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June 17, 1972 - Image 3

Resource type:
Michigan Daily, 1972-06-17

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SEC says ITT bosses
broke exchange laws

Securities and E
Commission (SI
International T
Telegraph Corp
two of its topc
terday of viola
securities laws
tion with the di
trust settlemen
government las
The two seni
Associated Press named in the sui
IT T's Howard Aibel ed of selling their

N Y - The after receiving inside informa-
x c h a n g e lion of the antitrust settlement
with the government before it
EC) accused was publicly announced last
elephone & July 31. The SEC said the ex-
(ITT) and ecutives were Howard Aibel,
officers yes- senior vice president and gen-
,ting federal eral counsel y and John Navin,
ting feeral cesporate secrietary and counsef
in conner- for corporate affairs,
sputed anti- According to a suit filed in
it with the federal district court in New
t year. York, the SEC said Aibel on
0o executives June 18, 1971, sold about 2,664
t were accus- shares of his stock in the com-
shares in ITT pany for $163,000. Only one day
earlier, the suit said, IT had
learned from the Justice De-
partment of the proposed anti-
trust settlement.
The suit said that Navin sold
1,500 shares of ITT stock for
about $100,000 on July 16, 1971
while he possessed knowledge of
the proposed Justice Depart-
ment settlement.
The suit said that Hartford
Accident and Indemnity Com-
pany, a wholly owned subsidi-
ary of Hartford Fire Insurance.
Page Three sold between July 22 and July
28. 1971, about 26,000 shares
................................. of ITT stock at prices ranging
from $64.50 to $67. Hartford In-
surance is a subsidiary of ITT.
owf The settlement with the Jus-
tice Departmsent permit ted ITT
to continue to hold Hartford
Fire Insurance, but divest it-
self of other companies.
The SEC also charged in a
suit that ITT, Lazard Freres
ressional dis- Co., ITT's New York investment
on the basis of banker, and Mediobanca, a Mi-
r than area. lan, Italy, "limited company,'
he discrepancy violated registration provisions
between the of the securities law in connec-
hich Sen. Cole- tion with the unregistered dis-
et.> represents tribution of 1.7 million shares
.e and the 27th of ITT preferred stock from
n. James Gray November, 1970, through May
isproportionate of 1971.
The suit seeks to enjoin the
chised 18-20 companies and the two officers
denied repre- from further violations of se-

curity laws. No penalties are
It was the ITT merger with
Hartford Fire Insurance that
figured prominently in the Sen-
ate confirmation hearings this
year for Richard Kleindienst to
be attorney general.
Democrats on the Senate Ju-
diciary Committee said approv-
al of the merger was linked
with an ITT contribution from
an ITT subsidiary for the Re-
publican convention.
The complex arrangement be-
twveen ITT, Lazard Freres and
Mediobanca was detailed in the
14-page complaint. The SEC
traced transactions between the
three firms back to 1969.
According to the suit. ITT, in
proposing to merge in early
1969 with Hartford Fire, sought
to obtain a favorable tax rul-
ing from the Internal Revenue-
.Service. But the suit said in
order to do so ITT had to get
rid of the Hartford stock it
owned before the merger could
take place.
The complaint said ITT went
to Lazard and arranged a deal
to dispose of its Hartford Fire
stock. The suit said Lazard con-
tacted Mediobanca in Italy.
A contract was signed be-
tween ITT and Mediobanca on
Nov. 3, 1969 to dispose of the
InkJune, 1970, the suit said,
ITT offered to exchange one
share of its preferred stock for
each outstanding share of Hart-
ford Fire common stock. As a
result, Mediobanca exchanged
the Hartford Fire shares for 1.7
million shares of preferred stock
issued by ITT, the suit said.
Mediobanca and the Lazard
firm obtained a total fee of $2,-
170,000 for its efforts on behalf
of ITT, the suit said. The SEC
said no registration statement
was on file with the commis-
sion in connection with the sale-
of the ITT preferred stock.

Saturday, June 17, 1972

News Pho te: 764-0552

Court refuses to order n
State Senate elections in'

