2 Md. businessmen charged with insider trading

October 19, 1990

The president and a former executive vice president of a Landover-based Insituform East Inc. were indicted Wednesday and charged with insider trading and fraud in connection with an alleged 1986 scheme to distort the company's finances to keep the price of its stock artificially high.

The 14-count indictment also included charges of conspiracy and making false statements, lodged against company president Arthur Lang, 41, of Mitchellville and Thomas Trexler, 41, of Kensington, who left the company in 1988.

Insituform repairs underground sewer systems by lining old pipes with special tubing.

U.S. Attorney Breckinridge L. Willcox said the indictment charges that the two men disclosed financial information based on false and fraudulent accounting entries, which made it seem as if the company was boosting its revenues and reducing its expenses. The fraud allegedly concealed a $338,921 loss during the third quarter of fiscal 1986.

The two men then sold some of their Insituform stock, grossing more than $3.7 million between them, at a price the U.S. attorney contends was fraudulently high because accurate financial data had not been released. That is the basis of the insider-trading charge, the first ever filed in the District of Maryland.

Stephen H. Sachs, an attorney for Mr. Trexler, dismissed the charges as a 4-year-old accounting dispute. Attorneys for both men said they would plead not guilty.

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