The dean of Northeastern University Graduate School of Business in Boston was charged yesterday with trying to collect a finder's fee from a major corporation by claiming he could arrange for it to acquire control of a famour international consulting firm, which was not, in fact, for sale.
The Securities and Exchange Commission filed suit in U.S. District Court here against Geoffrey P.E. Clarkson charging him with fraud for taking out a newspaper advertisement offering controlling interest in Arthur D. Little Inc., the Cambridge consulting them.
While either admitting nor denying the SEC allegations Clarkson signed a consent decree agreeing not to obtain money through fraudulent schemes.
According to the suit, in December, 1977, Clarkson said he was retained by a Liechtenstein entity, ATI Establishment, to locate a purchaser for "an unidentified international management consulting company."
In February, 1978, Clarkson took out an ad in the wall Street Journal, which said. "International management consulting company sale. Annual billing $100 million. Net profit $4 million, 10 percent annual growth, over 60 percent voting stock available . . ."
The ad drew more than 150 responses, the SEC said, some of them from "sophiscated persons in the financial community" who "construed the advertisement as offering for sale the securities in A.D. Little."
In fact, A.D. Little, a publicly owned company, had virtually the same performances figues as the unnamed firm in the Journal advertisement.
SEC said that "Clarkson then determined to try to arrange the sale of a controlling interest in A. D Little"
He sent interested parties a "photostatic copy of A. D. Little's 1976 financial statements with the name of A. D. Little deleted," the SEC said. But the commission said Clarkson didn't delete a footnote that referred to Memorial Drive Trust, (MDT) a profit sharing trust that holds stock for the firm's employes.
In March, 1978, Clarkson met with would-be buyers, the SEC said. One of them, a representative of a large multinational industrial company told Clarkson "the advertisement was one of the most attractive he had seen in years," the SEC said.
That same month, Clarkson called the managing trustee of MDT, who had read the Journal ad and told the professor the trust had no interest in selling its. A.D. Little stock, according to the SEC.
Later in March, the SEC said, Clarkson told the representative of an unnamed company that "the trustees were willing to consider selling MDT's holdings in A.D. Little" to his company.
At another meeting with another company, Clarkson said he could deliver 70 percent of A.D. Little's stock, but that he wanted "compensation as a finder as well as a continuing relationship with the ultimate buyer."
"Rumors and speculation" about the A.D. Little deal "spread throughout the marketplace," the SEC said, causing A.D. Little's stock to climb from $19 a share on Feb.20, 1978, to 26 on 1/4 April 20.