SEC Said to Probe Ex-Regulator

WASHINGTON -- The Securities and Exchange Commission is investigating whether a former regulator traded on inside information about the BankAmerica-Security Pacific merger, according to people familiar with the matter.

Stephen M. Lane, a former senior policymaker in the Office of the Comptroller of the Currency, was cited as the target of the investigation.

Mr. Lane recently quit his job at the Secura Group, a Washington-based consulting firm that has played an advisory role in numerous bank mergers.

Mr. Lane did not return repeated telephone calls seeking comment, but Secura's chief executive, William M. Isaac, said Mr. Lane told him about the SEC inquiry before resigning around Oct. 1.

Mr. Lane acquired $4,500 worth of options to buy BankAmerica Corp. and Security Pacific Corp. stock about two weeks before the Aug. 12 merger announcement, according to sources. He reportedly made $30,000 as news of the merger pushed both California companies' prices up.

The SEC is said to be probing whether Mr. Lane received information from an unidentified current employee in the Comptroller's office who is also under investigation.

An SEC spokesman, citing department policy, declined to comment.

Trade Called a |Gamble'

Mr. Isaac said Mr. Lane claimed he never used inside information but merely took a gamble, figuring some banks would have to merge in California.

Mr. Lane joined Secura in April 1990 after 17 years with the Comptroller's office. At the time he left the agency, he was working in a group of examiners who developed policies such as those on the treatment of loans for highly leveraged transactions.

Mr. Lane won an internal award in 1989 for "outstanding contributions" to the agency.

At Secura, Mr. Lane performed loan portfolio analysis, helping clients assess the extent of problems. Mr. Isaac said the firm did not work for either BankAmerica or Security Pacific on their merger.

"He informed us that the SEC was looking into whether there was trading on inside information with respect to the merger," Mr. Isaac said. "Steve tendered his resignation, and it was accepted."

SEC Demanded Names

The American Banker reported in late July that the SEC was investigating an OCC staffer for trading on inside information. Mr. Lane turned up on a list of associates the SEC demanded from the OCC employee, who works in the agency's computer division and is on a paid leave while the investigation proceeds.

The SEC then checked the stock transactions of the people on the list and found that Mr. Lane had bought the BankAmerica and Security Pacific stock options.

"We believe that Steve did not have access to inside information through our firm," Mr. Isaac said. "Steve denies that he had any access to any inside information, and we have no reason to doubt his denial."

"Steve is an extremely bright, conscientious person," a senior OCC official said, insisting on anonymity. "No one has made the case that this trade was related to this other guy."

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