The New York herald., 1921-08-26
FAKE REPORT SENDS
MEX PETE TO "a 1-2
Plot to Break Market Seen in
Telephone Message Of Pass
ing of Dividend.
NEWS BUREAU is TAKEN In
Stock Exchange Starts Inyes-
tigation in Hope of Land
ing Culprit.

ing Culpflt.
Publication yesterday Of a false re-
port that the directors of the Mexican
Petroleum Company had deferred action
on the common stock dividend caused a
sharp break In the market for both
Mexican Petroleum and Pan-American
Petroleum shares and correction OF
the report seven or eight minutes Letter
resulted in just as violent recovery.
Large sums were made aaf lost by
spectators in the stock in the few
minutes 1t took for the correction TO be
made effective.
At 1897 o'clock when Mexican Pc
troleum was selling at 9oss, the ticlSers
of the New York News Bureau carried
the following flash: THE directors of
the Mexican Petroleum Company at
meeting to-day deferred action on the
dividend" Wall Street was summed.
In all the bearish runiors that have
been going around there was never
heard even the breath of a question as
to Mexican Petroleup1's dividend.
1t was two or three minutes before
traders realized what the news meant;
then the wires into brokerage offices be-
gan to get hot and the office employees
and Stock Exchange members of various
firms were buster than for many day
executing the orders hurled at them
from every direction. Immediately
Mexican Petroleum and its parent COM
pany, Pan-American, began to break.
shares In wild Decline.
From 9oss occurred a wild decline to
q new low mark of S4H. with as much
as a full point and more between indi-
1 vidual sales The market for the shares
was in O state OF complete demoraliza-
| tion.
At 12:4:, six minutes after the false
| news waS published, the tickers of Dow.
Jones & Co. quoted Herbert G. Wylie.
vice-president and general manager OF
Mexican Petroleum, as saying that there
had been no meeting scheduled Tor
yesterday and no intention Of holding
meeting OF directors until the first week
of September. Soon after this =. +.
Hutton & Co. received message over
] their wire to Los Angeles. the official
headquarters of the oil company. con-
| firming Mr.. Wylie's assertion.
Immediately stock market traders
backed up. Those who had sold short
scurried to cover those who had dis
posed of long stock when the inforna-
tion was first published made frantic
efforts to get 1t back. At the Mexican
Petroleum post on the floor of the Stock
| Exchange there were confusion and dis
order and the recovery of the stock from
S41a to 81 was just as rapid as its pre-
vious decline had been. Pan-American
ahnrra followed In orderly
! fashion.
| When II was all over and trading had
once more assumed some semblance OF
order Wall Street began to look around
| for the source of the error Edward
Raslsova OF the New York News Bureau
called at the Stock Exchange and asked
its officials to make an investigation. He
told them what he knew Of the situation.
the part the New York News Bureau had
played. and offered to lend them all as
sistance in an investigation. The COM
nittee on business conduct was called
into session after the close of the market
and the investigation begun.
Statement by News bureau.
Mr.. Raskovar gave out the following
statement:
The statement that the Mexican
Petroleum Company had deferred It's
dividend printed on our ticker service
this afternoon was received by telephone
purporting to come from one Of the
prominent financial houses OF the Street.
Tho house has a private wire to Los
Angeles. where the meetings Of the di-
rectors are held. and the house referred
to had agreed early In the day to fash
us the result of the meeting as soon as
it was received. Consequently when the
fash came we used it without further
investigation.
After the publication the New York
office OF the Mexican Petroleum Com
pany announced that a meeting of the
directors had not been held and would
not be held until the first week in Sep
tember The banking house from which
we were supposed to get our information
declared that the call did not come from
It's office. and 1t is therefore evident that
we have been imposed upon"
Frank NJ. Dick Of L. r. Hutton & Co.,
61 Broadway said yesterday that the
New York News Bureau had requested
that his firm flash any information OBJ
tanned over the private wire regarding
the Mexican Petroleum dividend He de-
clared. however. that he had refused to
do this, but told the News Bureau II II
would send a messenger 10 his office
he would give the Information.
No messenger came. however. and no
information was given TO the News
Bureau. Mr.. Dick denied emphatlcally
that any telephone call had been made
by his house TO the News Bureau, giving
the original report.
No Information could DO obtained as
to the course which the stock Exchange
inquiry viii take. but ~ is believed that
an effort will be made to trace the
person who called the News Bureau rep
resenting himself as attached to the
Hutton Office and giving the false In
formation