ustxtxb_obs_1971_02_12_50_00002-00000_000.pdf

The cast of characters Dallas THE PLAINTIFF: SEC The Securities and Exchange Commission, a federal regulatory agency established in 1934 to police stock transactions. THE DEFENDANTS: NBL National Bankers Life Insurance Co., chartered in Texas on June 13, 1945, and does business in several other states. NBL Plan NBL Employees Retirement Plan, a pension trust created by NBL for the benefit of its employees. MCI Master Control, Inc., a Texas corporation formerly owned by NBL whose shares were spun off to NBL shareholders on Oct. 9, 1969. By reason of the spin off, MCI is now publicly owned. OLYMPIC Olympic Life Insurance Co., a publicly held Texas corporation chartered on April 24, 1964. NASHWOOD Nashwood Corp., a Texas corporation privately owned by John Osorio, Waggoner Can, Joseph Novotny, Sam Stock, Donald Akins and others. FLAP Flap, Inc., a Texas corporation privately owned by James Farha, J. Quincy Adams, Phillip Proctor, W. B. Strange, Jr. and others. The name is an acronym for Farha, Ling, Adams and Proctor. SAC South Atlantic Corp., a Delaware corporation controlled by Waggoner Carr, John Osorio, Joseph Novotny and Frank Sharp. SAC was used as a holding company for stock of the Ric International Industries, Inc., a publicly owned company formerly listed on the American Stock Exchange and currently the subject of a voluntary petition under the Bankruptcy Act. Realty Co. and Oak Forest Investment Co. all privately owned Texas corporations owned or controlled by Frank Sharp. SSB Sharpstown State Bank, chartered by the State of Texas. Approximately 80% of the stock of SSB was issued in the name of SRC, a holding company 100% owned by Sharp and his family. Frank W. Sharp chairman of the board of NBL and owner of 53% of the outstanding stock of NBL and of MCI. Controls Olympic through his son-in-law W. D. Haden, who is chairman of the board of Olympic, and through the financing of the controlling stock in Olympic by SSB. Sharp controls Nashwood through assignment of its shares to CB&T and DBT&T as collateral for loans at each bank and through loans made by Nashwood at SSB. Sharp controls SAC through his control of SSB, which financed SAC’s purchase of the controlling stock of DB&T. Since November, 1967, Sharp has exercised control over and conducted securities transactions through the Jesuit Fathers. John Osorio until July 1, 1970, president of NBL, part owner of Nashwood and of SAC. Former insurance commissioner of Texas and former aide to ex-Gov. Allan Shivers. Quincy Adams vice-president and representative of Ling & Co., former officer of CB&T and part owner of FLAP, Inc. 2 The Texas Observer Waggoner Can part owner of SAC and vice-president, director and controlling person of RIC. Former Texas Atty. Gen. Tom M. Thomas Part owner of Nashwood Corp., director of Master Control, Inc., president of West Virginia Life Insurance Co. prior to its merger with NBL. Sam Stock president of NBL, former president of Olympic, also director of both companies, a trustee of the NBL Plan and part owner of Nashwood. Donald Akins executive vice-president and director of NBL; former president and chairman of the board of DB&T and a stockholder of Nashwood. Phillip Proctor securities trader of Ling & Co. until May, 1970, and shareholder in FLAP. William B. Strange, Jr. vice president and general manager of Ling & Co. James Farha vice-president and representative of Ling & Co. and shareholder in FLAP. Michael Ling president and chairman of the board of Ling & Co. David Hoover associate of Osorio and Can; obtained loans from NBL and DB&T and large blocks of NBL stock at the instance of Sharp and other defendants. Audy Byrum president of RIC Industries until June, 1970, borrowed large sums from NBL with inadequate collateral. H. E. McCain associate of Adams; numerous transactions in NBL and Olympic stock; has purchased securities at request of Adams and other defendants. THE FORMER DEFENDANTS: Joseph Novotny president of SSB 1968-70, foimer executive vice-president of SRC; in May, 1970, became president of CB&T and chairman of the board of DB&T. Also a director and member of the executive and finance committees of NBL and trustee for the NBL Plan. Sharp’s right-hand man. CB&T and DB&T Dallas Bank & Trust Co. and City Bank & Trust Co. in Dallas are both bank chartered by’ the state of Texas. They are controlled by Frank Sharp and owned by Nashwood due to a series of maneuvers that will make your head swim. SUPPORTING PLAYERS: Preston Smith Governor of Texas. Dr. Elmer Baum friend’and business partner of Smith, member of the State Banking Commission, chairman of the State Democratic Party. Gus Mutscher, Jr. speaker of the Texas House of Representatives. Gus Mutscher, Sr. father of Junior. S. Rush McGinty aide to Mutscher. F. T. Schulte same. Tommy Shannon chairman of the House Administration Committee. Bill Heatly chairman of the House Appropriations Committee. Ben Barnes Lieutenant Governor of Texas. The Fathers Jesuit Fathers of Houston, Inc., a non-profit corporation organized to construct and operate Strake Jesuit College Prepatory in Houston. Father Michael Kennelly president of Loyala University in New Orleans and former president of Strake Jesuit. The Pope a man who knows Frank Sharp. Claude Hooten, Jr. son-in-law of Frank Sharp, close friend and former roommate of Sen. Edward Kennedy, now in Paris, France, working for IBM, formerly with the Sharp empire, made some NBL stock transactions. Will Wilson former Atty. Gen. of Texas, now U.S. Asst. Atty. Gen., used to be Frank Sharp’s lawyer and made a lot of introductions. Jake Jacobsen crony of Lyndon Johnson’s, bought CB&T on Jan. 28, 1971, and played liaison role in The Plot, partner of Shivers. Michael Angelo Socrates Makris twice-convicted of securities frauds, currently under indictment for perjury, told Sharp and Kennelly that he could, for a small fee, obtain securities in Switzerland worth $200 million. Was at the time an employee of the Tidy Didy Diaper Service. Ling & Co. a Dallas stock brokerage firm headed by Michael Ling, brother of James Ling as in Ling-Temco-Vought. Ling & Co. made the market in NBL, MCI and Olympic stock and brokered NDC stock. The company served as the conduit for the transactions which drove up the price of the stocks. NDC National Data Communications, Inc., headed by Tommy Butler. NDC stock keeps popping up in the hands of Osorio, Barnes, 011ie Crawford and any number of unlikely people. Dr. Robert Franklin a man who keeps appearing; president of Nashwood and partner with Osorio in CB&T. Dallas Johnson an ex-FBI agent who wound up as chairman of the board and chief executive officer of SSB and then talked about it; Jake Jacobsen got him the job. Joe Ridings one of Sharp’s attorneys. Sandpiper Corp. a Sharp company. And a Cast of Thousands Wheeling & dealing In the dream my head whirled like a spoke. It was like the double play I never was in, the pivot My legs never could stand; And the throw my abscessed arm Never could make on a day In Michigan when the summer Implored. It was like All those chained imprisonments And the freedom they built up, Guarantors of the dream In their niggling way. For I made the pivot, as it were; I got the outs for sure; And my arm from lazy might Threw cleanly the ball from the outfield To home in Michigan. GEORGE W. DE SCHWEINITZ Beaumont