The Knoxville News-Sentinel from Knoxville, Tennessee • 30

Knox investment firm suspended fined Masingill Associates now out of business sales representatives for the firm honestly believed that the investments were safe and had no prior knowledge of any fact which would have led them to believe otherwise" AC Marin gill Associates which itself invested benefit plan fluids in the -certificates in addition to making partial restitution to clients was the biggest single victim of fraud perpetrated by PEB and said Masingill Hesaid while the likelihood of collecting anything more from Pacific Exchangers Bank is remote a Bahamaian law firm has been engaged to pursue action against the bank Recent wad from Vanuatu was that two principals in the certificates transactions have been arrested and are in Jail said Masingill Moore said the state has received word from Vanuatu authorities that they are revoking Pacific Exchangers license Moore said the state has not officially taken action on the matter yet but that an order should be issued soon was unaware the off-shore certificates were considered securities The NASD said the firm and its principals should have been more diligent Masingill who heads FMP Development Cop said he had not been active in day-to-day operations of AC Masingill Associates for several years although he remained its principal The firm does personal financial planning as well as arranging investments for clients results of the PEB investments have admittedly been a fiasco" he said in a memorandum submitted to the NASD principal and employees of the firm have recognized (that) perhaps with more rigorous and costly due diligence on their part they may not have ever referred their customers to Wolcotts what should not be lost by anyone reviewing this matter is that Mr Sharp and Mr Walker in their roles as investors The state recovered $181100 from Wolcotts which was distributed to nine clients who filed claims said Robert Moon chief counsel fa the state securities division The Knoxville firm had dealt with Wolcotts in arranging purchases of certificates for its clients according to Ma-singilL Of the $1080000 invested by clients of the Maringiii firm $732100 has been recovered by investors Masingill said This includes $403500 recovered from Pacific Exchangers Bank and $328686 in restitution from the firm and its representatives he said The NASD sanctions against the Knoxville firm stem from selling unregistered securities Masingill said his firm which had periodically brokered other certificates of deposits for clients through commerical banks and savings and loans stems from 1989-90 sales to eight clients of certificates of deposit issued by Pacific Exchangers Bank Ltd which is chartered in the Pacific island nation of Vanuatu The five-year certificates promised 15 percent interest and were purported to be collateralized by U5 Government securities State securities regulators in 1991 charged that certificates from the bank were fradulent and through court action closed down a Chattanooga company Wolcotts Financial Services Inc which had been acting as agents for the bank State officials charged Wolcotts with fraud and misrepresentation in the sale of $25 million of the certificates to some 40 investors A Nashville Judge in approving a state takeover of Wolcotts tamed it part of a fradulent Fonzi scheme an investment swindle in which investors are paid off with money put up by later A Knoxville investment firm has been disciplined by the National Association of Securities Dealers after getting caught up in what has been described as a fradu-lent Pond scheme AC Masingill Associates was fined $30000 and suspended from NATO membership for six months beginning this month AC Masingill Jr the registered principal and Jeffrey Sharp and Gaines Walker registered representatives also received fines and suspensions Masingill said AC Maringill a Associates has not operated as a broker-dealer for a year and a half and there are no plans to reactivate it He said it is likely that Sharp and Walker will reapply to' become registered representatives to work for other brokerdealers after their suspensions are lifted According to NASD the disciplinary action against the firm and its members Pilots join strike against airline Walkout snarls travel as Thanksgiving nears By Susan Hightower I': Jfigg 1 orTS -jl -v I Vv)' V'i A mm1 American pilots union said Friday it would not join the flight attendants in their two-day-old walkout at least for now because the flight attendants have been so successftil at crippling the airline on their own American again refrained from releasing statistics on how many of its flights got off the ground Executives of other airlines estimated American was trying to fly 40 percent of its schedule But thousands of unlucky passengers were forced to search for other seats on a heavily traveled day A walkout by the union representing American's 10000 pilots likely would have grounded the carrier through Thanksgiving one of the busiest travel weeks of