No Current Workers Linked to Probe, American Stores Believes

A spokesman for American Stores said Thursday that the company has no reason to believe that any current employees are the subject of an investigation of insider trading related to its purchase last year of Lucky Stores.

Troy D’Ambrosio said American Stores cooperated with a Securities and Exchange Commission investigation of insider trading that resulted in civil charges against a former Alpha Beta employee and his father. American Stores owns La Habra-based Alpha Beta.

The SEC “is not doing any further investigation at this point, as far as I know,” D’Ambrosio said.

The SEC charged in a civil suit filed Wednesday that David Hellberg learned of American Stores’ plans to buy Lucky Stores while a financial specialist for Alpha Beta and passed the confidential information to his father in March, 1988. The suit, filed in Los Angeles, charges that Gerald Hellberg used the information to gain $328,844 in illegal stock profits.

American Stores purchased Lucky last year for $2.5 billion, although its plans to merge Lucky with Alpha Beta have been stalled in federal court.

David Hellberg’s attorney, Douglas E. Griffith of Salt Lake City, said Thursday that his client voluntarily resigned May 31, 1988, from his job as manager of special projects in the Alpha Beta finance department because of the SEC inquiry.

He said Hellberg, who lived in El Toro last year, now works in the accounting department of an unidentified small company in Salt Lake City.

Griffith said David Hellberg “absolutely” did not tip his father to the planned purchase of Lucky Stores.

Gerald Hellberg, 59, a resident of Salt Lake City, is a retired stockbroker who “always had an interest in food corporations”--particularly after his son got into the business, Griffith said. “He used the brokerage business to follow his investments . . . and obviously did well.”

But “we vigorously deny any disclosure. The whole circumstance is a fluke,” the lawyer said.

David Hellberg, 31, “was extremely loyal and devoted” to American Stores, where he began working as a corporate jet pilot while still a college student, Griffith said.

He resigned from the company because he “hoped the SEC’s interest would subside and that it would be in American’s best interest to step back until (the investigation) had run its course,” Griffith said.

Gerald Hellberg said this week that he believes that the case is without merit and that he will fight the charges. His lawyer declined comment.

Although formal answers to the SEC’s lawsuit are not due for 20 days, Griffith said he is considering asking that the case be moved to Salt Lake City. American Stores is relocating its corporate headquarters from Irvine to Salt Lake City, and Griffith said many of the witnesses are there. The SEC is expected to oppose transferring the case.

The lawsuit asks for the $328,844 in alleged illegal profits, plus civil penalties of up to three times that amount from each defendant.