SEC MOVES TO DISCIPLINE ALLEGHENY INT'L <AG>
The Securities and Exchange
Commission (SEC) staff is seeking authority to take enforcement
action against Allegheny International Inc, the
Pittsburgh-based industrial and consumer products firm said.
    Allegheny made the disclosure in documents filed with the
SEC in connection with its recent agreement to be taken private
through a leveraged buyout led by First Boston Inc.
    "Following announcement of the merger agreement, the company
was informed by the Enforcement Division of the (SEC) that it
intends to seek authority from the commission to institute a
proceeding against the company," Allegheny said.
    "The company is cooperating in the commission's
investigation which is continuing and now includes the taking
of testimony of employes and others," Allegheny said.
    In the ongoing probe, Allegheny said, the staff has asked
for information about company executive compensation and
benefit plans, certain company-owned real estate, travel and
entertainment spending and the use of corporate aircraft.
    It also has asked for information on acquisitions and
divestitures, the company's accounting system "and other
internal controls," Allegheny said.
   The probe began in February 1986, Allegheny said.
    The SEC, as a matter of policy, routinely declines comment
on its enforcement actions.
    The SEC investigation began just months before Allegheny
became the target of a series of shareholder lawsuits claiming
that the company had violated the federal securities laws by
failing to disclose material matters in recent annual proxy
statements.
    The suits, later consolidated into a single class-action
complaint before a Pennsylvania federal court, allege
securities law violations involving numerous current and former
Allegheny officers and directors.
    Earlier this month, lawyers for the shareholders asked the
court to expand the charges to include an allegation that, in
the buyout, Allegheny had attempted to illegally freeze out its
public shareholders at an unfair price.
    Allegheny said it intends to vigorously defend itself
against all charges.
    The charges made in the shareholder suits are widely
believed to have led to last summer's resignation of Chairman
and Chief Executive Officer Robert Buckley.
    In the buyout, a group led by First Boston tendered March
13 for all outstanding Allegheny shares at 24.60 dlrs a share.
 Reuter
