Frank W. Sharp; Financier in Stock Scandal of 1970s

Frank W. Sharp, the financier at the center of a 1970s stock scandal that was blamed for ruining dozens of political careers, has died at age 87.

Sharp died at his suburban River Oaks home Saturday.

Starting as a developer in the 1930s, Sharp built million-dollar housing that changed the face of Houston. He and his family gave heavily to churches and schools, including Houston Baptist College, and Sharp was showered with honors.

But in 1971, the federal government sued Sharp, who was head of Sharpstown State Bank and a controlling stockholder of National Bankers Life Insurance Co.

The lawsuit claimed that Sharp loaned money on shaky collateral to political officials and others and manipulated stock prices so they could make quick profits in exchange for support on legislation he wanted passed.

The lawsuit prompted a run on the Sharpstown bank by depositors, forcing its closure in what was then the biggest bank failure in Federal Deposit Insurance Corp. history.

Sharp was fined $5,000 and sentenced to three years probation for violating federal banking and securities laws, and the scandal destroyed dozens of political careers.

Although Gov. Preston Smith vetoed the legislation Sharp wanted passed, he was handily defeated in 1972 after it was disclosed that he made $62,500 on the stock deals.

The state Democratic Executive Committee chairman, Elmer Baum, resigned after it was learned that he also profited.

One official estimated that the scandal probably cost more than 50 members of the Legislature their jobs.