SEC Sues Chief of Global Airlines Over Fake Buyout Plans for Two Major Airlines
NEW YORK (AP) -- The government sued the head of a holding company Monday, accusing him of hyping fake buyout offers for two major airlines -- even using a phony name -- in a scheme that deceived investors.
The Securities and Exchange Commission sought an unspecified fine in its civil lawsuit against Emil Bernard, 50, the CEO of a company called Global Airlines Corp. that has no apparent airline experience.
The suit claims Bernard issued false press releases, lied in interviews and adopted the fake name John Scott as he claimed Global was close to buying Trans World Airlines in 2000 and US Airways in 2001.
Neither airline appeared to take the offers seriously. But shares of TWA jumped more than 60 percent in a single day on the buyout publicity, and US Airways stock rose 11 percent in one day on the news.
Bernard did not immediately return a telephone call for comment.
The suit did not address Bernard''s motives for the alleged securities fraud. It made no mention of his owning stock in either TWA or US Airways, which would have allowed him to profit from the sudden jumps in price.
An SEC spokeswoman did not immediately return a call for comment.
Bernard and John Scott were quoted in various news reports from June to November 2000, portraying Global as nearing an acquisition of TWA, the suit says. In one case, a John Scott was quoted as saying, We expect the deal to close.
AMR Corp., the parent of American Airlines, bought TWA in 2001.
In early August 2001, the suit claims, Bernard gave interviews with Bloomberg News, cable channel CNNfn and The Associated Press portraying Global as close to acquiring US Airways.
A story on AP''s national financial wire on Aug. 5, 2001, quoted John Scott as saying Global, which had tried unsuccessfully to buy TWA, had launched a $1.8 billion offer for US Airways and expected federal regulatory approval to complete the deal by the end of that year.
A followup story the next day reported that US Airways dismissed the Global offer. A US Airways statement said neither Mr. Bernard nor his company has established any meaningful credentials in support of their so-called proposal.
Previous AP stories in New Hampshire and St. Louis in June and July 2000 noted that Global had no aircraft, flight crews, routes or gate space at any airport and had not filed for certification with the Department of Transportation.
US Airways eventually filed for bankruptcy. It emerged from bankruptcy Monday after just eight months, surprising industry analysts who had expected a corporate reorganization to take much longer.
The SEC suit was filed in Manhattan federal court.
NEW YORK (AP) -- The government sued the head of a holding company Monday, accusing him of hyping fake buyout offers for two major airlines -- even using a phony name -- in a scheme that deceived investors.
The Securities and Exchange Commission sought an unspecified fine in its civil lawsuit against Emil Bernard, 50, the CEO of a company called Global Airlines Corp. that has no apparent airline experience.
The suit claims Bernard issued false press releases, lied in interviews and adopted the fake name John Scott as he claimed Global was close to buying Trans World Airlines in 2000 and US Airways in 2001.
Neither airline appeared to take the offers seriously. But shares of TWA jumped more than 60 percent in a single day on the buyout publicity, and US Airways stock rose 11 percent in one day on the news.
Bernard did not immediately return a telephone call for comment.
The suit did not address Bernard''s motives for the alleged securities fraud. It made no mention of his owning stock in either TWA or US Airways, which would have allowed him to profit from the sudden jumps in price.
An SEC spokeswoman did not immediately return a call for comment.
Bernard and John Scott were quoted in various news reports from June to November 2000, portraying Global as nearing an acquisition of TWA, the suit says. In one case, a John Scott was quoted as saying, We expect the deal to close.
AMR Corp., the parent of American Airlines, bought TWA in 2001.
In early August 2001, the suit claims, Bernard gave interviews with Bloomberg News, cable channel CNNfn and The Associated Press portraying Global as close to acquiring US Airways.
A story on AP''s national financial wire on Aug. 5, 2001, quoted John Scott as saying Global, which had tried unsuccessfully to buy TWA, had launched a $1.8 billion offer for US Airways and expected federal regulatory approval to complete the deal by the end of that year.
A followup story the next day reported that US Airways dismissed the Global offer. A US Airways statement said neither Mr. Bernard nor his company has established any meaningful credentials in support of their so-called proposal.
Previous AP stories in New Hampshire and St. Louis in June and July 2000 noted that Global had no aircraft, flight crews, routes or gate space at any airport and had not filed for certification with the Department of Transportation.
US Airways eventually filed for bankruptcy. It emerged from bankruptcy Monday after just eight months, surprising industry analysts who had expected a corporate reorganization to take much longer.
The SEC suit was filed in Manhattan federal court.