the year The 21000-member Association of Professional Flight Attendants said the pilots' decision to stay on the Job was not a setback However American was training other employees to fill in for the strikers hoping to get more planes flying in the coming days and lessen the impact of the walkout The Allied Pilots Association had asked its members to vote on whether to wage a sympathy strike But union president Rich LaVoy said the board had decided not to have the votes counted Travel agents and other airlines reported American appeared to be focusing its efforts on flying passengers between Dallas-Fort Worth Miami New York Chicago and London Officials at airlines that have weathered strikes in the past said the next logical step for American would be to stabilize its schedule and drop the least profitable routes a step the airline appeared to be taking by concentrating on its largest hubs and destinations used by high-fare paying business travel- riWhfflSrllHIMW'lil Reports question Whittle financial backing Is the health of Whittle Medical News Network ailing? the report by two national business publications The Wall Street Journal and Advertising Age reported last week that MNhPs health has taken a turn fa the worse Whittle secured $100 million from seven leading pharmaceutical drug companies for a one-year test of MNN a daily news and information broadcast delivered to MEDICAL offices via satellite NEWS But according to the reports MRTUTrnnr the first-year sponsors have yet to a commit to a second phase which would start in February MNN Chairman Alan Greenberg on Friday said the two reports were and and that the network had Just received its first major commitment a $70 million three-year commitment from (me of the original cue sponsors and is in firm negotiations with other sponsors Clients have until the end of the year to make commitments Greenberg said adding that the company hopes to raise about $400 million in sporunnhipa The network is currently found in 5100 offices and allows doctors to view a daily medical news program order drug samples request information from companies by fax a mail and view accredited continuing medical education programs and news specials The first-year sponsors were reported to be Marion Merrell Dow Ino Abbott Laboratories Inc Pfizer Inc Johnson Johnson Glaxo Inc Ciba-Geigy Corp and Merck Co Failure to renew the drug sponsorships would be Just (me more blow to the communications company that has had a year of woe in general Channel One in-school news broadcast continues pulling controversy Its Special Report Network fa waiting roans has yet to break even And the company was never able to attract Mg corporate partners fa its ambitious fa-profit Edison chain of schools The project has since been scaled back Greenberg is optimistic Whittle will renew the sponsorships very bullish right he said i i American Airlines pilot Douglas Lae is hugged by unidentified American Airlines flight attendants at New York's LaGuardia Airport Friday after Informing them his flight was canceled due to the flight strike can said it had filed a federal lawsuit seeking an injunction preventing the union from Joining the walkout The number of striking flight attendants which flw union put at around 95 percent caught the airline and outers by surprise Lavoy said about a third of flints Friday morning carried passengers board determined that the need for a sympathy strike has been superseded by the overwhelming success of the flight LaVoy said But Lavoy said pilot union leaders might recon- wants to raise calling card call rates By The SmocMs Press NEW YORK on Friday proposed raising the cost of domestic long distance calls made with a calling card or an help The company also asked regulators about $380 million in annual revenue If approved by the Federal Communications Commission the 800-service change would take effect Dec I and the long distance hike Dec 2 Hie changes do not affect people who dial directly from home to some to let it raise the price of nearly every international call and change 800-line rates simplifying their structure but raising monthly rates 2 percent to typical business customers The largest long distance company said the proposals would add where else in the United States said it is seeking to raise the service charge cm collect and some operator-assisted calls from $194 to $105 billed-to-third-party calls from $2 to $111 busy-line verifications and interruptions from $2 to $150 BP" Briefs l-i Fannie Mae lowers its equity rule Johnson chairman of the association also known as Fannie Mae believe this will be an enormous benefit to consumers especially those living in areas where home prices have Millions of homeowners have refinanced their mortgages in recent years as mortgage rates fell from double-digit figures Rates had dropped to a 25-yew low of 674 percent in October although they avenged 718 percent this week Refinancing at a loww rate permits homeowners to reduce their monthly payments Fa instance homeowners who took out