Charles F. Fogarty Obituary
6 TEXASGULF EXECUTIVES VICTIMS OF PLANE CRASH: CHARLES F. FOGARTY, 59,
(The New York Times); Obituary
February 13, 1981, Friday
Late City Final Edition, Section B, Page 2, Column 1, 359 words
BOARD CHAIRMAN Charles F. Fogarty was chairman of the board and chief executive officer of Texasgulf Inc. a worldwide oil and mining concern with headquarters in Stamford, Conn. Mr. Fogarty, who lived in Darien, Conn., was 59 years old. He joined the company on June 1, 1952, in Houston ...
Salt Lake City Is the Industrial Banking Center of the US
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Overview
It is also the largest industrial banking center in the United States.[1] The city is known as the "Crossroads of the West" for its central geography in the Census defined western United States. Salt Lake is about an equal distance from Los Angeles, Denver, San Francisco, Portland, Phoenix, and Seattle. As a result, Interstate 15 is a major corridor for freight traffic and the area is host to many regional centers such as Dannon Yogurt and Sysco.
Industrial banking
An industrial loan company (ILC) or industrial bank is a financial institution in the United States that lends money, and may be owned by non-financial institutions. Though such banks offer FDIC-insured deposits and are subject to FDIC and state regulator oversight, a debate exists to allow parent companies such as Wal-Mart to remain unregulated by the financial regulators. "FDIC-insured entities are subject to Sections 23A and 23B of the Federal Reserve Act, which limits bank transactions with affiliates, including the parent company." (FDIC.gov) The ILC is permitted to have branches in multiple states (which is permitted by many states on a reciprocal basis). They are state-chartered, and insured by the Federal Deposit Insurance Corporation. They are currently chartered by seven states, with most chartered by Utah. Other states permitting them include California, Colorado, Minnesota, Indiana, Hawaii, and Nevada.
Charles Fogarty
National Mining Hall of Fame and Museum - Leadville,... - [Cached Version]
Published on: 2/24/2010 Last Visited: 2/24/2010
Fogarty, Dr. Charles F. National Mining Hall of Fame and Museum - Leadville, Colorado, minerals, gems, history
National Mining Hall of Fame and Museum - Leadville, Colorado, minerals, gems, history
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Fogarty, Dr. Charles F.
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Name:Fogarty, Dr. Charles F.
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Dr. Charles Fogarty, an expert petroleum geologist, was instrumental in moving Texasgulf into its prominent position as an industry leader. e promoted technological advances and set an excellent example for all mining executives.
In 1952, after receiving his Doctorate in Geology from the Colorado School of Mines, he went to work for Texasgulf. e spent most of his early years on exploration assignments throughout the world. y 1973 he had reached the status of CEO.
SILVER INVESTOR - [Cached Version]
Published on: 6/14/2004 Last Visited: 10/4/2005
Ironically, by the mid-1970's, George Eccles was a director of Texas Gulf Sulphur, which had silver interests at the Kidd Creek mine in Ontario, Canada. Other Texas Gulf directors included Allan Shivers, once governor of Texas, and George Herbert Walker Bush, who became President and now we have his junior as President. (Strangely, in January 1981, Charles Fogarty CEO of Texas Gulf and five other top executives---but no board members---were killed in a plane crash.
Trading Article - Insider Trading in the Stock Market - [Cached Version]
Published on: 3/22/2006 Last Visited: 2/10/2010
Fogarty, an executive vice president of Texas Gulf, knew that the company had discovered a rich mineral lode in Ontario that it could not publicize before concluding leases for mineral rights.
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Interestingly, Texas Gulf insider Charles Fogarty was subsequently elevated to chief executive officer of his company.
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For example, if Fogarty had purchased Ontario mineral rights before Texas Gulf Sulphur agents could acquire them, Texas Gulf would have been injured.
Texas Gulf Inc.
