SECURITIES AND EXCHANGE COMMISSION
LITIGATION RELEASE NO. 16214 / July 19, 1999
AAER NO. 1143 / July 19, 1999
SECURITIES AND EXCHANGE COMMISSION v. BRUCE J. KINGDON, KENNETH GOGLIA, and HARVEY PLANTE, Civil Action No. 99-CIV-5720 (S.D.N.Y.)
SEC FILES CHARGES AGAINST THREE FORMER
EXECUTIVES OF BANKERS TRUST
On July 19, 1999, the Securities and Exchange Commission filed a complaint in the United States District Court for the Southern District of New York seeking injunctions and civil penalties against Bruce J. Kingdon, Kenneth Goglia, and Harvey Plante, all former executives of Bankers Trust Company. The complaint charges the defendants with knowingly circumventing and failing to implement Bankers Trust's internal accounting controls, and with causing the falsification of Bankers Trust's accounting books and records, in violation of Section 13(b)(5) of the Securities Exchange Act and Exchange Act Rule 13b2-1.
More specifically, the complaint alleges that for at least 3 years ending in 1996, the defendants, while employed in the Client Processing Services unit of Bankers Trust, participated in a scheme to improperly convert unclaimed funds in the bank's custody to Bankers Trust reserve and income accounts in order to meet the bank's revenue and expense targets. According to the complaint, the unclaimed funds rightfully belonged to Bankers Trust customers or should have been escheated to the State of New York as abandoned property. In total, the complaint alleges that the defendants improperly converted approximately $18 million in unclaimed funds and used those funds to offset unrelated Bankers Trust expenses and to inflate the income of Bankers Trust.
In a related proceeding, the United States Attorney's Office for the Southern District of New York today announced the indictment of Kingdon, Goglia, and Plante on charges of conspiracy, misapplication of bank funds, making false entries in bank books and records, and conversion from employee benefit plans. On March 11, 1999, in another related proceeding, Bankers Trust pleaded guilty to three felony counts of falsifying bank records in violation of 18 U.S.C. § 1005, and agreed to pay $60 million in fines.
The Commission's investigation of this matter is continuing.