Ex-La Gear Officials Settle Allegations

Sat., April 1, 1995

From Staff And Wire Reports

Two former top officials of LA Gear will pay more than $1 million to settle federal allegations they inflated the company’s earnings in 1990 then profited from stock trades.

The settlement, announced Thursday by the federal Securities and Exchange Commission, stems from a civil complaint filed in U.S. District Court against Gilbert Schwartzberg and Arden Franklin.

Schwartzberg was LA Gear’s chief administrative officer and Franklin was its controller. Both were charged with insider trading and falsifying records.

The SEC alleged the men inflated LA Gear’s stock for the quarter ended in February 1990. When the company announced earnings that were overstated by 40 percent, Schwartzberg and Franklin allegedly sold their own stock at the inflated prices.

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Ex-La Gear Officials Settle Allegations

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