JUDGE ASSERTS CASEY, C.I.A. CHIEF, MISLED STOCK BUYERS IN '68

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP90-00806R000100670062-9
• Release Decision: RIPPUB
• Original Classification: K
• Document Page Count: 1
• Document Creation Date: December 22, 2016
• Document Release Date: September 8, 2010
• Sequence Number: 62
• Publication Date: July 15, 1981
• Content Type: OPEN SOURCE

Sanitized Copy Approved for Release 2010/09/08: CIA-RDP90-00
ARTICLE AFPEKR.ED 1117-4 YORK TIMES
ON PAGE-/
15 JULY 1901
Casey"' Casey had done nothing wrong.,.- ( leans industrialist; Lawrence F. Orbe
Judge Asserts ~ The kind of suit in which Mr. Casey is 3d, a New Orleans investm,aant banker;
a defendant is a common action by in- and James H. Swinny, a Natchez bust.
, '? vestors against officers of a barkCriot nessman. All are defendants in the law.
company: This is your garden-van iety suit.
? V8. lawsuit that any b'tsinessman-lawyer After incorporation in 1W. the com-
Stock Buyers in 'm ght run into in the course of `tis ca-
b' pang made a private Investreit offer
"
s
id W
ll
L
By PAUL L MONTGOMERY:.
reer,
a
ace
a
. -Timmeny, who 1, ing of 35,000 units consisting of alCO ca
has handled similar cases for the Wash- value subordinated debentures shay-
Irgton law firm of lautak, Rock & HWe* of common stock and warrants to pur-'
"That is absolutely it."
h
dditi
l
c
ase a
ona
shares In 1 ad
.n William J. Casey; the Director of Cen- Multiponics, formerly called Ivanhoe again in 1370, the comnaay registered a I
t:ai intelligence, ,knowingly .particiAssociates,; was incorporated in Iola- public offering of stock,with the Securi_i
paled with several others in an invest- ware in 1968. It consisted of 43,000 acres ties and Exchange
meat offering for alarming comp of soybean, headed, the off wring
~ m an, rice, cotton and corn lard in lye, Casey then hedbut but L':e erinp
? 8 that "omitted and misrepresented Louisiana,. Mississippi, Arkansas. and was never a~?-IIy made and the corn-! I to, irvestors, accordingto.aFed- Florida assembled by the company's pany? soon; insolvent. it is the
oral District . Court decision ;handgd founders, including Mr.'Casey. Among difference between the language of the
down in May. i the other founders were Stanley E. private offering and the
{t prcposed the public
Barkley of Natchez, Miss.; N. Leslie Offerin ghat
$ that forms much of the dispute-
The ruling on May,;19 by Judge ,.Cater an investment banker f
o
r
m
, Charles.E. Stewart Jr.. of the,Federal ?Natchez; Alfred J. Moran, a New Or-
IDistrictCourtin Manhattan named Mr. '
Casey, as one of the officers and promot-
ers of Multiponics Inc. who wasrespon-
s; ole for the misleading oftering."'Mr. .
Casey was thenka; private lawyer-.and
was listed as the_secretaryand a~direc-
tor of the. company. The company went-,
into bankruptcy proceedings In 1971and
is now defunct.
Judge Stewart's decision,, which was
based on documents and admissions by
the defendants, including Mr:'..Casey,
was part of a drawn-out lawsuit in which
disgruntled Investors are seeking to re-
coup their losses. Many other issues in
the case, including damages, remain to
be litigated, and Mr:, Casey's- -lawyers
are seekinga reargument of the portion
decided by Judge Stewart."`
One of Mr. Casey's lawyers;-Arnold S.
Jacobs of the firm of Shea & Gould; said
"taking
yesterday that his client was
the position that, he'did not, violate the
Federal security. law." ':.
"Mr., Casey, was a passive?investor"
who was: notsdirectly ?urvolved:?,iri the
management of-the company; said Mr.
Jacobs. ?.'He?lost-a lot of money- in the
company, virtually,, all of; his. invest-
ment." Mr. Jacobs-is representing Mr.
Casey with Milton Gould, the firm's sen-
ior
A spokesman !or the~C.L`A. said that
Mr. Casey had no_cornmenton the case.
Mr. Casey's involvement with Multi-'
ponics and the subsequent lawsuit came
up in 1973 in Senate confirmation hear-
ings on his appointment as Under Secre-
tary of State for Economic Affairs. Mr.
Casey, then chairman of the Securities
and Exchange Commission; denied
wrongdoing and said, "It's a question of
a business decision." Senator Jacob K.
Javits said later he was satisfied Mr.
under which Multiponics acquired the
farms from Its founders. The private of-
faring did not mention that the company
had taken over the mortgages of the
farms, creating considerable built-in in-
debtedness. This was acknowledged in
theproposed publicofferings.
Mr. Casey, 'according to the court
papers, was part. owner of three of the
seven farms when they were sold to Mai-
tiponics, and received Multiponics so.
curitles in exchange. According to the
records, he invested $143,614.in the land,
the largest single Investment among the
founders, and . Multiponics ? assumed
$301,000 in mortgages while issuing him
65,973 shares of stock.-. , . ,, ,
After reviewing' the evidence, Judge
Stewartconcluded.-.?-...
In sum; there is no genuine issue of
material fact that, the_offeriag state-
:ment omitted and misrepresented facts
that wou 4 have been material to area
,sonable c investor.:: _ in . - determining
-whether to ? purchase . Multiponics
stock."
According to Judger Stewart's ruling,
there were several important omissions
or mistatements in the private offering,
later corrected in, the public offering.
The private offering Implied that the
seven farms that made up Mulltiponics
were operating and profitable, whereas
the later statement acknowledged that
two farms 'Were not operating at.the
time they were acquired, two were only
being sharecropped, and a fifth was op..
erasing at a loss.
An omission cited by the judge In the
original offering concerned the terms
Sanitized Copy Approved for Release 2010/09/08: CIA-RDP90-00806R000100670062-9