The Comptroller of the Currency suspended trading in National Bank of Georgia stock yesterday because of unusual activity in the shares on Friday following the disclosure that Bert Lance was negotiating to sell his interest in the bank.
The value of the stock, which is traded over-the-counter, rose $4.75 to 15 a share on Friday, the day after an attorney for the former budget director announced that a buper was negotiating to pay $20 a share for the stock.
In his announcement yesterday, Comptroller John Heimann said that NBG requested the 10-day suspension of trading.
The suspension, said Heimann in a press release, will "permit time for dissemination to the public of information concerning the announced negotiations . . ."
Lance paid about $17 each for his 200,000 share of NBG. Last summer the price of NBG plummeted to about $9 when the bank reported a $1.4 million loss for the second quarter brought on chiefly by loan writeoffs. Dividend payments were suspended as a result.
The bank remained in the red in the third quarter, and its stock has been listless until last week's announcement.
Lance, who headed NBG for two years before going to Washington in January, was also chairman of Calhoun (Ga.) First National Bank.
Lance's banking and personal finances have been under investigation by several federal agencies since he resigned in September.
With two other investors, Lance bought control of NBG in June 1975, from Financial General Corp., a Washington-based bank holding company.
Presumably, any investor willing to pay the premium price of $20 a share for NBG would want to acquire enough stock to control the bank. However, it was not disclosed how many shares are involved in the deal.
Lance, who borrowed from banks to acquire his NBG stock and other holdings, disclosed last January that his debts totalled $5.3 million. Thus getting $4 million for his NBG stock would considerably improve his financial picture. Lance still owns nearly 50,000 shares of the Calhoun bank.
The Securities and Exchange Commission, one of the agencies investigating Lance, has told Lance's lawyer that as part of a settlement of a civil suit it might ask Lance to stay out of banking for a period of time.
Recently, The Washington Post quoted a memo of a Nov. 8 meeting between SEC attorneys and attorneys for Lance, NBG and the Calhoun bank. Written by an attorney for one of the banks, it quoted a high SEC official saying "there were egregious abuses and there were serious questions about whether Mr. Lance should be allowed to manage other people's money."
Meanwhile, in Atlanta, a federal grand jury will be impaneled on Dec. 15 as part of the Justice Department's on-going investigation of Lance.
The jury will hear no testimony on the Lance case, at least in the early stages of its term. It will be used by Justice attorneys to issue subpoenas for persons and documents.
Justice's investigation of Lance has been spearheaded by a 3-man panel, which will decide whether there is enough evidence from various agency investigators to seek an indictment from a grand jury.