A Florida man who made mysterious billion-dollar offers for all stock in Eastman Kodak Co. and the parent of American Airlines has no assets to make the purchases, is on probation from past fraud convictions and is barred from serving as a corporate officer, according to a Securities and Exchange Commission lawsuit.
The March offers from 45-year-old Allen E. Weintraub and his company, Sterling Global Holdings, generated numerous news accounts that in turn affected company stock prices, the SEC said. The civil lawsuit filed Tuesday asks a federal judge to stop Weintraub from pursuing these deals or any future transactions, and says financial penalties could be imposed.
"Weintraub and Sterling Global have substantially no assets," the SEC lawsuit says.
A telephone message left for Weintraub was not immediately returned Wednesday. Court records did not indicate whether he had a lawyer in the SEC case.
According to the SEC, on March 19 Weintraub emailed Rochester, N.Y.-based Kodak board members and officers an offer to buy more than 268 million shares of stock for about $4.81 a share, or about $1.3 billion at the time. The email falsely listed Sterling Global as having offices in Atlanta, Cleveland, Denver, Dubai, London, Los Angeles, Miami, New York and Tel Aviv, the lawsuit says.
In fact, the inactive company's address is in Boynton Beach, Fla., and the stock offer listed a mail drop in Davie, Fla.
The offer for stock in AMR Corp., the Fort Worth, Texas-based American Airlines parent, came on March 29 in similar fashion: Weintraub would pay $9.75 a share for more than 333 million shares, or about $3.25 billion at the time.
"Attached is our tender offer to take AMR private. Please review. I beleive (sic) as a large shareholder this is in the best interest for all our shareholders and management," the email said.
The email was also sent to numerous media outlets, which produced news stories the SEC said caused fluctuations in AMR's stock prices and trading volume.
Kodak declined comment Wednesday. An AMR spokesman said the company investigated the legitimacy of the offer and turned the matter over to the SEC.
Weintraub has three previous Florida convictions for fraud and grand larceny, according to corrections department records. He was released from prison most recently in 2008 and is serving 10 years' probation.
The SEC says Weintraub declared bankruptcy in 2007 and still owes a judgment of over $1 million from a previous, unrelated SEC lawsuit.
Curt Anderson can be reached at http://twitter.com/Miamicurt