The former head of the Pennichuck Corporation has agreed to pay 270,000 dollars as part of a settlement with federal and state securities regulators.
Regulators have also banned him from ever again heading a corporation anywhere in the country.
New Hampshire Public Radio's David Darman has more.
Former Pennichuck chief executive Maurice Arel agreed to the settlement without admitting any wrongdoing.
But regulators from the Securities and Exchange Commission and New Hampshire's Secretary of State say Arel illegally enriched himself through cozy land deals and hidden related party transactions.
Mark Connolly is New Hampshire's director of Securities Regulation.
he used his position as chief executive officer to obtain personal, valuable benefits. benefits that were not adequately disclosed. as a result, mr arel will be barred from serving as a director or officer of a publicly traded partnership going forward.
Regulators allege that under Arel's watch, Pennichuck failed to disclose to shareholders its almost exclusive arrangement to develop real estate holdings with just one developer.
Those dealings also resulted in Arel purchasing a house in 1998, for far less than fair market value.
Regulators also found that Arel had failed to disclose that over 800,000 dollars in landscaping business went to his son's company, without competitive bidding.
Walter Ricciardi is the Securities and Exchange Commission Bureau chief in Boston.
He says by law, management legally must tell shareholders about arrangements like these.
does this company hire the best landscaper they can find, or does this company hire relatives? and if you're investing your life savings in a public company to decide whether or not this is the right company for you. you ought to know whetehr they're hiring relatives. and if you don't do that, that's securities fraud, and that's what this action is about.
Maurice Arel would not publicly comment on the settlement.
And his attorney, Steve Gordon says the settlement limits what Arel can say about the case.
He points out that Arel served as the head of the company for almost 20 years, so the settlement is an unfortunate end to his long career.
well, anytime there's any resolution to a case like this there's always regret. and i think the tenure of moe's experience at pennichuck and the value that he had with the company, that there was a significant shareholder value in having moe there.
The settlement was announced while the company's current managers continue their 2 year struggle against the city of Nashua.
Nashua is trying to acquire the company by eminent domain.
Pennichuck has fought to remain investor owned.
Don Correl is the company's current head.
He says he's glad the settlement with Maurice Arel has been reached.
And he says Pennichuck has taken steps to keep abuses from happening again.
so, we've implemented some new procedures, some new controls, we've established some new corporate governance procedures. we've enhanced the independence of our board.
Federal and State regulators say the settlement with Arel ends their investigations into his alleged wrongdoings.
But the agreement covers only the government's civil actions.
It's still possible that federal or state law officials could also bring criminal charges against Arel.
