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Securities Cases Included False Testimony By ‘Expert’

January 23, 1988

ORLANDO, Fla. (AP) _ A man who testified as an ″expert witness″ in several lawsuits against brokerage firms was actually a college dropout who lied about his education and work experience, prosecutors said.

The discovery throws into jeopardy judgments and other rulings made in an undetermined number of cases in which Thomas E. Nix testified on behalf of investors suing their brokers for alleged mismanagement of funds, officials said.

The finding already has resulted in the dismissal of one complaint and formed the basis of an appeal in another case.

Nix has agreed to plead guilty to one count of making false statements in a lawsuit, and could receive up to five years in prison and a $10,000 fine, the U.S. attorney’s office said.

Prosecutors said the Florence, Ala., man lied under oath about having degrees from two universities and experience at several financial institutions when he testified in 1986 in an arbitration hearing involving Dean Witter Reynolds Inc.

Lawyers who hired Nix to testify about financial matters, defense lawyers for securities companies and the U.S. attorney’s office said Thursday they did not know the exact number of cases in which he testified.

Robert Dyer, an Orlando attorney who specializes in suing brokerages, said he used Nix as a witness in four or five cases. He said he knows of at least two other lawyers who used him. In one case, he said, the testimony resulted in a damage award of $800,000.

″In all honesty, the factual basis of the testimony there was nothing wrong with,″ Dyer said. ″It’s peculiar. Why would someone lie about their credentials?″

The U.S. attorney’s complaint charged that Nix falsely testified he had a bachelor’s degree in finance from the University of Alabama and a bachelor’s degree in accounting from Columbia University.

He also falsely testified he was employed with the International Investment Group, with Lloyd’s of London and with St. Paul Fire and Marine Insurance Co., the complaint said.

Dyer said that Nix, who is in his mid-20s, actually attended the University of Alabama engineering school for three years but did not graduate.

Because of Nix’ false testimony, Dean Witter is appealing a $177,000 damage award made to James and Beverly Bonar of Orlando after a suit in which Nix took the stand.

In addition, an arbitrator dismissed a complaint against A.G. Edwards & Sons Inc. learned of the false testimony. The dismissal is being appealed.

Nix’s lawyer, William Sheaffer, did not immediately return a telephone call Friday seeking further comment. Nix’s telephone number is unlisted.

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