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SEC Bars Two For Misleading Sales of Towers Financial Bonds

January 2, 1996

WASHINGTON (AP) _ The Securities and Exchange Commission barred from the industry two securities brokers amid charges they misled investors about the safety of millions of dollars of Towers Financial Corp. bonds.

The SEC said Tuesday that James McCurry, former compliance officer and operations manager of Biedenharn Investment Group Inc., and William E. Powdrill III, a former broker with the firm, agreed to the lifelong penalty without admitting or denying wrongdoing. Biedenharn, the SEC said, folded in 1993.

In addition, the SEC announced a U.S. District Court judge issued a permanent injunction on Dec. 19 against the two, which could result in jail time if they violate securities laws in the future.

Towers Financial has been the target of SEC investigations for several years. In April 1995, Towers’ founder, Steven Hoffenberg, pleaded guilty to charges of conspiracy, securities fraud and tax evasion related to the misleading financial statements.

In addition, Hoffenberg agreed to pay $60 million last year to settle an SEC civil case against him. Hoffenberg is perhaps best known for an ill-fated attempt in 1993 to purchase the New York Post.

The SEC’s latest case charged McCurry and Powdrill with participating in the sale of $12.8 million worth of notes issued by Towers Financial and Towers Credit Corp. The agency said an offer to sell the notes contained ``materially misleading statements to investors concerning the relative safety of an investment in Towers notes.″

The agency said $5.2 million of those bonds subsequently defaulted. Neither man was assessed a financial penalty due to their financial condition, the SEC said.

Telephone calls placed to attorneys for McCurry and Powdrill weren’t immediately returned.

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