  We present two newly-discovered, compact elliptical (cE) galaxies, which
exhibit clear evidence of tidal steams, found in a search of SDSS DR7. The
structural parameters of the cEs are derived using GALFIT and give effective
radii < 400 pc. They also possess young to intermediate-age stellar
populations. These two cEs provide direct evidence, a "smoking gun", for the
process of tidal stripping that is believed to be the origin of M32-type
galaxies. Both are found in small group environments with many late-type
galaxies, suggesting that we may be seeing the formation of such galaxies in
dynamically young galaxy groups.
