Griffin Bell to Assess Blame at E. F. Hutton

The E. F. Hutton investment firm has retained former U.S. Atty. Gen. Griffin B. Bell to determine who should be held responsible for check writing practices that led to Hutton’s recent guilty plea to fraud charges, Hutton’s chairman announced today.

The announcement was made by Robert Fomon, chairman of E. F. Hutton Group Inc., at the company’s annual shareholders meeting.

Hutton Group’s brokerage unit, E. F. Hutton & Co. Inc., pleaded guilty May 2 to charges of mail and wire fraud for writing checks for more than it had on deposit at banks from July, 1980, to early 1982. The government charged that the scheme gave the brokerage house interest-free use of up to $250 million a day.

$2-Million Fine

Under the plea arrangement, the firm paid a $2-million fine, set up an $8-million reserve to reimburse commercial banks that lost money because of its actions and agreed to pay the government’s $750,000 in investigation costs. But the arrangement prompted protests in Congress and elsewhere that no executives had been singled out for responsibility in the case.

Fomon said Bell was asked to conduct a “thorough review of the practices to which the company pleaded guilty, determining how those practices evolved, identifying those individuals who bear personal responsibility and making recommendations with respect to those individuals.”

“I feel that taking this action is the only credible way to deal with the situation,” Fomon said. “E. F. Hutton’s name must continue to be associated with the highest standards of corporate conduct.”

Bell was attorney general from January, 1977, to August, 1979, under President Jimmy Carter. He is currently senior partner of the law firm King & Spalding in Atlanta.