The Securities and Exchange Commission yesterday accused Carl C. Icahn, Bayswater Realty & Capital Corp. and Icahn & Co. of violating securities laws, including late or inadequate disclosure of pressure applied to one company and maneuvers to gain a seat on the board of a second.
At the same time the SEC filed a civil action in U.S. District Court in D.C., the two companies and Icahn agreed to a court order requiring them not to violate certain sections of the securities laws. In doing so, Icahn and the companies neither admitted nor denied the SEC's charges. Icahn is chairman of the two firms.
The charges centered around actions involving the defendants' stock position with two other companies and how they used it. In one case a group headed by Icahn acquired 9 1/2 percent of the outstanding common stock of Saxon Industries Inc., a manufacturer of specialty papers and paper copiers.
The group met with Saxon's management on several occasions to request that Saxon purchase all of the group's Saxon stock at a substantial premium above the market price of the stock. If management refused, the group said it would seek four seats on Saxon's board of directors.
Saxon agreed and paid a premium price for the group's shares on Feb. 13. The group filed an amendment to previous filings on Feb. 21.
In another situation, Icahn & Co. borrowed 70,000 shares of Hammermill Paper Co. in 1980, obtained two proxies for the borrowed stock and voted them in favor of Icahn's election to Hammermill's board. The SEC said that the Icahn group made inadequate disclosures about the borrowed shares.