CINCINNATI, JUNE 25 -- Federal officials reportedly are investigating whether stockbroker P. David Herrlinger, whose bogus offer for Dayton Hudson Corp. shocked Wall Street on Tuesday, told his stockbroker brother of the offer beforehand.
Separately, three New York investors filed a federal lawsuittoday seeking unspecified damages from Herrlinger on the grounds they lost money because of gyrations in Dayton Hudson's stock price following news of the phony offer.
The Securities and Exchange Commission is trying to determine whether David Herrlinger told his brother, Thomas Herrlinger of Albuquerque, N.M., of the phony offer before it was announced, the Cincinnati Enquirer reported today.
David Herrlinger was hospitalized for an undisclosed problem Tuesday after telephoning a bogus $6.8 billion buyout offer for Dayton Hudson to Dow Jones News Service. The price of the company's stock surged and then dropped in heavy trading after the wire service reported the offer, and later when the bid was revealed as false.
David Herrlinger's former boss, Capital Management Corp. President Richard Miller, said he believed he overheard a phone conversation between Herrlinger and his brother, who is a broker with E.F. Hutton & Co. in Albuquerque, in which the offer was discussed before it was made.