The Securities and Exchange Commission charged Smith Bagley and others yesterday with securities fraud in a suit filed in U.S. District Court here.
The expected civil action came a day after Bagley was indicted by a grand jury in Winston-Salem on conspiracy, fraud and stock maniulation charges.
Bagley, a socially prominent Washingon resident who was a campaign fund-raiser for President Carter, is an heir to the R. J. Reynolds tobacco fortune.
He was charged with manipulating the stock of Washington Group Inc., a Winston-Salem frim he James R. Gilley.
Gilley, a Winston-Salem resident, was named in the civil suit. He also was indicted along with Bagley.
Others named by the SEC were David R. Johnston, who sold two companies he controlled to the Washington Group, and William F. Thomas. a vice president of Interstate Securities Crop.
The SEC said from July 1973 to April 1977, Thomas sold a total of 282,331 shares of Washington Group for $4,446,411 to 206 customers of Interstate.
According to the suit, Bagley, Gilley and Thomas arranged for false price quotations of the Washington Group stock to be published in the National Quotation Sheets "for the purpose of manipulating the over-the-counter price of the stock."
The SEC censured Interstate, a Winston-Salem broker-dealer and prohibited the firm from soliciting certain kinds of new business for a period of 90 days.
Among the other allegations in the
Certain buyers of Washington SEC suit: Group shares were granted guaranthe stock. tees against loss when they bought
Guaranteed $676.000 in bank loans for certain person to use to buy the
Caused employes to buy at least stock. $614,000 worth of Washington Group stock though employe stock purchase plans.
Used about $380,000 of Employe pension funds to buy the stock.
The Washington Group is currently being reorganized under the federal bankruptcy laws.