ByTTw AancWad FYm WASHINGTON The largest investa in home mortgages has lowered the amount of equity that many homeowners must have to refinance their residential loans The Federal National Mortgage Association said Friday it will permit refinancing on homes in which owners have as little as 5 percent equity Previously refinancing required at least 10 percent equity are extending the benefits of refinancing to a greater number of said James A a 30-yew mortgage on a $100100 home when rates were 95 per- cent four years ago now pay $840 a month in principal and interest By refinancing at a 7 percent rate their monthly payments would drop to $665 Johnson said Fannie Mae has refinanced more than $143 billion in mortgages fa about 15 million households so for in 1991 Association economists estimate $10 billion of savings will be pumped into the economy through mortgage refinancing and through the downward adjustment of adjustable-rate mortgages this year Firm reaches agreement on asbestos ByTlwAaiocMad Praw NEW YORK Keene Coro said Friday it reached a preliminary agreement to settle all asbestos-related litigation against the firm a deal the company says win keep it solvent while maximizing the payout to Mbpafn claimant It was not immediately determined how much money the 100000 claimants would receive under the proposal Keene said that and other details would be waked out in a final agreement The company did not say when that agreeement might be readied But Stuart Rickereon general counsel said in a statement late Friday announcement is the most significant step so far towards the resolution of these claims and putting asbestos litigation behind Keene? A US district Judge in Brooklyn earlier this year proposed a mass settlement of the claims against Keene The goal of the case was to divide dwindling assets among plaintiffs The company has about $100 minion in total assets but the bulk of those have been set aside fa Judgments against the firm The proposed settlement must be approved by the court $14 million heist reported from Salomon Brothers investment house NEW YORK Salomon Brothers the Wall Street investment house reported Friday it had been the victim at a $14 million heist The brokerage firm refused to give details but The Wan Street Journal reported that the money disappeared from a conference-planning kitty The Journal quoted unidentified sources as saying that Salomon was investigating whether the conferenceplanning supervisa was behind the alleged robbery It ktontifiarf her as Kathleen Tompkins and said she had taken a leave of absence Refund checks said undeliverable The Internal Revenue Service says it has 1154 refund charka woth $423431 that were returned by the Postal Service as undeliverable to Tennesseans When a refund is returned the IRS attempts to find the taxpayer but there are always some who be located according to IRS Directa Glenn Cagle Taxpayers who haven't received an expected refund are encouraged to contact the IRS toll-free at 1 (800) 829-1040 WKXT-TV moving studios offices WKXT-TV Channel 8 win begin moving this weekend into a new $2 million facility at 6518 Papermill Drive according to Ranee Randby promotion manager The television studio and offices are bring relocated from Sharps Ridge Names in the news Shell Clevenger a Knoxville native has been named programmer analyst in the Information Services Department of Clayton Marcus Co a Noth Carolina furniture manufacturer He formerly was with IBM in Washington Senator calls for study of Wal-Mart volvement in the issue He noted that a forma Leahy aide is now a vocal Wal-Mart opponent an issue Leahy dismissed as irrelevant problem as I see it is we have a rally good permit process up Davis said people try to introduce politics into the permit process I think it has any Davis said he was unlikely to contact Leahy about the issue Leahy wrote Joseph Ross directa of the Congressional Research Service asking for the review He asked that the study focus on the retail impact on rural areas and small towns tion comes as the company seeks permission to build retail stores in Williston and the St Albans area concerned about what changes it makes on our own way of the Vermont Democrat said Friday think Vermonters have to know a great deal more about what they are getting into him they have been told" am wary of Wal-Mart coming to the senata said Usually Wal-Marts just travel in pairs Most states have multiple Burlington developa Jeffrey Davis managing partmr of Taft Comers Associates said he was puzzled by Leahy's sudden in ByTlw AModatad FYm MONTPELIER VL Voicing concern about the impact the giant Wal-Mart retail chain would have on rural Vermont U5L Sen Patrick Leahy on Friday called fa a congressional study of the issue Leahy asked the Congressional Research Service to review Wal-Marfs business practices and its impact on communities He pakl that study should take about five weeks to complete Vermont is the oily state in the Iowa 48 without a Wal-Mart and its accompanying Club call for an investiga.