The Waterbury Democrat., 1946-02-08

the lEalsoy, Stuart firm, referred
70 as the respondent IN The slndlngl
By The beard, denied u had violated
the association rules, And 90 filed
ils answer.
The District Business Conduct
COMMITTEES Issued its decision last
November ruling that the reNpon-
dent had violated section I OK Ar.
tlclo III. The HAleey Company
thereby was oonsuEed and assessed
costs Of The proceedings,
censeEs n benas nefuna
The firm appealed the ruling "a
The Board OF Governors which held
q hearing Dec, u, ieas at which
time both parties presented oral
arguments.
The Issue revolves around the
CLIPS move 10 reund It's OUT
standing Series q bonds By the H.
suance Of additional bonds at q
lower interest rate. The company
then sought The retention Of In
vestsment banking firms with the
purpose OF finding purchasers for
the new bonds BY means OF private
placement. Such an application was
filed with the Connecticut Public
Utlltles Commission for approval Of
the issuance Of the new bonds TO
be known as Series J. The appllca-
ton stated the complainant cine
CL&P co.. 'expects 10 sell these
bonds through private sales 10 q
limited number Of institutions, ct a
substantial premium plus accrued
interest. The proceeds were then
TO be used for redemption on June
Of the Series q bonds.
on or about April Is, 1875, after
further discussions with its agents,
the complainant was advised that
eight institutions had agreed 10 buy
the eie.00O,O0o IN principal amount
Of Series J bonds ct Q price Of iO6.-
9oo30s percent. The proceeds Of this
sale would be si7,ile,e5e. from
which would be deducted estimated
expenses Of $4,000 and the finders
fees Of the two investment banking
firms In Connecticut of $4,000: and
after redemption Of the Series q
bonds ct iO4h the balance Of the
proceeds would increase the COM
plainant's cash reserves by 32i ,s5S.
The compliments president pre-
Sefited these facts to the Connecti-
cut Commission at the public hear
ing held before the Commission on
April Is, 1915.
Suggests Open Composition
The Halsey Stuart Company at
the time was notified by the Util-
tiles Commission Of the proposed
issuance. The com sany then tele-
graphed the CLAP president that
1T lie our opinion YOU can receive
the highest possible price for your
bonds only BY offering them ct open
competitive SALE"
The respondent appeared at the
hearing before the Public Utilities
Commission relative 70 the applica-
ton for approval Of the private sale.
The respondent at that time then
read letter before the commission
addressed TO the CLAP but never
received by the latter ct 1870 per.
cent Of the principal amount q fig
ure which they inserted into the
letter only after the CLAP had adj
vised the hearing that a price Of
i0e.90090S percent had bean set for
the private sale Of the eight insti-
t1tions. subject 10 approval Of the
Commission.
Approved Private Sale
Subsequently, the Commission ap-
proved the private sale and the Ser.
les O bonds were redeemed on June
I, 1915.
The District Business Conduct
Committee ruled the Haisey Stuart
method as . 'high-pressure attempt
to sell the respondents services and
70 compete for the issue under COM
oetitlve biddings." It also ruled:
ID While at Is difficult TO de-
fine exactly the precise conditions
under which aggressive efforts TO
establish business contacts cease
70 be legitimate and exceed rea-
sonahle limits" the Association
must exact from its members
compliance with high standards
Of commercial honor so that there
viii exist that degree Of restraint
and ethical decency which are
necessary FOR the protection OF
the public:
b Respondents publication ut
the hearing Of q proposal address,
ed TO, but not previously shown 10,
the complainant, was clearly q
planned last-minute attempt to
endbarraas and harrass complain
ant into doing business on re-
spondent's terms and regardless
Of all other considerations; and
Cd Respondent INDUCED in
high-pressure tactics without
proper consideration for COM
claimants wishes and without OBJ
servation Of elemental principles
Of decency and courtesy which are
inheren. In the conception OF high
standards Of commercial honor"
in violation Of Section Of Article
N Of the Rules Of Fair Practice.
Bases Fer ReBswal
The Board Of Governors reversed
the basis Commuters decision on |
the following basis:
THE Board Of Governors con-
cludes that the action Of respondent |
in exercising its right 10 object TO
the proposed sale ct the hearing be-
fore the Connecticut Commission,
and 70 support It's objection 70 APP
pr'val Of the application with its
own offer In good faith to purchase |
the bonds at higher price with q
subsequent offering Of such bonds |
by open competitive bidding, did not
constitute conduct inconsistent with
high Standards Of commercial hon
or and Just and eQultable principles |
Of trade. as used IN Section I Of
Article III Of the Rules.
at the hearing before the state
Commission on April n. 1915 re-
spondehk knew that complainant
had entered into contracts with
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