Ex-Cendant Executives Face New Charges
Cendant Corp.’s former chairman, Walter Forbes, was indicted on insider trading charges for allegedly selling more than $11 million in company stock a month before accounting problems were disclosed at the world’s largest hotel franchiser.
Forbes and former Vice Chairman E. Kirk Shelton, who had been indicted twice before, were named in a new federal indictment accusing them of additional securities fraud charges and lying to the Securities and Exchange Commission.
Prosecutors allege that both men inflated revenue for a decade at CUC Inc., which merged in December 1997 with HFS Inc. to create Cendant. The company revealed accounting irregularities in April 1998 that triggered a $14-billion drop in market value in a single day.
“Mr. Shelton vigorously denies all the charges against him,” said his attorney, Martin Auerbach. Forbes’ attorney, Brendan Sullivan Jr., did not return a call for comment.
Cendant shares rose 3 cents to $12.11 on the NYSE.
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