Press Room
August 6, 1998
MacKay Gained But Others Lost
The Associated Press
The Florida Times-Union
TALLAHASSEE -- Gubernatorial candidate Buddy
MacKay gained $501,085 by selling stock in a
company his brother once headed, but a plunge
in value has prompted other stockholders to sue
the company.
A group of shareholders filed a lawsuit in federal
court in Georgia, accusing Premiere Technologies
and its officers of fraud and market manipulation,
the New York Times Regional Newspaper Group reported
yesterday.
The suit alleged company managers failed to
disclose management problems, including an inability
to run the company, and sold 320,000 shares of
stock at "artificially high" prices
before divulging the problems.
Premiere said in a statement it would "defend
the suit vigorously," describing it as "completely
without merit."
MacKay's brother, George MacKay, is not a party
to the suit, said Lawrence Klayman of
Boca Raton, attorney for the shareholders suing
the firm.
MacKay reported the capital gain on his 1997
tax return from the sale of Premiere stock his
younger brother gave him in 1995 as a Christmas
present.
George MacKay, an Orlando engineer, was an original
investor and once president of the Atlanta-based
firm, which specialized in communications services
such as voice message and teleconferencing. He
left Premiere in 1995.
The stock, which MacKay reported on his tax
return was valued at $13,750 when given to him,
had not been offered for sale to the public at
that time.
When the company offered 4.6 million shares
to the public in March 1996, asking $18 a share,
trading in the shares opened at $21.75 on the
NASDAQ stock exchange and closed after one day
at $23.94.
At that price, MacKay's holdings were suddenly
worth more than $400,000. Premiere's stock later
approached $50 a share, but by the time MacKay
first sold some of his shares, in January 1997,
the price was $29.
MacKay sold the stock "because he needed
to take care of some debts," campaign
spokeswoman Michelle Kucera said. "It was
the right time to sell the stock. It had been
going up and down, and he took advantage of the
opportunity."
The stock has since plunged to about $20 in
December and fell further this year to the $10
range.
