Sunday, October 28, 2012

Court Unseals Testimony In Divorce Trial: Did Rmoney Lie Under Oath To Protect Friend's Financial Interests?

From Laura Gottesdiener at AlterNet:
Breaking Update: Court Unseals Potentially Devastating Testimony --
Romney Said Stocks Sold at 1/10th of Eventual Value Was 'Good Price'
Romney does appear to have covered for his friend.
October 25, 2012 |

[AlterNet] Editor's Update: The Boston Globe reports: "Mitt Romney testified under oath in 1991 that the ex-wife of Staples founder Tom Stemberg got a fair deal in the couple’s 1988 divorce, even though the company shares Maureen Sullivan Stemberg received were valued at a tenth of Staples’ stock price on the day of its initial public offering only a year later. At the time the Stembergs split, Romney suggested, there was little indication that Staples’ value would soon skyrocket. Romney’s testimony in a post-divorce lawsuit brought in 1990 by Sullivan Stemberg was unsealed on Thursday in Norfolk Probate and Family Court at the Globe’s request. Sullivan Stemberg sued unsuccessfully to amend the couple’s financial agreement after Staples went public in 1989 and closed its first day of trading at $22.50 per share, 10 times the value she had received."

According to the Globe, Sullivan Stemberg sold 175,000 shares of Staples stock at $2.25 per share, and sold 80,000 shares at $2.48 a few months later. “In my opinion, that’s a good price to sell the securities at,” Romney testified. "But on April 28, 1989, barely a year after Sullivan Stemberg sold more than half of her shares on the premise that they were worth less than $2.50 apiece, the company made its initial public offering at $19 per share and ended its first day at $22.50," the Globe reports.

I'm not an expert on investments, but this sounds like fraud coupled with a kind of insider trading: perhaps Rmoney knew of the firm's intent to go public at a dramatically higher price, and testified otherwise to save his buddy some money in the divorce. It also sounds as if it might be a very difficult thing to prove.

I'm convinced that guys (it's always guys) at Rmoney's high-rolling level do this sort of thing, and get away with it, all the time. There are probably few large financial transactions that would bear close scrutiny, but an overwhelming majority of them take place under no scrutiny at all. Even now, 20 years after the divorce, Rmoney could probably get away with an "everybody does it" argument. Or maybe not. Again from the AlterNet article:
In the testimony, however, Romney allegedly lied about the future of the company, saying it was “overvalued” and that Stemberg was a “dreamer” for thinking the company could grow large. As a result, Maureen received very little in the divorce settlement--only to learn that her husband and his cohort Mitt Romney quickly turned around and cashed in their own stocks in Staples for a small fortune right after the divorce was finalized.
Women, including those who routinely vote, are not keen on being ripped off in divorce settlements, and their empathy with other women in this matter is often understandably high. Rmoney has enough (pardon the expression) woman troubles already, without this. I've no idea how it will turn out, but it may be in the news, despite its being unfavorable to Rmoney, because the case has all the other ingredients: popular office supply store Staples, celebrity divorce lawyer Gloria Allred, Mittens, money, power, and legally questionable activity. How could a gossip-seeker ask for more?

No comments:

Post a Comment


• Click here to view existing comments.
• Or enter your new rhyme or reason
in the new comment box here.
• Or click the first Reply link below an existing
comment or reply and type in the
new reply box provided.
• Scrolling manually up and down the page
is also OK.

Static Pages (About, Quotes, etc.)

No Police Like H•lmes