WASHINGTON — The Securities and Exchange Commission took legal action Wednesday against Allegheny International and three former executives, accusing them of abusing corporate jets and wine and keeping improper records.
The Pittsburgh, Pa., company and two of its former executives, Graemer Hilton and Clayton Sweeney, signed agreements in which they neither confirmed nor denied the SEC's claims, but nonetheless agreed to keep better records.
The other executive, former Allegheny Chairman and Chief Executive Robert Buckley of Sewickley, Pa., has not settled with the SEC, the agency said.
In its court filings and administrative proceedings, the SEC said that Allegheny International failed to keep proper books or maintain an adequate accounting system between 1981 and 1985.
Failed to Maintain Records
The SEC said Allegheny International failed to keep proper records on trips that Buckley, his wife and their children took on company aircraft to family property in Vero Beach, Fla., as well as on trips Buckley's parents made from Vero Beach to Pittsburgh and Chicago several times a year, also in company aircraft.
Other executives used company aircraft to reach vacation homes in New York and New Jersey, but no records of such personal use were kept after mid-1982, the SEC said.
"The aggregate cost to AI of personal flights on AI aircraft appears to have exceeded $25,000 for each year from 1980 through 1985," the SEC said.
In addition, the SEC claimed that Allegheny International--at Buckley's behest--purchased 200 cases of wine worth $60,000 in 1981 and 39 cases worth $53,000 in 1985.
No records were kept showing how the wine was used, the SEC said.
The agency also said Allegheny International paid club dues and provided autos for its executives, but failed to properly reflect such costs in the officers' income statements and did not show whether the expenses were justified.