Centennial Ex-CEO Held for Fraud

The former chief executive of the top-performing New York Stock Exchange company in 1996 was ordered held without bail Friday on charges of insider trading, manipulating his company’s inventory and securities fraud.

Emanuel Pinez, 58, an Israeli citizen who has homes in Canada, Switzerland and suburban Boston, was until Tuesday the head of Centennial Technologies Inc., which saw its stock price increase 450% during the year to reach $58.25.

Before his firing Tuesday, Pinez apparently told the company’s board of directors that he inflated the amount of inventory sold, and he admitted advancing his own money to customers to buy the inventory, the U.S. attorney in Boston said.

The exchange halted trading in the stock of the personal computer card maker Tuesday, shortly before the firm said it had fired Pinez. Company shares have not traded since Monday, when it closed at $16.375.

Analysts expect the stock to open in the single digits when and if trading resumes.

FBI agents arrested Pinez at his Beverly, Mass., home early Friday after the Securities and Exchange Commission filed a complaint alleging he “shorted” his former company.

The federal complaint alleges that Pinez bought and sold more than 4,400 option contracts at a time when he had orchestrated a number of accounting improprieties that were being investigated by the company’s board of directors.

Beginning Feb. 7, Pinez allegedly started buying put options and selling call options to expire on March 21, the complaint said. Call options give an investor the right to buy a stock at a certain price, while put options allow the sale at a certain price.

The SEC said Pinez’s minimum profit on the call options will be $447,500.

U.S. Magistrate Lawrence Cohen ordered Pinez detained, froze his assets and set a hearing date of Tuesday.