SEC Suit Alleges Insider Trading in Pillsbury Deal

The Securities and Exchange Commission sued a Minneapolis lawyer Wednesday, alleging that he traded on inside information on Grand Metropolitan PLC’s takeover of Pillsbury Co. and made about $4.36 million in illegal profits.

The complaint was filed in U.S. District Court in Minnesota and named James O’Hagan, 53, a lawyer who formerly worked for the firm Dorsey & Whitney, which helped represent Grand Metropolitan in the takeover battle.

After bitterly resisting the takeover bid, Pillsbury agreed to be bought by the British food and drink conglomerate in December, 1988 for $5.7 billion.

Pillsbury, based in Minneapolis, is the maker of some of the nation’s best-known food brands, including Green Giant vegetables and Haagen-Dazs ice cream. It also owns the Burger King hamburger chain.

According to the complaint, O’Hagan was a partner at Dorsey and Whitney when he learned of Grand Met’s takeover plans.

O’Hagan needed the funds, in part, to repay about $1 million he had secretly diverted from the trust accounts of another Dorsey & Whitney client, Northrup King Co., Nathan said.

O’Hagan left Dorsey & Whitney, a prestigious 78-year-old Minneapolis firm, in February, 1989.

Robert Struyk, chairman of Dorsey & Whitney, declined comment beyond saying the firm cooperated with the SEC’s investigation.

O’Hagan’s lawyer, Jan Stuurmans, was not immediately available for comment.