A federal judge yesterday dismissed a class action charging former Carter administration budget director Bert Lance and a dozen of his associates with fraud in their effort to gain control of Financial General Bankshares Inc., the Washington banking company.
The financial General stockholders who filed the suit failed to show any fraud had been committed, U.S. District Court Judge Oliver T. Gasch ruled in ordering the case dismissed without a trial.
The lawsuit was one of the last remaining obstacles blocking the purchase of controlling interest in Financial General by a group of Middle Eastern investors led by Kamal Adham, former chief of Saudi Arabia's equivalent of the CIA.
In another Washington bank takeover fight, the 25 directors of Riggs National Bank are to meet again today to consider a bid by financier Joe L. Allbritton to buy control of Riggs. The board met for more than three hours Tuesday then adjourned until today without taking action.
The Riggs board reportedly will announce today whether the bank's management will oppose, approve or take no position on Allbritton's plan to offer $67.50 a share for up to 600,000 shares of Riggs stock.
At Financial General, Adham and his partners from Abu Dhabi and Kuwait are expected to make an offer by this summer of $28.50 a share for all the stock they don't own already. Robert Altman, attorney for the group, said the Federal Reserve Board recently accepted the group's application to buy the bank, and is expected to rule on the request this spring.
The lawsuit dismissed yesterday was filed by some Financial General stockholders who claimed they were defrauded when they sold the company's stock on the open market in 1977. At that time Lance was helping the Middle Eastern group buy Financial General stock from some major shareholders, offering them $15 a share, a few dollars more than the market place.
The Securities and Exchange Commission later cited Lance, Adham and several others involved in the takeover bid for failing to make their purchases public.
The stockholders claimed the failure to disclose the takeover plan amounted to defrauding them because they sold their stock for less than the Middle Eastern group was paying. Judge Gasch effectively rejected that argument by accepting a defense motion to dismiss the case.