Part of Broad, New Investigation : Ex-President of Haas to Plead Guilty in Stock Manipulation
The 29-year-old former president of a Wall Street securities firm will plead guilty to manipulating stock over a period that included the crash of October 1987, federal prosecutors said Thursday.
Authorities said the plea stems from a broader, previously undisclosed investigation of stock market manipulation that apparently includes other securities firms that collapsed after the 1987 market debacle.
Bruce Baird, head of the securities fraud unit at the U.S. Attorney’s office in Manhattan, said that authorities “had a number of investigations arise out of the market crash,” and that these other probes were continuing. An FBI spokesman said 20 agents are investigating stock manipulation and related matters.
Although part of the crackdown by federal officials on Wall Street corruption, these investigations reportedly are not related to the much-publicized Ivan F. Boesky family of insider trading cases.
Scheduled to plead guilty today in connection with the investigations is Stanley Aslanian Jr., former president of Haas Securities Corp. U.S. Atty. Rudolph Giuliani said Aslanian will admit to one count of conspiracy to commit securities fraud by manipulating stock.
Aslanian also will cooperate with investigators from the Securities and Exchange Commission, the FBI and the U.S. attorney’s office in Manhattan into his firm’s activities. He faces up to five years in prison and $250,000 in fines.
Haas Securities was a 75-year-old firm with 12,000 customers and four offices across the nation, officials said. Giuliani said the company employed more than 100 people. According to the information filed by the government, Haas Securities went out of business Oct. 28, 1987, just two months after Aslanian became head of the firm.
Under court procedure, Aslanian pleaded innocent before a U.S. magistrate Thursday and waived his right to require the government to present his case to a grand jury for possible indictment, said Assistant U.S. Atty. Peter Lieb.
The conspiracy charge arises from an alleged scheme that lasted from June 1985 to November, 1987. The government charges that Aslanian illegally pushed up the price of four securities on the over-the-counter market and later sold the securities at inflated prices.
The government alleges that Aslanian acted as a market maker in the four securities from the spring of 1987 until Haas closed its doors. It was also alleged that Aslanian and his co-conspirators employed a variety of fraudulent and manipulative devices to raise, maintain, and control the price of the manipulated securities.
The stocks involved were TS Industries Inc., Big O Tires Inc. , Flores de New Mexico Inc. and Cliff Engel Ltd.
The government charges that the improper activities included publishing false information about the companies, selling them to investors ill-suited to buy such speculative products and trying to discourage customers from selling the shares back to the firm.
Kalman Gallop, Aslanian’s attorney, said Haas Securities is in Chapter 7 liquidation proceedings in U.S. Bankruptcy Court in Manhattan.
“Millions and millions of dollars” were involved but profits could not be easily determined, Gallop said. Aslanian declined to comment.
