Tight Corner

In his up-&-down career, Cleveland's Cyrus S. Eaton has squeezed out of many a corner. Last week he was in one more: the Securities & Exchange Commission had chivvied him into as tight a spot as he had ever been in.

Three months ago, Eaton called off the contract for his Otis & Co. to underwrite $11.7 million of new stock for the Kaiser-Frazer Corp. (TIME, Feb. 23). His out was a suit filed by Stockholder James F. Masterson against K-F in connection with the new issue. (K-F's counsel called the suit a "phony.") When SEC began to investigate,Witness Eaton swore that he knew nothing about the Masterson suit until after it was filed.

Last week SEC proved up another set of facts. It quizzed a Cleveland lawyer named Allan Hull, who had been waiting in the county court building in Detroit for the suit to be filed. Hull admitted that he had known the day before that the suit was going to be filed.

Who was his client? Hull refused to name him. So did Hull's partner, Marvin C. Harrison, until SEC hauled them up before a federal judge in Detroit. He ordered them to answer or risk jail for contempt of court. Unhappy Lawyer Harrison then named the mysterious client: it was Cyrus Eaton.

SEC dug out still other embarrassing facts. Eaton and his lawyers had been very busy on the long-distance telephone in the week before the suit was filed. SEC's check on their calls showed that Eaton's lawyers had been in frequent touch with Stockholder Masterson, a Philadelphia attorney, and the Detroit lawyer who filed the suit for him. SEC found all this hard to square with Eaton's previous testimony. It plans to call him back and see what he has to say now.

This file is automatically generated by a robot program, so reader's discretion is required.