The state of Georgia yesterday placed the Georgia operations of E. F. Hutton & Co. Inc. under a 12-month administrative probation, which will allow the company to continue doing business in the state but under close supervision.
Georgia's secretary of state, Max Cleland, who is also state commissioner of securities, said the action followed an investigation prompted by Hutton's guilty plea in Pennsylvania to multiple counts of federal mail and wire fraud. The violations involved the investment company's overdrafting of bank accounts.
Cleland said the state investigation found that none of the illegal activities occurred in Georgia and that no Georgia employes of the company were involved in the acts. He also said no funds of Georgia customers were jeopardized and there were no violations of Georgia securities laws.
As part of the probation, Hutton will be required to report regularly to the state to ensure that no funds of Georgia customers are placed in jeopardy and to comply strictly with its plea agreement with the U.S. Department of Justice.
"E. F. Hutton has been cooperative throughout our investigation," Cleland said in a statement. "The Georgia operations of the company realize what we are doing is to ensure that Georgia's investors are fully protected and that the integrity of our law is maintained."