Litigation Release No. 17647 / August 1, 2002
SECURITIES AND EXCHANGE COMMISSION V. NATIONAL PRESTO INDUSTRIES, INC., U.S. District Court for the Northern District of Illinois, Civil Action No. 02 C 5027 (N.D. Ill. July 16, 2002)
The Securities and Exchange Commission announced that on July 29, 2002, it filed an amended Complaint in the United States District Court for the Northern District of Illinois against National Presto Industries, Inc. ("National Presto") located in Eau Clare, Wisconsin. The Complaint alleges that National Presto, since at least 1994, has operated as an unregistered investment company in violation of Section 7(a) of the Investment Company Act.
Specifically, the complaint alleges that National Presto is primarily engaged in investing and reinvesting in securities and that the company's balance sheets demonstrate that National Presto's investment securities have exceeded 40% of its total assets (exclusive of Government securities and cash items) since at least 1994. In fact, from 1994-2000, National Presto had investment securities totaling at least 70% of its total assets.
The complaint also alleges that National Presto's board, including, Melvin Cohen, National Presto's Chairman Emeritus, and Maryjo Cohen, National Presto's Chairwoman, President and Chief Executive Officer, have directed National Presto's investment activities since at least 1994. National Presto's treasurer invested the company's assets at the direction of and pursuant to policies set by the Cohens and the complaint alleges that the board and the Cohens have been aware of the facts and circumstances surrounding National Presto's violation of the Investment Company Act since at least 1996. Nevertheless, National Presto's Board and the Cohens failed to cause National Presto to comply with the Investment Company Act.
As a result of National Presto's failure to register as an investment company pursuant to Section 8 of the Investment Company Act, the Commission alleges that shareholders have been denied the benefits of the Investment Company Act, including several provisions designed to protect them from, among other things, theft, self-dealing, fraud, excessive fees, and breach of fiduciary duty.
 | SEC Complaint in this matter. |