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By Emery Dalesio, The Associated Press

RALEIGH, N.C. — Allegations of insider trading and stock manipulation at a small, politically connected surveillance gear maker are not credible, an outside attorney hired by the company said Thursday.

Claims by fired chief executive officer Paul Feldman and former sales director Martin Perry of legal violations involving were rejected in a report prepared by Raleigh attorney Lisa Grafstein.

The report was filed with the Securities and Exchange Commission, though the company has not said the SEC is investigating the allegations. ()

The former executives said Democratic state Sen. Tony Rand of Cumberland, who is the LEA board’s chairman, and dozens of other politicians were involved with a scheme to manipulate the company’s stock.

“The claims made by Feldman and Perry are unsubstantiated,” the report says. “Neither man was discharged by LEA for improper reasons, and the evidence does not support the allegations of violations of SEC rules and regulations.”

Fewer than a dozen shareholders out of more than 880 on a list the executives cited as evidence of insider trading were politicians, Grafstein said, and how the scheme might have worked was never explained.

“The allegations of insider trading and stock manipulation lack credibility,” the report says. “The information on the shareholder list does not suggest insider trading, and contradicts Feldman’s characterization of the information as containing the names of 50 or dozens of politicians who bought shares in 2004-2005.”

Gov. Beverly Perdue said through a spokeswoman she bought about $1,000 worth of stock in Raleigh-based LEA in 2002 when she was lieutenant governor and has never sold a share.

Perdue has asked at least four state agencies to examine nearly $200,000 in buys of surveillance equipment from LEA since Rand joined the board of directors in 2003. Some gear was bought without competitive bidding.

Rand has said he is leaving the Senate this month to become Perdue’s parole chief.

Grafstein, who specializes in employment law, was hired to investigate whether the two former executives are entitled to whistle-blower protections available under federal securities law.

She said she interviewed company insiders and documents, but received no response to requests to interview Feldman and Perry.