A key figure in the 1980s Iran Contra affair is being investigated for possible insider trading, a probe that the company involved says is straining its already thin resources.
Former Air Force Gen. Richard Secord is the target of two separate federal investigations, Computerized Thermal Imaging Inc. of Ogden said this week when filing its annual report with the Securities and Exchange Commission.
Officials with both the SEC and the U.S. Attorney's Office for the Southern District of New York said Wednesday they would not confirm whether an investigation was under way.
However, the company said in its annual filing Monday that it was asked to provide documents to both agencies "in connection with possible violations of the insider trading prohibitions found in the federal securities laws" by Secord, its chairman and chief operating officer.
A company spokeswoman in Ogden referred calls to Secord's attorney, Carl Schoepple, who declined to comment.
Secord sold company stock worth $126,000 in December just before a federal regulatory panel declined to recommend the firm's cancer-detection system.
Secord sold 73,400 shares Dec. 9 and another 37,900 shares the next day at an average price of $1.14 per share, according to filings with the SEC.
Later on Dec. 12, a Food and Drug Administration regulatory panel voted 4-3 against recommending the company's breast cancer detection system, in which the company had invested $20 million. The company said the rejection has hindered the device's marketing internationally.
Less than a week after dumping the shares, Secord repurchased them — making about $100,000 on the turnaround, according to SEC filings.
Share prices plummeted after the FDA's vote, closing at 39 cents on Dec. 10.
CTI stock closed at 37 cents per share Wednesday, up 1 cent.
The company said Monday it is not a target of the investigation, but the legal costs incurred with providing documents to investigators and legal work such as preparing depositions has cost about $650,000.
"The expenses we may incur in the future could substantially and adversely affect our working capital, distract management from day-to-day operations and retard capital formation, which may result in us having to materially reduce or terminate our operations," the company said in the report.
Secord, 71, is a retired Air Force general who acknowledged helping arrange arms shipments to Nicaraguan rebels and the Iranian government. He was sentenced to two years of probation in 1990 for making false statements to congressional investigators, but his guilty plea was overturned in 2000.
Secord was hired by CTI in 1995 to help revamp China's health-care system in a joint project with Electronic Data Systems and Fluor Daniel Inc.
CTI manufactures and markets thermal imaging and infrared devices that are used for clinical diagnosis, pain management and testing of industrial products.
The company had been headquartered in Lake Oswego, Ore., but recently moved its operations to Ogden. The company had employed 50 people in Utah, Oregon and California as of last December.