Week in Review : BUSINESS : Bank Officials Accused of Stock Manipulation

The Securities and Exchange Commission has sued five officials of the defunct Heritage Bank, alleging that they manipulated its stock for nearly 18 months in 1981 and 1982 in an attempt to artificially inflate its value. The Anaheim bank, once Orange County’s largest independent bank, was seized by the state Banking Department and declared insolvent in March, 1984. It was turned over to the Federal Deposit Insurance Corp. for liquidation.

The SEC suit is one of dozens filed against Heritage and some former officers and directors in recent years. Defendants in the SEC action are the bank’s co-founder and longtime chairman, Douglas A. Patty; former President Herbert Slezinger; former corporate counsel and director Roger Saevig; Helen S. Wilson, who served as assistant corporate secretary, and former director Kenneth Thompson. All five are Orange County residents.

Patty, Wilson and Thompson signed consent agreements, in which they did not admit any wrongdoing but promised not to violate SEC rules in the future. Slezinger and Saevig refused to sign and now appear headed for court.