Lamont Says SEC's Charge Is Unfounded
Thomas S. Lamont '21, Fellow of Harvard College, last week formally denied charges by the Securities and Exchange Commission that he improperly disclosed inside information of a rich mineral strike.
Lamont is a director of both the Texas Gulf Sulphur Company, which made the strike, and the Morgan Guaranty Trust Company. He is charged by the SEC with telephoning word of the strike to an officer of Morgan Guaranty before the news was made public.
Morgan Guaranty subsequently bought 8000 shares of Texas Gulf. A suit filed by the SEC April 18 in Federal District Court in New York contends that Lamont violated securities laws forbidding corporate officers to capitalize on inside information.
Lamont's reply, which was also filed in the New York federal court, "denies that at the time of his conversation with the officer of Morgan Guaranty ... he had knowledge or information of any facts ... which had not been disclosed to the public."
The answer also declares that Morgan Guaranty purchased stock in Texas Gulf after the time of the public announcement of the mineral strike. Reporters phoned news of the strike to their publications at 10:20 a.m. the day of the announcement, the reply states, and one major brokerage teletyped news to its branch offices at 10:29 a.m.
The answer contends that Morgan Guaranty's purchasers "were affected at various times from approximately 10:54 a.m. to approximately 10:59 a.m." The SEC suit charges that a Dow Jones news service bulletin "at or about" 10:55 a.m. was "the first official public announcement by ... Texas Gulf of the significance of the ... discovery.