FDIC proposes S&L stock rulesA second federal agency...


June 01, 1994

FDIC proposes S&L stock rules

A second federal agency proposed rules yesterday aimed at limiting windfall profits for insiders when depositor-owned savings and loan institutions offer stock to the public.

Under pressure from Congress, the Federal Deposit Insurance Corp. joined the Office of Thrift Supervision in cracking down on abuses when the so-called mutual S&Ls go public.

The rules are aimed at S&L managers who reap excessive gains by setting the stock offering price well below the value of the institution so that it rises rapidly after stock is sold to the public.

The proposed FDIC rules, along with the OTS regulations, would ban so-called running proxies -- those obtained from depositors when an account is opened and used subsequently by managers without further authorization.

Also, the rules would require full appraisals of the market value of converting S&Ls and would give local depositors who have held accounts at a converting institution for at least one year first priority to purchase conversion stock.

Westinghouse to cut new unit

Westinghouse Electric Corp. completed its purchase yesterday of Norden Systems Inc., the defense electronics arm of United Technologies Inc., and immediately announced plans to lay off workers at the defense contractor's plants in Norwalk, Conn. and Melville, N.Y. The purchase price was not disclosed.

The unit's name will be changed to Westinghouse Norden Systems, and it will be a wholly owned subsidiary of the Westinghouse Electronic Systems business unit, based in Linthicum. The former Norden unit has about 1,540 workers at its two plants. Westinghouse said it was too soon to determine how many people will lose their jobs.

American National reports gain

American National Savings Bank F.S.B. of Baltimore reported earnings of $340,000, or 17 cents a share, for the quarter that ended April 30, compared with a loss of $1 million for the same period last year. Per-share earnings weren't reported a year ago because the company didn't complete its initial stock offering until November.

Most of the improvement was due to an $813,000 decrease in the amount set aside to cover future loan losses. The company has nine branches and $401.8 million in assets.

Blockbuster to test game software

Sega of America, a unit of Sega Enterprises Ltd. of Japan, said yesterday it has an agreement with NewLeaf Entertainment to test market an entertainment software delivery system in pTC Blockbuster Entertainment Corp. video stores this summer.

Sega said the system permits video game software to be stored electronically at retail stores and downloaded on demand onto specifically designed cartridges.

The cartridges are rented to customers and can be reprogrammed by the store.

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