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SEC Settles With Inside Trading Informer : Former Boesky Accountant Barred From Securities Trade for a Year

September 24, 1987|MICHAEL A. HILTZIK | Times Staff Writer

NEW YORK — Setrag Mooradian, a former accountant for Ivan F. Boesky who has given significant information to federal probers investigating illicit stock trading schemes, has settled charges that he helped Boesky break securities laws, the Securities and Exchange Commission said Wednesday.

Under the terms of the settlement, Mooradian--who was a vice president for Boesky's Seemala Corp.--will be barred for a year from the securities industry but will not be required to pay a fine or penalty.

Sources said that in return for cooperating with authorities, Mooradian also has been granted immunity from criminal prosecution for his activities as a Boesky associate.

Mooradian's lawyer, Robert M. Romano of the firm of Morgan, Lewis & Bockius, declined to comment.

Mooradian was specifically charged with "aiding and abetting" Boesky's 1984 "parking" of stock of Fischbach Corp., an electrical contracting company being pursued by financier Victor Posner. Federal prosecutors are investigating whether Boesky, Posner and the investment firm of Drexel Burnham Lambert--which had business relationships with both men--conspired illegally so that Posner could acquire Fischbach.

Other Investigations Pending

Boesky has pleaded guilty to a single felony count of illegally holding Fischbach stock in his own accounts on behalf of unnamed "conspirators."

According to SEC documents and sources familiar with the probe, Mooradian knew of the secret agreements through which Boesky held Fischbach stock and falsified Seemala records to hide the truth.

Mooradian was spared a fine in this case, sources said, because he is cooperating with authorities and because "he didn't make any money from any misbehavior."

Boesky is the former stock speculator who agreed in November, 1986, to pay $100 million to settle SEC insider trading charges and this year pleaded guilty to the lone felony count. He has not yet been sentenced.

Information provided by Boesky has led directly to civil and criminal charges against many other prominent Wall Street figures, including former investment banker Martin A. Siegel and former stockbroker Boyd L. Jefferies.

Several other related federal investigations are still under way. Among the targets are Drexel Burnham Lambert; Michael Milken, one of Drexel's leading officers, and Jamie Securities, an influential trading firm run by John Mulheren, a well-known stock arbitrageur. No civil or criminal charges have been brought against any of them, however.

Sources close to the federal investigation said Mooradian has been helpful to probers looking into illegal "parking." Through these arrangements, Boesky and co-conspirators secretly held stock in certain companies on each others' behalf. This allowed them to circumvent federal regulations restricting their total stock holdings to a given multiple of their total net worth. They could also evade securities laws requiring them to disclose their holdings once they exceed 5% of a company's outstanding stock.

Mooradian was aware of some of these arrangements and falsified records reflecting the Boesky firm's actual stock trading. Among the cases in which his information may have been helpful, sources said, is an SEC charge settled by the firm of Kidder, Peabody & Co. in June alleging that Kidder parked stock for Boesky beginning in December, 1984. He may also have provided information to investigators looking into Drexel and Jamie transactions, sources said.

Mooradian's cooperation with federal investigators was first reported by The Times in March.

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