D.H. Blair/Former Execs -3: Probe Sparked By A.R.Baron Barron's and The Wall Street Journal reported earlier this month that the indictment of Blair was expected following the breakdown of negotiations between the DA's office and Blair executives.
At a press conference, Manhattan DA Robert M. Morgenthau said the probe into Blair was an "outgrowth" of the investigation into A.R. Baron, a small
brokerage concern formed by former Blair brokers that collapsed in 1996 amid
allegations it cheated investors out of $75 million.
Morgenthau was unwilling to put a figure on possible investor losses in the
latest case but said Blair manipulated at least 10 initial public offerings
during a 12-year period of criminal conduct.
He estimated that 50,000 people invested money with Blair before its ceased
retail operations in 1998. Many suffered "severe" economic losses as a
result.
A tugboat pilot from Brooklyn, N.Y., lost money she had saved to buy a house,
about $45,000, and a retired New York Philharmonic trumpet player from
Florida
lost $250,000 from his IRA and trust accounts, he said.
In recent months, three former Blair brokers have pleaded to securities
fraud
that cost investors tens of thousands of dollars.
In August 1997, the firm agreed to pay $2.3 million in restitution to
retail
customers for alleged excessive markups in connection with several public
offerings after a regulatory probe led to censure and fines of $2 million.
The DA said the investigation into Blair began in Autumn 1997, and is still
continuing. |
