P. M. BRIEFING : Broker Accused Misusing Funds
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NEW YORK — Sixteen current and former Thomson McKinnon Inc. employees filed a lawsuit today claiming that officials of the Wall Street brokerage used company assets for personal gain and mismanaged an employee stock trust.
The federal suit, which seeks up to $150 million in damages, also alleges that a deal to sell Thomson McKinnon fell through after Prudential-Bache Securities Inc. discovered the brokerage was overvalued by more than $80 million.
The company denied the allegations in the lawsuit.
After the deal collapsed, Prudential-Bache in July purchased only the retail brokerage offices and customer accounts of the struggling Wall Street firm.
The lawsuit, filed in U.S. District Court in Manhattan, alleges that Thomson McKinnon maintained apartments for senior officers, bought and maintained a $1.3-million boat for the company’s president and gave executives disguised weekly cash payments for personal use. It also claims the Thomson McKinnon directors used assets in an employee stock ownership plan, or ESOP, for personal gain.
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