Sierracin Corp. said Friday that the Securities and Exchange Commission has ended a nearly two-year investigation of the Sylmar firm and will not recommend that any kind of enforcement action be taken against it or its employees.
The SEC refused to confirm or deny Sierracin’s statement. But Gerald Boltz, Sierracin’s lawyer, said Friday that he had received a letter signed by SEC attorney Peter Badow in Los Angeles saying that the investigation “has been terminated and . . . no enforcement action has been recommended to the commission.”
The aerospace concern publicly reported in January, 1987, that the SEC was probing some its activities in the 1983-86 period. Sources close to the investigation said the agency was looking into possible stock manipulation, the alleged misuse of company money by Chairman Christoph Tribull and other charges.
Tribull in the past four years has been accused in civil lawsuits of fraud, extravagant spending of company funds, trying to manipulate the price of the company’s stock and making death threats against company officials. The lawsuits, all but one of which have been settled, were filed by former company officials and investors.
The remaining suit was filed in July by shareholders Herbert and Euretta Hastings, who as a couple are the company’s second-largest shareholder. The suit was filed in Delaware, where Sierracin is legally registered as a corporation.
Charges in Suit
The Hastingses said in the suit that the Sierracin case is “one of the most egregious examples in the history of Delaware corporations of fraud, mismanagement and self-dealing by a board of directors, in particular its chairman.”
Specifically, the suit alleges that Tribull and three board members used Sierracin’s assets for their own financial gain. The Hastingses said in their suit that Tribull and other directors “obtained literally millions of dollars of unreasonable and excessive compensation . . . and hundreds of thousands of dollars for payment of personal and so-called business expenses.”
Boltz said: “The company has filed denials to all of these allegations. They are without merit and are outrageous.”
The Hastingses’ attorney, Paul Smith, refused to say what impact, if any, the close of the SEC investigation would have on his clients’ lawsuit. “I prefer not to comment,” he said.
Sierracin makes aircraft-cockpit windshields, motors, heaters and electric components. For the first six months of 1988, the company reported a $951,000 profit and revenue of $39.5 million.
Sierracin’s stock, which is traded over the counter, closed unchanged Friday at $7.38 per share.