Harvard Fellow Named In SEC Suit

The Securities and Exchange Commission charged Monday that 13 men--including one of the five Fellows of the University--illegally withheld information of a rich Canadian ore discovery while they, or their business associates, bought stock in the company that owned the deposits.

The SEC has brought suit against the men and the Texas Gulf Sulfur Company--the company which owns the rich deposits and of which the men are either employees, officers, or directors. The SEC is asking that the company and the men be compelled to reimburse people who sold them Texas Gulf stock without knowledge of the ore discovery.

In a suit filed in a federal district court, the SEC alleged that Harvard Fellow Thomas S. Lamont '21, a director of Texas Gulf and also of the Morgan Guaranty Trust, informed one of the bank's other officers of the discovery. Then, this man bought 8000 shares of Texas Gulf for the bank's clients, the SEC charged.

Did Not Profit

However, the SEC suit said that of the 13 men, Lamont was the only one not to profit personally from the information.

Lamont, whose father helped finance the University's main undergraduate library, has been a member of the Corporation--which includes the five Fellows, Harvard's President and Treasurer--since 1952. The Corporation holds deed to all the University's lands and must approve the budgets of the College and all the graduate schools.

Yesterday, Lamont released a statement denying that he had divulged any information before the ore discovery was announced to the public at a news conference.

"I telephoned Longstreet Hinton, head of the bank's trust department, some ten minutes after the press conference ended and told him to look at the broad ticker tape for something about Texas Gulf," the statement said.

"Hinton asked whether it was good, and I said it was. This was the extent of our conversation. I did not advise Hinton to buy stock," it continued. But, according to the statement, the bank did purchase 2000 shares for a hospital, 1000 for a profit-sharing fund for the bank employees, and the remainder of the 8000 for a "commingled trust fund in which some 200 separate trust have participations."

Both Hinton and I were of the belief that the company's announcement was already public information at the time of our phone conversation," Lamont's statement said. Lamont, currently a director of the bank, retired as vice-chairman last year.

According to the SEC's suit, the 12 other men first knew of the rich deposits of zinc and copper near Timmins, Ont. as early as Nov. 12, 1962. Acting on this information, these men bought Texas Gulf stock, the SEC alleged.

Then, on April 12, 1964 Texas Gulf issued what the SEC called a "false and misleading" statement about the deposits. Finally, on April 16 it revealed the true worth of the mineral field, now valued between $1 and $2 billion.

The SEC is asking that people who sold Texas Gulf stock directly to "insiders"--officers, directors, and major stock-holders--be reimbursed. But for the period from April 12 until the April 16th announcement, the SEC is asking that anyone who sold the stock be reimbursed.