Charles Fogarty in court
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Texas Gulf Sulphur Company, a Texas Corporation, and Charlesf. Fogarty, Petitioners, v. the Honorable Willis W. Ritter, Chief Judge of the Unitedstates District Court for the District of Utah,and George Gordon Reynolds, Respondents
United States Court of Appeals Tenth Circuit. - 371 F.2d 145
Jan. 3, 1967
Texas Gulf Sulphur Company
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TGS became known as Texasgulf, Incorporated, in April 1972. By the mid-1970s, two-thirds of Texasgulf's operating income was derived from its Canadian mines, and half of its employees were Canadian. However, the corporation had only one Canadian on its board of directors. In this context the Canadian Development Corporation, a company chartered by the Canadian government to oversee and protect Canada's natural resources, attempted a hostile take-over bid in 1973. CDC offered to buy ten million shares of Texasgulf at $29 a share. The $290 million offer would have given CDC controlling interest. Texasgulf went to federal court to prevent the take-over. Delays and confusion followed. In the end CDC purchased more than eight million shares (roughly 30 percent of Texasgulf stock). Management, led by Charles Fogarty, capitulated and put four CDC members on the Texasgulf board. Texasgulf then prospered. In 1980 it realized a net income of $325.6 million. Its directors included R. Allan Shivers, George H. W. Bush, George Brown, and Pierre Cote. The number of its employees rose to 6,480 and its common shareowners to 53,795. In 1980 Texasgulf produced 1,528,100 tons of sulfur in the United States and Canada, and its Mexican affiliate produced 551,300 tons. (Texas sulfur reserves are estimated at 15.1 million long tons; Mexican reserves at 19.3 million.) The company owned 2,100 railroad cars for transporting superphosphoric acid and liquid sulfur.
In January 1981, CEO Charles Fogarty died in a plane crash along with five other top executives of the company. Five months later, Elf Aquitaine, a French development corporation, acquired ownership of Texasgulf in a $5 billion deal. In order to finance the purchase, Elf Aquitaine sold the Canadian mining operations (50 percent of Texasgulf's assets) to the Canadian Development Corporation. Elf Aquitaine later sold interest in Texasgulf to Williams Companies of Tulsa, Oklahoma. Texasgulf was left to focus on sulfur production and the company's oil and gas interests. In 1984 the company completed a seventy-megawatt cogenerating plant at Newgulf to supply power to generate steam for the Frasch mining at the Boling Dome and other operations. By the early 1990s the fertilizer industry used 75 percent of sulfur produced. Sulfur recovery from sour gas and oil at refineries and gas-processing plants amounted to 60 percent of all sulfur production. In 1992 the Texasgulf plant at Newgulf, the former headquarters, produced approximately 300 long tons of sulfur a day. Although Texas remains in the title, company properties and activities are worldwide. In 1995 Potash Corporation of Saskatchewan purchased Texasgulf for more than $800 million.
Fortune Magazine Options Scandals
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Sleazy CEOs have even more options tricks
Backdating may be just the beginning: A lot of other suspicious stuff tends to happen when companies grant options.
By Justin Fox, Fortune editor-at-large
November 14 2006: 4:42 PM EST
(Fortune Magazine) -- It is never really a shock to find executives enriching themselves at shareholders' expense. It can sometimes be surprising, though, just how clear the evidence is, and how long it takes us to notice.
Take the options-backdating scandal that has claimed such CEO scalps as that of Comverse's (Charts) Kobi Alexander (currently fighting extradition from Namibia), UnitedHealth's (Charts) William McGuire (ousted after 14 years of spectacular success) or KB Home's (Charts) Bruce Karatz (who voluntarily stepped down and agreed to pay the difference for incorrectly priced grants).
Short the CEO - Buy the Stock?
Kobi Alexander, former CEO of Comverse, fled to Namibia to avoid prosecution.
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The scandal has its roots in a 1992 SEC decree that companies list in their annual proxy statements the exact dates that they gave stock options to top executives. The dates had been disclosed before, but only in mailed-in filings that no one ever looked at.
