Word: huttons
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...check-kiting scheme, several bank accounts were played off against one another to avoid bouncing any checks and to gain, in effect, interest-free loans. Hutton's scheme was illegal because the overdrafting was so consistent and the amounts involved so excessive. The maneuvers, which took place over a 20 month period beginning in July 1980, involved checks totaling about $10 billion. On some days, Hutton enjoyed $250 million in interest-free loans...
...still remains unclear who condoned the practice, which was carried out by at least 23 Hutton branch offices. Hutton Chairman Robert Fomon defends his senior officers. Says he: "I have no reason to believe that any members of top management were involved...
...month ago, however, materials surfaced that may lead to evidence that Ball, Hutton's president from 1977 to 1982, was implicated. He left the firm in 1982 to become president of Prudential-Bache. Last month a House Judiciary subcommittee produced internal Hutton documents suggesting that Ball was aware of the practice. A memo sent in November 1981 to Ball by Linda Curtiss, an executive, de scribed "disproportionately high interest. . . from aggressive overdrafting with several branches in the Washington, D.C., area." But Ball has denied receiving the correspondence. Confusion arose, Ball said, because a memo dated March 1982, which mentioned...
Fomon stands by Ball, stating that the documents do not offer "concrete evidence" that the former Hutton executive knew about any illegalities. Ball says that "a careful reading" of the documents "vindicates me and substantiates the position that I had no knowledge of any improper acts...
Controversy swirls around the Justice Department's handling of the case. Some industry observers and legal experts were surprised by the department's decision not to cite individual Hutton employees in the May indictment. Fomon conceded to the New York Times that he was wrong to accept the terms of the May settlement. Said he: "If I had to do it over again . . . the individuals involved would have stood by themselves." Some members of Congress say that Justice's investigation of the case was superficial. Those complaints led the House subcommittee to begin its own probe. Attorney General Edwin Meese...