In Brief (three items)

Republic New York Sued by Japan Firm

NEW YORK - Amada Co., Japan's largest manufacturer of metalworking machinery, has filed a lawsuit accusing Republic New York Corp. and two of its officers of fraudulently inducing Amada to buy securities from investment adviser Martin Armstrong that it says are now worthless.In papers filed Monday in federal court in New York, Amada seeks recovery of at least $123 million. The complaint accuses Republic, two of its subsidiaries, and two Republic officers - one now suspended and one who was replaced - of securities fraud.

A spokeswoman for Republic declined to comment on the lawsuit, which came one day before Republic shareholders were to vote on the proposed sale of the company to London-based HSBC Holdings.

Mr. Armstrong, the founder and chairman of investment advisory firm Princeton Economics International Inc., faces criminal charges that he defrauded Japanese corporate investors of about $1 billion. Prosecutors say Mr. Armstrong ran a Ponzi scheme, in which early investors are paid off with funds from new ones until no new buyers are found and the scheme collapses.

Federal authorities say Mr. Armstrong was aided by Republic executive William H. Rogers, who was president of the futures division of Republic New York Securities in Philadelphia. Mr. Rogers is named as a defendant in the suit, along with James E. Sweeney, the former president of Republic Securities.

Amada charges that Mr. Rogers deceived Amada by falsely stating that its funds would be kept in segregated accounts and would not be commingled with Princeton Economics accounts. Court papers filed by federal authorities say Mr. Rogers wrote phony confirmation letters vouching for the safety and soundness of the notes Mr. Armstrong sold. - Bloomberg News


ABN Amro Division In $22.5M N.Y. Deal

UNIONDALE, N.Y. - European American Bank has agreed to buy $140 million-asset Olympian New York Corp., a community bank with branches in New York City, for $22.5 million, or $51 per share.European American is a $14.8 billion-asset subsidiary of $480 billion-asset ABN Amro Bank NV of the Netherlands. Olympian has two branches: one in the Brooklyn borough of New York, where the closely held company is based, and one in Queens. European has 96 branches in the New York-New Jersey-Connecticut region, including five in Brooklyn and five in Queens.

Many smaller institutions in the area have been sold to larger thrifts and banks in recent years as competition for consumer deposits has intensified. In a statement, Olympian chairman John P. Sullivan said the deal with European "immediately introduces a host of new products and services to our customers."

The sale, which requires regulatory and shareholder approval, is slated to close next year.


Citi to Expand Private Equity Unit in Europe

LONDON - Citicorp Venture Capital Ltd., a unit of Citigroup Inc., said Monday that it will expand its European private equity operations by opening an office in London and earmarking funds to buy companies in the region.Michael Gollner has been named managing director for the European business and will report to William Comfort, chairman of Citicorp Venture Capital. Mr. Gollner had been executive director for mergers and acquisitions at Lehman Brothers, London. U.S. banking companies are increasingly seeking new business in Europe, including private equity investing, stock underwriting, and mergers and acquisitions advisory work.

For reprint and licensing requests for this article, click here.
MORE FROM AMERICAN BANKER