Say Ex-President of Kidder and Two Employees Probed in Boesky ‘Parking’ Case
NEW YORK (AP) _ The government is investigating whether former Kidder Peabody Group Inc. President John T. Roche and two employees of the brokerage participated in an illegal ″stock-parking″ scheme with speculator Ivan F. Boesky, the Wall Street Journal reported today.
Quoting sources it said were familiar with the investigation, the newspaper said both the Securities and Exchange Commission and the U.S. attorney’s office in Manhattan are probing the possible role of Roche, ousted last month as president and chief operating officer in a management shakeup.
The Journal said investigators also are looking at the possible roles of Anthony C. Woodruff, co-head of listed equity trading at Kidder, and Donald V. Little, a salesman in Kidder’s Boston office, who handled Boesky’s account.
One of the most prestigious and oldest investment firms, Kidder agreed to pay $25.29 million to the SEC last week to settle charges of insider trading stemming from a Wall Street corruption scandal that is more than a year old.
Kidder also settled an SEC complaint that it engaged in a scheme with Boesky’s Seemala Corp. to conceal Seemala’s ownership of securities, an illicit activity commonly known as stock parking. Such arrangements can enable investors to accumulate large positions in stock and avoid public disclosure as required by the SEC.
The SEC complaint did not identify any Kidder individuals engaged in the alleged scheme with Boesky, a wealthy stock speculator who paid $100 million to the government in November to settle charges of insider trading. Boesky also has pleaded guilty to a criminal charge.
Kidder officials did not immediately return telephone calls to The Associated Press seeking comment on the Wall Street Journal story. Attorneys for Roche, Woodruff and Little also did not immediately return phone calls.
Deborah Corley, spokeswoman for the U.S. attorney’s office in Manhattan, said she couldn’t comment on the story. Mary McCue, spokeswoman for the SEC in Washington, also declined to comment.
Kidder officials expressed relief last week when the SEC settlement was announced because U.S. Attorney Rudolph W. Giuliani said the firm would not face criminal prosecution.
Giuliani lauded what he called Kidder’s cooperation with investigators, as well as efforts to revamp the management of the firm by parent company General Electric Co., which acquired an 80 percent stake in Kidder last year.