National Bankers Life Insurance Co. - Involved in Famous Scandal - 1967-72 dated Stock Certificate - Major Fraud Case
Inv# IS1077 Stock
Stock in black and gold. Dallas, Texas. Similar to IS1078.
The Sharpstown scandal, a stock fraud scandal that shook the state of Texas in 1971 and 1972, involved the highest levels of the state government. The scandal’s name was derived from its involvement in the Sharpstown area of Houston. The central figure was Houston banker and insurance company manager Frank Sharp, who controlled the Sharpstown State Bank and the National Bankers Life Insurance Corporation (NBL). Sharp orchestrated a scheme to artificially inflate the value of National Bankers Life, enabling him to grant $600,000 in loans to state officials. These officials, in turn, purchased stock in National Bankers Life, intending to resell it at a substantial profit.
One of the victims of this scandal was Strake Jesuit College Preparatory, which lost a staggering $6,000,000 and a portion of its land following Sharp’s advice. The school had bought the resold stock at a low price, only $20–$26 a share. Sharp, using the stock as a motivator, pushed for legislation that would benefit National Bankers Life, ultimately increasing the company’s value to its investors—the very individuals who would champion the legislation.
The scheme proved successful in generating substantial profits for the investors, amounting to a quarter of a million dollars. However, the U.S. Securities and Exchange Commission (SEC) intervened early in 1971, filing criminal and civil charges against former state attorney general Waggoner Carr (D), former state insurance commissioner John Osorio, Frank Sharp, and several others. By the middle of 1971, anyone in the state government who might have been connected to Sharp faced intense political pressure. Allegations of bribery to influence the passage of favorable bills spread to House Speaker Gus Mutscher Jr. (D), State Representative Thomas Clifton “Tommy” Shannon (D), state Democratic chairman and state banking board member Elmer Baum, Lieutenant Governor Ben Barnes (D), and even Governor Preston Smith (D).
A stock certificate is issued by businesses, usually companies. A stock is part of the permanent finance of a business. Normally, they are never repaid, and the investor can recover his/her money only by selling to another investor. Most stocks, or also called shares, earn dividends, at the business's discretion, depending on how well it has traded. A stockholder or shareholder is a part-owner of the business that issued the stock certificates.
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