Texas oilman T. Boone Pickens Jr. likes to describe himself as the "champion of the small stockholder." But that self-portrait may not sit too well with the shareholders of Homestake Mining Co.
Yesterday, Pickens agreed to pay $2.3 million to settle a government lawsuit that accused him of manipulating the price of Homestake stock. The government accused Pickens of announcing that he wanted to buy Homestake and then -- when the company's shares rose -- quickly selling his stock.
The $2.3 million, the Securities and Exchange Commission said, would go to Homestake investors who were harmed financially by the actions of Pickens and his investment group, Mesa Limited Partnership. Pickens also is head of Mesa Petroleum Co.
In agreeing to the settlement with the SEC, Pickens and Mesa Limited Partnership neither admitted to nor denied the allegations, as is customary in such cases.
Pickens, 62, was a freewheeling corporate raider who made millions of dollars for Mesa stockholders during the 1980s by making takeover bids for other oil companies and then selling out his shares once the stock climbed.
Since 1986, Pickens has been the chairman of the United Shareholders Association (USA) of Washington, a group he founded to lobby for shareholders rights -- especially to prevent legislation that would interfere with takeovers.
On Monday, Pickens will be succeeded as head of USA by Charles Cox, a former SEC commissioner. USA said it has 64,000 members nationwide.
Harry M. Conger, chairman of Homestake, a San Francisco gold mining company, said he essentially agreed with the SEC action, although he questioned whether the $2.3 million was a sufficient amount.
The SEC said Mesa announced on Feb. 29, 1988, that it wanted to negotiate a $20-a-share purchase of Homestake Mining. Mesa disclosed then that it owned 3.5 million shares of Homestake, a 3.8 percent stake. After the announcement, the stock price rose $4 to about $18 a share.
The SEC alleged that on the same morning, Mesa sold 107,300 shares as well as 2,131 call options, which investors use to bet that a stock will rise.
From March 1 to March 11, 1988, Mesa sold another 3.2 million shares plus 1,200 call options, the SEC said.
The SEC said the Mesa press release on Homestake was "false and misleading" because it did not reveal Mesa intended to sell its shares.
Mesa said it had agreed to settle the SEC action "to avoid the time, distraction and expense of a protracted litigation."
Meanwhile, Mesa said it agreed to pay $4.9 million to settle a class-action suit brought by Phillips Petroleum Co. shareholders against Mesa and Phillips.
Mesa, Phillips and other defendants agreed to pay a total $6.7 million to settle the suit. In a Phillips-Mesa deal, Mesa sold back its shares to Phillips at a pretax profit of $89 million.