executed some of the trades.  He therefore bears
          responsibility for the conduct at issue. [14]

                         *         *         *         *

               We conclude that applicants violated Rules 2110 and 2440
          with respect to the four transactions between the Firm and
          Hackney.

                                         IV.

               Applicants argue that the NASD violated their due process
          rights by delaying the institution of this proceeding until three
          years and four months after the violative conduct occurred.  They
          assert that they could no longer obtain exculpatory
          evidence. [15]  Specifically, Shamrock and Kelly claim that,
          while the NASD collected "blue sheet" information [16] on other
          stocks traded by Shamrock, it failed to collect similar
          information for Stylex.  Shamrock and Kelly argue that they could
          have used such evidence to show that Shamrock's contemporaneous
          sales of Stylex stock to Paragon were not the best measure of
          prevailing market price.  Applicants do not cite any basis for
          believing that other inter-dealer transactions in Stylex were
          effected at different prices.  Moreover, there is nothing in the
          record to indicate that Shamrock or Kelly ever asked the NASD to
          "blue sheet" Stylex.  Nor did they ever ask for the blue sheet
          information the NASD had collected on other shares traded by
          Shamrock. [17]

                                          V.

               Shamrock and Kelly challenge that part of the sanction
          requiring that they pay restitution.  They argue that restitution
          is inappropriate because Kelly did not profit from the
          transactions.  Moreover, they claim that Shamrock lost $3,759.82
          on remaining shares from Hackney's block of shares, which
          subsequently became worthless.  They claim that restitution to
          Hackney therefore would be unfair.

               We do not find the sanction of restitution excessive or
          oppressive.  Shamrock and Kelly did not pay Hackney an adequate
          price in the four transactions at issue here.  This is a serious
          breach of the firm's obligation to deal fairly with investors.
          The fact that the firm lost money on subsequent transactions does
          not change the unfairness of the markdowns here.  Restitution is
          an appropriate sanction in a markup or markdown case, and we
          believe it is appropriate here to make the customer whole. [18]
          Based on our finding that the markdown on the trade for Hayes Sr.
          was not violative, we reduce the restitution to $10,053.13.


          **FOOTNOTES**

          [1]: The NASD did not allege that subsequent Shamrock purchases
               of the remainder of the 40,000 Stylex shares were violative.

          [2]: The sales occurred either the same day that Shamrock purchased 
               the shares or within four days of the purchase.  We have 
               calculated the markdowns based on contemporaneous inter-dealer 
               trades between Shamrock and market maker Paragon.

          [3]: Hamilton Bohner, Inc., 50 S.E.C. 125, 128 (1989).  See also,
               NASD Mark-Up Policy (now designated as IM-2440).

          [4]: Hamilton Bohner at 128.

          [5]: D.E. Wine Investments, Inc., Securities Exchange Act
               Rel. No. 39517 (January 6, 1998), 66 SEC Docket 763, 766.

          [6]: Adams Securities, Inc., 51 S.E.C. 1092, 1094 (1994) and
               cases cited therein.

          [7]: Sacks Investment Company, Inc., Securities Exchange Act
               Rel. No. 32436 (June 9, 1993), 54 SEC Docket 784, 788.  Even
               being listed as market maker in a quotation medium (which
               Shamrock was not) is not determinative.  Network 1 Financial
               Services, Inc., Securities Exchange Act Rel. No. 34930 (Nov.
               3, 1994), 57 SEC Docket 2824 (where firm listed itself on
               the pink sheets for stock but did not publish quotations for
               the subject stock and only occasionally provided quotations
               to other dealers, firm was not a market maker in subject
               stock).

          [8]: Century Capital Corp., 50 S.E.C. 1280, aff'd, 22 F.3d
               1184 (D.C. Cir. 1992)(Table).  See also Bison Securities,
               Inc., 51 S.E.C. 327, 331 n.15 (1993) ("quotations,
               particularly in low-priced, thinly traded securities . . .
               are an extremely flawed measure of price.")

          [9]: R.B. Webster Investments, Inc., Securities Exchange Act
               Rel. No. 35754 (May 23, 1995), 59 SEC Docket 1194; Orkin v.
               SEC, 31 F.3d 1056, 1064 (11th Cir. 1994).

