The Securities and Exchange Commission has sued OKC Corp. of Dallas and its chairman, alleging -- among other things -- that the top executive took at least $5 million in "kickbacks" from "friendly brokers" of petroleum products who split their profits with him.
The civil complaint, filed Monday in U.S. District Court in Dallas, accuses OKC Chairman Cloyce K. Box of violating the antifraud statutes of the federal securities laws. The SEC is asking the court to bar the company and Box from future violations.
The SEC alleges that Box caused OKC to buy and sell petroleum products through some of his "friends and business associates."
At least two of these individuals split their profits with Box, the SEC claims. As a result, Box collected $5 million in "kickbacks" from November 1973 through June 1977, the commission contends.
Box, reached by phone at his Dallas office, had no comment Monday after the SEC filed its action.
OKC, which had sales in 1979 of about $190 million, is in the cement and dredging businesses, as well as petroleum and natural gas production.
In court papers filed in Dallas, the SEC raises questions about the sudden settlement by Box of a criminal investigation by the Department of Energy.
In the court papers, the SEC contends that Box pleaded guilty to misdeameanor charges and the OKC board of directors agreed to pay $4.75 million to settle the allegation that the company violated DOE pricing regulations by making sales through "friendly brokers."
The SEC alleges that "OKC's directors, in approving the settlement of the Department of Energy claims, were not advised that Box had received in excess of $5 million in kickbacks from the 'friendly brokers.'"
The SEC claims that "Box's motivation to suddenly settle [the DOE criminal case] after years of resistance was to escape more serious criminal liability for acts and practices being investigated by the commission."
One legal expert said that because the allegations in the DOE case were essentially the same as those in the SEC complaint, Box may have avoided federal criminal prosecution under laws covering double jeopardy. But the same expert said that Box may be vulnerable to criminal prosecution under Texas state laws.
Box, 57, is a former end for the Detroit Lions professional football team.
On May 13, OKC shareholders approved a plan to liquidate OKC, but the SEC said that the proxy statement mailed to stockholders seeking the action did not disclose "the nature or amounts of funds Box had received and still retained to the detriment of OKC's shareholders."