The Bennington evening banner. (Bennington, Vt.) 19??-1961, 1913-02-06
STOCK EXCHANGE
BEGINS SELF
REFORMATION
Adopts Stringent Resolution
Against "Wash Sales"
TO PREVENT MANIPULATION
Action of Exchange Follows introduce
ton Of Bills Along Similar Lines
In Legislature.

New York, Feb. g. The New
York stock exchange yes
terday afternoon adopted a stringent
resolution against wash sales"
This action followed closely the intro
duction in the state Legislature yes
terday of bills recommending stock
exchange reforms as outlined in the
governors recent message. The
board of governors of the exchange
adopted tie following resolution;
mo member OF, the stock exchange
or anybody connected with a stock
exchange firm shall give or with
knowledge execute orders for the pur
chase or sale of securities which in
volve no change of ownership
Punishment for this offense is al
ready set forth in the constitution OF
the exchange under the head of "fic-
titious transactions and any viola
lation of the rule makes a member IL
able to suspension for period not
exceeding one year. The rule as
now adopted is broader in the sense
that ii applies not only to a member
of the exchange, but TO anyone con-
nected with a stock exchange firm.
j. b. Mabon, president of the eX-
change, said of the action Of the gov
errors: This resolution has been
framed after much consideration, in
the belief and expectation that it will
be efIicacious in preventing manipula-
ton. The object of the rule, as is APP
parent from its language. is to pro-
hibit the giving of orders which will
not result in change of ownership
or the execution of such orders by
brokers on the exchange with know
ledge of the fact that there will be
no such change. 1t is proposed to
take further action on other matters
at subsequent meetings"
Various committees OF the ex-
change are still at work upon rules
for the purpose of determining what
changes or additions can be made to
prevent operations and transactions
which have been criticized. The con
illusions of the committee, President
Mabon said, are to be submitted to
the governors from time to time for
action.
The resolution adopted yesterday
hits more directly at the subject
which has occupied public attention
ever since the agitation against alleg-
ed abuses on the exchange began. It
deals specifically with some of the
evils pointed out in the report of the
Hughes commission several years
ago. Officials of the exchange decline
to comment on the bills introduced
at Albany, one of which acts directly
on the resolution adopted at yester
days meeting of the governors.
Referring to these bills M. +. Dea-
guero president of the Consolidated
stock exchange, said: Most of the
practices complained of. namely, hav-
ing any connection with bucket shops;
second, trading against customers or
ders; third wash sales; fourth, ac-
cepting money from clients or doihs.
business while in an insolyent condi-
ton are strictly prohibited by the con
stitution and bylaws of the Consoli-
dated stock exchange and the penalty
is expulsion for obvious fraud or false
pretense, which penalty has been in
variably enforced"
The stock exchange resolution of
yesterday was passed unanimously
and takes effect at once. it was an
nounced.