Evening star., 1932-06-05
INSIDERS ACCUSED
in COPPER DEALS
Officials Made Big Profits
Manipulating Stocks,
Probe Is Told.
BY the Associated Press.

BY the Associated Press.
The use Of inside information" for
personal profits by high officials of big
copper companies dealing in the stocks
of their own corporations was charged
yesterday in the Senate Banking Com
mittee's stock market investigation.
William A. Gray, committee counsel.
said officers of the Anaconda Copper
Co. and few others. including the
National City Co., made more than
s4o00,Ooo by buying up the stock Of
other copper concerns they knew were
to be acquired by Anaconda.
Those in on the deals, he charged,
were Cornelius F. Kelley. president of
Anaconda John D. Ryan, chairman;
H. F. Guggenheim, large stockholder in
the Chile Copper Co.. and w. E. Thorn
ton. president of the Greene Cananea
Copper Co., in addition to the National
City Co.
Wash Sale" Charged.
Gray also charged these men profited
from a wash sale" In copper stocks.
which boosted the price In violation Of
stock market rules.
Ryan was the witness as Gray told
the story. He denied he had profited,
because he said he held his stock until
it deprecated in value. He agreed
however. that if he had sold out at the
proper time he would have made money
James A. Fayne, member Of the
brokerage firm of Hornblower g.
| G1I I,a
wash sale in the copper stock, but
said it was done inadvertently, due 10
mistake
Ryan testified Anaconda acquired the
Chile company in 1929 by transfer
of stock on the basis of 73-l00 Ana
conda shares for each share of Chile
stock
He said joint account he conducted
for himself Kelley, Guggenheim and
the National City Co. accumulated ILL.,
600 shares of the Chile stock between
January IA and % and on February
exchanged it for 81 900 shares of Ana
conda.
Gray contended the stock had been
accumulated with inside knowledge"
that announcement Of the conversion
would be made on January 90, the day
after the accumulation was completed.
late the ratio had not been agreed
upon" Ryan said
Yes but you knew there was to be
a conversion and you made a profit Of
million and a quarter, didn't you?"
Gray asked
Il took serious loss" Ryan an
swered He then explained the stock
had since deprecated.
Guggenheim Profit Cited.
Gray however. pointed out that Gug-
genheim had sold at the time and made
s4o4 900.
If had been smart enough to sell,
We would have made money" Ryan
agreed
Payne was called to the stand and
testified Ryan's account with Horn
blower & Weeks was known as
Greene account No. S." He said he
did not know who else was interested
in the account.
Questioning Fayne. Gray brought out
that within three minutes on March 90.
1929. Fayne had bought $4,000 shares
of Greene Cananea stock through one
| broker and sold 1t through another
| The sale was from Ryan's Greene
account No. 55,' and the purchase was
| for Ryan's account known as Greene
account" The next day, Fayne said,
the stock was transferred back to
No SIS.
AS result" Gray said, the stock
jumped from 1872 to 1876 and you stepped
in and sold large quantities. Do you
mean to say that wasn't pure wash
sale to put up the market?"
Claims Mistake Made.
Precisely" Fayne replied. 1T was
not"
Meanwhile the big transaction had
been noted on the floor, Fayne said,
and buying orders flooded in.
Then I sold all I could to keep the
market from going through the roof"
Fayne said, explaining he had discretion
| to operate Ryan's accounts.
Then you disposed of all the stock
| belonging to Ryan and his friends at an
advanced price" Gray remarked.
| Fayne said his firm had kept the
commission on the deal. amounting to
$4,000 or $4,000. with Ryan's consent.