Ten Without Intent

Last year the U.S. Securities and Exchange Commission accused twelve directors, executives and employees of the Texas Gulf Sulphur Co. of using "insiders' " information to their own profit. According to the SEC, the twelve knew about the company's rich new mineral strike near Timmins, Ont., and started buying up stocks before a public announcement was made. Going to court, the SEC demanded among other things that the twelve be required to divest themselves of the Texas Gulf stock, plus any profits that they had picked up as insiders.

Last week New York Federal District Judge Dudley B. Bonsai dismissed the charges against ten of the twelve. Among these were Texas Gulf President Claude Stephens, Executive Vice President Charles Fogarty, and Director Thomas S. Lament, a retired vice chairman of Morgan Guaranty Trust. In an 81-page opinion, Judge Bonsai found that the ten had acted without intent to deceive or defraud anyone. Still standing are charges against Texas Gulf Secretary David Crawford and Richard Clayton, a geophysicist who had helped survey the Timmins ore area. When they bought Texas Gulf stock in April 1964, said the judge, they may have been withholding "material information." Whether they can keep the stock will not be settled, in all likelihood, until after a round of appeals.

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