Former Reagan OMB director charged with securities fraud

[JURIST] David Stockman [official profile], former director of the US Office of Management and Budget [official website] during the Reagan administration, was charged [DOJ press release, PDF] Monday with conspiracy to commit securities fraud and making false statements. The indictment [PDF text], which also listed three others as charged, relates to his time spent as CEO of auto parts manufacturer Collins & Aikman Corp. [corporate website]. The government alleges that Stockman was personally involved in a scheme to mislead creditors and investors about the financial status of the company.

According to a prepared statement [PDF text] by Manhattan US Attorney Michael Garcia, the case is about

systematic, purposeful lies told to a company’s auditors, creditors and investors about how much money the company was making. It is about fake documentation created at the direction of Stockman and his coconspirators, designed to hide the truth from auditors. And it is about Stockman’s increasingly desperate attempts to avoid C&A's bankruptcy, by repeatedly lying to the public and the company’s lenders, to get them to throw good money after bad.
AP has more.

 

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