Schenley Industries Inc., a major liquor firm, allegedly made questionable payments of at least $6 million in recent years to various purchasers, the Securities and Exchange Commission charged today.
In a consent agreement filed simultaneously with the SEC complaint, in U.S. District Court here, Schenley and its parent company -- Rapid American Corp. -- agreed not to violate securities laws and promised Schenley will appoint a "special agent" to investigate the payments.
The SEC charged that Schenley violated liquor price regulations in 35 states and gave customers illegal discounts in the form of cash, credit, free merchandise and other things.
Such special discounts, the SEC charged, violated state liquor laws and failure to disclose the practice to shareholders and the government violated federal securities laws.
Although not mentioned in the SEC complaint, the consent order indicates Schenley also may have made illegal political contributions and illegal payments to foreign government officials.
The "special agent" also will investigate the political and foreign payoffs and will prove any other federal and state investigations involving Schenley.
As a result of Schenley's alleged failure to disclose payments, the parent company, Rapid American, also violated securities laws, the SEC charged. Rapid American agreed to file new reports within 30 days.