David Yermack
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Until recently, financial research has been puzzled by an unusual pattern of stock returns during the period surrounding stock option grant dates for CEOs and other top executives. David Yermack ("Good Timing: CEO Stock Option Awards and Company News Announcements," Journal of Finance, vol. 52, no. 2, June 1997) and Keith W. Chauvin and Catherine Shenoy ("Stock Price Decreases Prior To Executive Stock Option Grants," Journal of Corporate Finance, vol. 7, no. 1, March 2001) first documented that stock prices tend to fall in the period before, and rise in the period following, employee stock option grant dates. Such circumstantial evidence suggested that companies withhold good news or publish bad news prior to long-term employee stock option awards to reduce stock prices. Erik lie ("On the Timing of CEO Stock Option Awards," Management Science, vol. 51, no. 5, May 2005) dug deeper into this phenomenon, documenting an unusual pattern of negative returns prior to option-award grant dates that reversed in the post-grant date period. lie concluded: "Unless executives have an informational advantage that allows them to develop superior forecasts regarding the future market movements that drive these predicted returns, the results suggest that the official grant date must have been set retroactively" (emphasis added). In solving this financial puzzle, lie touched off a firestorm with immediate and far-reaching public-policy implications.
Canary Scandal
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How It Hurt Small Investors
The practices that Canary Capital and its partners in crime engaged in cost investors a lot of money. According to Stanford economist Eric Zitzewitz, late trading alone may cost shareholders as much as $400 million in a year. Because all investors in a fund share in the cost of the fund's transactions, the rapid-fire trading involved in market timing spreads costs across all the fund's investors. Canary Capital and other large institutional investors profited from these behaviors, leaving long-term mutual fund investors with the bill.
More on Funds Scandals
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WHY WOULD MUTUAL FUND MANAGERS ALLOW THIS?
Fund managers, being fiduciaries for their investors, are supposed to do their best to protect their customers from the dilution that late trading and market timing cause. So why would fund managers allow late trading and rapid timing transactions to occur? It's all about the money. A hedge fund, such as Canary, makes sure that the illegal transactions that harm fund shareholders is worthwhile, financially speaking, for fund managers. Fund management fees increase with increased assets, and Canary was providing just that, investing millions of dollars in a long-term security while rapidly trading in and out of separate funds.
Peter Elkind describes how it works in his recent article in Fortune magazine:
Market-timing hedge funds ... negotiated secret 'capacity' arrangements in which they gained the right to run a predetermined amount of money in and out of a fund and were exempted from short-term redemption fees. In return, the market timer handed over a second predetermined amount of money to the fund company—'sticky assets,' which sat quietly and generated extra management fees for the fund complex (114).
Therefore, managers at certain fund companies were profiting at the expense of their buy-and-hold shareholders.
HOW CANARY DID IT
History of Scandals
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SECURITIES FRAUD - Business History of Insider Trading, Compliance Violation, Stock Price Manipulation, Enterprise Corruption
1913 - Ivar Kreuger formed Svenska Tändsticks Aktiebolaget, STAB (Swedish Match Company); lent over $300 million dollars to governments in Europe, Latin America, and Asia in exchange for national match monopolies; became world's largest match manufacturer; built small, family-owned match business into a $600 million global match empire; owned manufacturing operations in 36 countries, had monopolies in 16 countries, controlled 40% of the world's match production; relied on international capital markets to finance acquisitions and monopoly deals; 1929 - Kreuger company stocks and bonds were most widely held securities in United States and world; 1932 - Krueger died in Paris (suicide?); forensic auditors discovered giant pyramid scheme; Kreuger accounts hid fictitious assets in maze of over 400 subsidiary companies; Swedish Match's deficits exceeded Sweden's national debt.
August 13, 1920 - Thousands of investors demanded their money back from Carlo Ponzi. Anticipating the collapse, had already attempted to gamble with the $2 million in a vain attempt to make up the lost money. Ponzi went to jail and was deported to Italy in 1934. He told reporters, "I hope the world forgives me." 1919 - told friends and potential investors that they would get a 50 percent return on their money within 90 days if they invested with him. The hapless investors were never told much about what Ponzi planned on doing with their money, but, when pressed, he told them that it had to do with international postal exchange coupons, an obscure field that virtually no one knew much about. Paid off his initial investors and soon the investment dollars were pouring in. Thousands of people came to his offices, where money was stuffed in every desk drawer and filing cabinet. Ponzi was taking in an estimated $200,000 a day at the frenzy's peak. When a local writer questioned Ponzi's financial record, he threatened to sue and scared off further inquiry. When state investigators finally began examining his books and interviewing his workers they found that there was no real investment going on. Of course, only the very early investors actually got any money back, and these funds came from later investors.
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