Gulf & Western Industries Inc., which enjoyed spectacular growth over the past decade, has recently curtailed its acquisitive ways while federal authorities and others probe some of its past activities.
The Securities and Exchange Commission has been investigating the company for nearly a year.This week the SEC refused to clear a registration statement for a G&W subsidiary planning to sell $75 million worth of 15-year notes.
The G&W registration statement said the SEC was looking into "possible violations of the federal securities law by G&W and certain of its officers and directors."
A G&W spokesman said the company would reschedule the offering, which was about to hit the market when the SEC decision was made public.
In January, the same G&W subsidiary that was blocked from selling notes this week, Associates Corp. of North America, a Dallas-based consumer loan company, was cleared by the SEC to sell another batch of notes also value at $75 million.
This week's action could mean that the SEC is close to acting against G&W.
The SEC says it is getting valuable assistance in its probe from Joel Dolkart, a former G&W director and former close associate of th company's mercurial chairman, Charles Bluhdorn.
In 1974, Dolkart was indicated by a New York State grand jury for diverting to his own use $2.5 million belonging to two law firms where he was a partner from 1967 to 1973. While a partner at each of the firms, at separate times, he handled G&W legal business and also was the company's general counsel.
Dolkart, who is in his mid-60s and reportedly in poor health, has received 5 stays in execution of a three year jail sentence he received after pleading guilty to one of 89 counts.
This week a state judge in New York City reluctantly granted the fifth stay to Dolkart. The judge said this would be the final stay and that Dolkart must go to prison on July 13.
The stay came after a prosecutor introduced a letter from Stanley Sporkin, director of the SEC Division of Enforcement to Manhattan District Attorney Robert Morgantnau.
Sporkin said the letter was to summarize "the nature and extent" of Dolkart's help during the "non-public investigation" of G&W.
"Mr. Dolkart has identified specific transactions and persons involved in such transactions," Sporkin wrote. "He has, in some instances, given us times, dates, figures and other pertinent data."