Neil Bush makes one-day profit over $170,000
President's brother exercised stock options in firm he advised
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Neil Bush says he acted on the recommendation of his financial adviser.
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WASHINGTON (AP) -- President Bush's brother Neil made at least $798,218 on three stock trades in a small U.S. high-tech company where he had been a consultant, according to his tax returns, including $171,370 buying and selling the company's shares in a single day.
Neil Bush's big paydays in the stock of Kopin Corp. of Taunton, Massachusetts, included the July 19, 1999, purchase and quick sale of stock as the company announced good news about a new Asian client that sent its stock value soaring.
Bush said he did not have any inside information from Kopin, and simply acted on a recommendation from his financial adviser.
"Any increase in the price of the stock on that day was purely coincidental, meaning that I did not have any improper information," Bush said in e-mails to The Associated Press. "My timing on this transaction was very fortunate."
The AP obtained Bush's tax returns for the years 1997 through 2001 from a source familiar with his finances.
Bush noted that he lost $287,722 on Kopin stock after the market in high-tech stocks crashed.
Unlike the ordinary investor who buys at the market price, however, Bush benefited from the fact that his stock purchase costs in some cases were minimal because he got a bargain, paying $13 a share when he exercised stock options that were part of his consulting compensation from Kopin. The company's stock price was selling for many times that amount during much of the time Bush was trading. The company granted him 20,000 stock options.
Bush's returns, as well as records that have come to light in Bush's divorce case with his wife, Sharon, show that since his controversial tenure with the failed Silverado Banking, Savings and Loan Association of Denver, more than a decade ago, he has become a globe-trotting businessman with a variety of consulting deals.
Bush says he first came in contact with Kopin when he was a consultant for an Asian company, Telecom Holdings, a telecommunications company whose executives wanted to invest in the United States. "We searched for a viable fit and found Kopin Corp.," Bush said. "The bulk of our equity compensation for the transaction came from" the Asian company, which took Kopin stock in exchange for its investment.
"Neil helped put together an approximately $27 million deal and was awarded stock options for his efforts. Stock options can range from anywhere to being utterly worthless to very valuable," Bush lawyer John Spalding said in an interview.
After the 1995 deal, Kopin snapped Bush up as a consultant for two years "to see what other doors he could open up for us" in Asia, according to Kopin's chief financial officer, Richard Sneider.
"Neil Bush was a matchmaker and he was given stock options in Kopin as part of his compensation," Sneider explained. "Our executives were pleased with his hard work on the Asian investment."
Kopin's CFO said, "I don't know whether Neil made any introductions to anybody" during his two years of consulting, but "there were no further equity investments" like the $27 million deal Bush arranged in 1995.
On December 2, 1998, three weeks after Kopin reported the first profit in its 14-year history, Bush bought 10,000 shares of Kopin stock for $140,000. He sold it a year later for $692,053.
On July 19, 1999, The Wall Street Journal published a story saying that a Japanese video camera company had started using tiny liquid crystal display viewfinders manufactured by Kopin.
The newspaper called the deal "a surprising win for the U.S. flat-panel-display industry." The company officially announced the deal the morning the article was published.
Bush said his financial adviser at Wells Fargo recommended shortly after 9 a.m. that he exercise the option to buy 15,000 shares of Kopin stock and immediately sell.
"I did," Bush said. Kopin stock opened that morning at $28.62. Bush sold at $33.25. Bush sold the stock for $495,745 and he listed his cost on his tax return as $324,375.
"My financial adviser ... recalls that I had instructed her to keep an eye out for an opportune time to exercise the options to buy 15,000 shares of Kopin stock as early as March of 1999," three months before the July transaction, Bush said.
At the end of January 2000, with the stock market nearing its peak and Kopin's stock at over $70 a share, Bush moved into the market again. Five months later, he reported a gain of $74,795 on the sale of 4,000 shares, but he kept an additional 13,150 shares, eventually suffering the losses.
Copyright 2004 The
Associated Press. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.
