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The U.S. Attorney's office in Buffalo might pursue criminal charges against a local lawyer and his brother-in-law, who agreed to a civil settlement in an insider stock-trading case earlier this month.

"We are taking a very hard look at the possibility of criminal charges in this matter," said U.S. Attorney Dennis Vacco.

The attorney, Henry M. Porter of Lippes Kaminsky Silverstein Porter Mathias and Wexler, and his brother-in-law, William Wolski, signed consent agreements May 10 to settle the Securities and Exchange Commission complaint about their stock-trading practices.

Without admitting or denying guilt, Porter and Wolski agreed to pay more than $230,000 in returned profits and fines to resolve the matter with the SEC.

The agency had accused Porter of passing secret information to Wolski regarding the takeover targets of Mark IV Industries Inc. of Amherst. The SEC charged that both men profited from that inside information, which Porter obtained through his legal work for Mark IV.

The civil settlement does not preclude criminal action in the case. To that end, Vacco said he is sending two assistants to New York Thursday to talk to SEC lawyers about Porter and Wolski. Those assistants are Kathleen M. Mehltretter, chief of the criminal division for Vacco's office, and Mark S. Perla.

"The final determination (on possible criminal action) will be made sometime after that meeting," Vacco said.

Vacco would not rule out the possibility of mail fraud charges in the case. Mail fraud is one of the more common charges leveled in criminal prosecutions of insider trading cases.

"From the perspective of the dollars involved, it is a serious matter," Vacco added. "Porter was in a position of trust, which exaggerates the situation."

Porter and Wolski could not be reached for comment. But Gerald S. Lippes, one of Porter's law partners, defended Porter, who is still working at the law firm.

"Mr. Porter has assured me that there has been no criminal violation in this case," Lippes said. "I'm satisfied that he hasn't done anything illegal."

The possibility of criminal charges is just one of the loose ends left after the SEC settled its case against Porter and Wolski.

Also unclear is whether the case eventually could lead to Porter's being disbarred.

David E. Brennan, chief attorney with the Office of Grievance Committees of the Fourth Judicial Department, would not comment on the disbarment procedure. But other attorneys familiar with SEC matters said Porter probably would not be disbarred unless convicted of a crime.

"I've never heard of a disbarment on a civil settlement," said Jeffrey S. Rosen, a Washington attorney formerly with the SEC.

Meanwhile, Internal Revenue Service spokesmen in Buffalo and Hartford, Conn., would not comment on whether the IRS is investigating the tax consequences of the inside trades. The spokesmen said the IRS only comments if it has resolved a case against a taxpayer.

Tax consequences could result from the insider trading case particularly because the SEC accused Wolski of making stock purchases in an account with a false Social Security number.

Under the agreement with the SEC, Porter agreed to pay back $37,021.41 in illegal profits he made in 1984 through the trading of LFE Corp. stock, along with a fine of an equal amount.

Wolski agreed to return $78,080.96 in illegal profits he made through trading LFE and Gulton Industries Inc. stock from 1984 through 1986. Wolski also agreed to pay a fine equal to the amount of his illegal profits.

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