Secretary for Kerkorian firms sued over insider trading

Tuesday, Jan. 5, 1999 | 11:29 a.m.

An MGM Grand Inc. executive secretary "misappropriated" confidential corporate information about Kirk Kerkorian's 1995 bid for Chrysler Corp. and fed it to her husband and father-in-law, alleges the Securities and Exchange Commission in an insider trading lawsuit filed Monday in U.S. District Court in Las Vegas.

Christine McKiernan, executive secretary in 1994 and 1995 to an unnamed high-ranking executive at Tracinda Corp. -- Kerkorian's holding company -- is accused in two instances of misappropriating confidential information.

The first time, in November, 1994, McKiernan typed several drafts of a letter sent by Tracinda to Chrysler demanding a dividend increase, a stock split and a stock repurchase plan, the SEC said. She allegedly told her father-in-law, Herbert Holzman, who then bought 2,000 shares of Chrysler stock in a joint account in the names of two relatives. Herbert Holzman has since died.

After the Tracinda demands became public, Chrysler's stock rose more than $5 a share. Holzman sold the 2,000 shares after the announcement, turning a $7,072 profit, the SEC said.

In April 1995, McKiernan typed several drafts of a press release that would announce a Tracinda offer to buy Chrysler. She allegedly fed this information to Herbert Holzman, and to her husband, Darryl Holzman. The SEC said Herbert Holzman bought call options on the information, using in addition to his name the name of his wife, Ethel, and the name of another unnamed relative. The agency said Darryl Holzman also bought call options on the information.

After the Tracinda offer became public, Chrysler's stock rose $13.75, netting Herbert Holzman $66,929, and Darryl Holzman $40,025.

In all, the Holzman's netted more than $114,000 from the insider trading scheme, alleges the SEC.

In consent decrees filed with the suit, the SEC agreed to waive fines or penalties for both Darryl Holzman and McKiernan due to their financial situations. Holzman and McKiernan signed the consent decree agreeing to the fine on condition it be waived, and admitted no wrongdoing.

Ethel Holzman signed a decree and agreed to pay $50,000, representing some of the money earned by her deceased husband.

Herbert Holzman bought call options on the information, using in addition to his name the name of his wife, Ethel, and the name of another unnamed relative.The SEC