          [10]:See Kenneth L. Lucas, Securities Exchange Act Rel. No.
               33922 (April 19, 1994), 56 SEC Docket 1482 (where broker
               sold shares to customers at $.07 but sold the same shares to
               dealers at $.05 or less and where broker was able to buy at
               $.03, quotations were subject to negotiation and were not a
               reliable indicator of market price).

          [11]:Hamilton Bohner, Inc., 50 S.E.C. at 128.

          [12]:See James E. Ryan, 47 S.E.C. 759 (1982) (broker-dealer
               not entitled to charge customers excessive markups simply
               because it is in a risk position).

          [13]:NASD Mark-Up Policy (now designated as IM-2440).

          [14]:See Michael H. Novick, 51 S.E.C. 1258 (1994) (where
               president responsible for firm's retail pricing and for
               reviewing trade tickets, liable for unfair markups).

          [15]:To the extent applicants are arguing that the delay in
               bringing these proceedings is itself a violation of due
               process, this argument fails.  Frederick C. Heller, 51
               S.E.C. 275, 280 (1993) (no statute of limitations applies to
               the issuance of complaints by the NASD).  The five-year
               statute of limitations discussed in SEC v. Johnson, 87 F.3d
               484 (D.C. Cir. 1996), reh'g denied (August 28, 1996), does
               not apply to NASD proceedings.  Many courts and this
               Commission have determined that SROs are not subject to the
               requirements applicable to a government agency.  See, e.g.,
               Shultz v. SEC, 614 F.2d 561, 569 (7th Cir. 1980) (Chicago
               Board Options Exchange not "authority of the government" and
               thus not governed by the Administrative Procedure Act);
               Larry Ira Klein, Securities Exchange Act Rel. No. 37835
               (October 17, 1996), 63 SEC Docket 70.  Cf., Henry James
               Faragalli, Jr., Securities Exchange Act Rel. No. 37991
               (November 26, 1996), 63 SEC Docket 826 (three-year statute
               of limitations announced by the Supreme Court in Lampf v.
               Gilbertson, 501 U.S. 350 (1991), inapplicable to SRO
               proceedings).

           [16]:"Blue sheets" consist of information from broker-
                dealers, generally market makers, including the firm's
                inter-dealer and agency trades in a subject security by
                date, price, size and contra-party.  Escalator Securities,
                Inc., Securities Exchange Act Rel. No. 37601 (Aug. 26,
                1996), 62 SEC Docket 1927, 1929 n.4.

           [17]:Applicants also argue that the NASD violated their due
               process rights by delaying the case until after the normal
               record-keeping requirements had passed so that Applicants
               could no longer obtain the price information themselves.
               Applicants are in error.  17 C.F.R. 240.17a-4(a)(1)
               requires member firms to preserve information on the
               purchases and sales of securities for six years.

           [18]:R.B. Webster Investments, Inc., 59 SEC Docket at 1204.
                We also do not find the amount of the fine -- $15,000 --
                excessive or oppressive.  The NASD Sanction Guidelines 
                recommend a fine of the gross amount of the excessive 
                markdown plus $5,000
                to $50,000. [19]

               An appropriate order will issue. [20]

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






          Jonathan G. Katz
          Secretary

          **FOOTNOTES**

               [19]:NASD Sanction Guidelines at 28 (1993).

               [20]: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.

                               UNITED STATES OF AMERICA
                                      before the
                          SECURITIES AND EXCHANGE COMMISSION

          SECURITIES EXCHANGE ACT OF 1934
          Rel. No. 40663 / November 12, 1998

          Admin. Proc. File No. 3-9389

                                                            :
               In the Matter of the Application of          :
                                                            :
                    SHAMROCK PARTNERS, LTD.                 :
                    111 Veterans Square                     :
                    Media, Pennsylvania  19063              :
                                                            :
                              and                           :
                                                            :
                         JAMES T. KELLY                     :
                                                            :
          For Review of Disciplinary Action Taken by the    :
                                                            :
          NATIONAL ASSOCIATION OF SECURITIES DEALERS, INC.  :
                                                            :

          ORDER SUSTAINING DISCIPLINARY ACTION TAKEN BY REGISTERED
          SECURITIES ASSOCIATION


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

               ORDERED that the disciplinary action taken by the National
          Association of Securities Dealers, Inc. against Shamrock
          Partners, Ltd. and James T. Kelly, be, and it hereby is,
          sustained, except that the amount of restitution is reduced to
          $10,053.13.

               By the Commission.



               Jonathan G. Katz
               Secretary