A lawsuit which would have
forced new State Senate elec-
tions this year was dismissed by
the Michigan Court of Appeals
The complaint, filed by the
N e w Democratic Coalition,
maintains that state senators
should be elected this year from
the new State Senate districts
based on the 1970 census popu-
lation and established by the
May 4 Michigan Supreme
Court apportionment decision
which made large changes in
the boundaries of the present
The plaintiffs main argument
is that the incumbent state
senators represent grossly mal-
apportioned districts.
The court, presided over by
Judges John Lesinski, Jay Gil-
lis and Vincent Brennan did
not state their reasons for dis-
missing the complaint but said
they would issue a detailed
opinion early next week.
Perry Bullard, attorney for
the New Democratic coalition
said he will ask the State Su-
preme Court to reconsider the
case early next week.
The Michigan Supreme Court
had previously declined to hear
the case prior to the Court of
Appeals decision.
Bullard said he may take the
case to the federal district
courts if it is dismissed by the
Supreme Court.
The decision will not effect the
race for State Representative or
the Congressional race in Ann
Arbor's district.
Hullard is a candidate for fh
Democratic nomination for the
State House. The race is for the
seat of incumbent Ray Stoit, a
The congressional race in the
newly apportioned district will
face the winner of the Demo-
cratic primary against incum-
bent Marvin Esch, a Republican,
Chief plaintiff in the case,
filed against Secretary of State
Richard Austin, is Gerald Six-
bey, County Commissioner for
Livingston County.
Sixbey said he thought the
court dodged a decision on the
case. "They were afraid of its
political repercussions in an
election year."

The County Commissioner
said that he thought the people
of Livingston County would not
be fairly represented by the in-
cumbent Senate for the next
two years.
Livingston County is now rep-
resented by State Senator Gor-
don Rockwell.

that state cong
tricts be definedc
population rather
Bullard cited tl
in representation
34th district in wl
man Young (D-D
only 153,156 peopl
district where Se
represents a" d
389.023 people.
Newly enfran
year olds will be

Perry ullard
Two years from now, how-
ever. Rockwell will be repre-
senting a different district
which does not include any part
of Livingston County.
Sixbey said that it would
consequently be difficult to
hold Rockwwell responsible for
his actions in the next two
The complaint is based on the
concept of "one ian--one vote"
representation which requires

sentation in the State Senate
until 1975 unless new state
senate elections are held this
year, he said.
In addition, vacancies must
be filled in special elections
from the new districts, which
would leave some citizens com-
pletely without representation
until 1975.
This is the first suite of its
kind in the state of Michigan
although similar cases in other
states have been reviewed.
Several states have constitu-
tional provisions which 'allow
for special elections after new
Sixbey said that he would
like to see the state legislature
provide for elections after re-
districting but seemed doubt-
ful that the State congress would
pass legislation of that sort.

Summer orie ntat in


Miami prepares 4,000
for convention security
MIAMI BEACH, Fla. t(A-A security force of some 4,000,
including game wardens, is being mustered as city of-
ficials brace themselves for an influx of protesters during
the two national political conventions.
The force is being put together in anticipation of a
crowd that officials estimate could number anywhere
from 50,000 to 250,000 persons.
Gov. Reubin Askew has assigned 3,000 National Guards-
men to be on duty during the Democratic convention which
starts July 10 and the Republican gathering which begins
Aug. 21.
Askew said the guardsmen would be stationed in the
Miami area as part of their normal summer training but
would be "available on short notice in the event they are
'needed to assist law
enforcement personnel as-
Y[JH USE signed to the conventions."
The National Guardsmen will
join a special riot squad of 400
to )Cgll statsestmployes, itncluditng men
ter Commission and the Marine
fall so it should be an option Patrol, already scheduled by
tiost," says Phsil Chersterans Askew to be in Miami Beach for
p leader. convention duty.
oup was pretty popular. It could Police Chief Rock' Pomer-
tree imesover" ads A stines will control the riot squad
d three times oer " adds Ants along with his own 250 Miami
hhman coordinator. Beach policemen and a contin-
I still be urged to choose between gent of 200 men from the Miami
carrots on the "Oasis" (Opinion, police force and the Dade Coun-
Interest Survey) test. But the ty Public Safety Department.
counseling office will no longer Don Pride, Askew's press sec-
nterpret the scores. Instead, the retary, said Friday another 100
l will give the scores to students members of the state Depart-
m. The change was made because nent of Law Enforcement
n't be used in counseling any- would work with the U.S. Sec-
of b usd is conseing ny- retService.
the counselors did not have the. Pride said federal backup
r the technical training needed forces were expected to be
em," says Carol Mills, assistant available.
ntation. The state employes and Psm-

By August 18, more than 3,800 incoming fresh-
men will have learned that the undergraduate
library is called the UGLI, that dorm food is
uniformly nondescript and that the LS&A Bldg.
is the orange one with the clock.
Those freshmen will have experienced that
three-day intensive introduction to the Univer-
sity called Summer Orientation.
This year's program, which begins tomorrow',
will be a little different from past orientations,
X-rays with the necessary "nude scene at the
Health Service" are gone, according to Carol
Health Service" are gone, according to one
orientation leader.
In another departure from the past, one of
the summer groups will live on a coed corridor.
"Coed housing is an option that students can

choose in the
during orienta
orientation grot
"The coed gr.
have been fille
Pobereskin, fres
Freshmen wil
raw and cooked
Atittude and 1
literary college
distribute and i
education schoo
who request the
"the scores wo
more. Many of
background not
to interpret the
director of orie
See 01

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