FTC Serves CIT Financial
WASHINGTON (Dow Jones)--CIT Group Inc. (CIT) reported it was served with a subpoena on Monday in connection with a federal grand jury proceeding related to the purchase of leases from a defunct telecommunications services company.
In its annual report, CIT Group also said the Federal Trade Commission asked the company to provide documents for transactions related to the telecom company, called NorVergence. The company said it is in the process of complying with the information requests.
CIT Group said the grand jury proceeding being conducted by the U.S. Attorney for the Southern District of New York served the subpoena last month. The proceeding is related to an investigation of transactions related to NorVergence, a reseller of telecommunications and Internet services from which CIT acquired equipment leases, CIT Group said in its annual Form 10-K filing with the Securities and Exchange Commission.
Last year, NorVergence was ordered to be liquidated under Chapter 7 of the U.S. Bankruptcy Code. Various state attorneys general starting investigating NorVergence and financial institutions - including CIT Group - that purchased NorVergence leases.
CIT Group, which provides commercial and consumer finance solutions, said in the filing that it reached some settlements in connections with the investigations. Negotiations with other attorneys general are continuing, the filing said.
-By Shira Ovide, Dow Jones Newswires; 202-862-1356;
shira.ovide@dowjones.com [ 03-07-05 1830ET ]
(Note: It should be brought to reader's attention that CIT Financial did make a settlement agreement at behalf of the attorney general's staff of New York, plus is making settlements in other states. It appears they have recognized their responsibilities and despite other publicity, are taking the high road on this matter. They also were one of the first to report the “problem” they discovered in their SEC filing. To learn more about the company, see story below on Walter J. Owens as New Chief Sales Officer editor.)
