The Nation - News from June 1, 1988

Former Atty. Gen. Griffin B. Bell went on trial in U.S. District Court in Washington as the defendant in a defamation suit filed by John M. Pearce, a former E. F. Hutton branch manager criticized in a report Bell wrote as a private lawyer after Hutton pleaded guilty in a check-kiting scheme. Hutton, which has since merged into Shearson Lehman Hutton, pleaded guilty May 2, 1985, to 2,000 counts of mail and wire fraud arising from the scheme to write checks against funds that had not yet reached company accounts. The brokerage firm was fined $2 million and agreed to reimburse banks that were cheated out of interest Hutton earned in the scheme.