Evening star., 1955-03-04
Law 10 Ban Tips
.0nStocksAsked
AT Senate Probe
Exchange Head Tells
Of Turmoil After
WincheII TeIecust

The Senate investigation of
the stock market today brought
demand for legislation to curb
stock tips, after a witness told
of how a tip from a television
commentator two months ago
threw the American Stock Ex-
change in New York into tur-
moil.
Edward T. Mccormick, presi-
dent of the American Exchange,
told the Senate Banking Com
mittee a television tip from
Walter Winchell on his program
January 9 resulted in literally
thousands of orders" the next
day for stock in a Venezuelan
oil firm.
The company was the Pante-
pee Oil Co., which, Mr.. Nc
Cormick said, was subject to a
sudden rise as a result of the
tip and then sold off lower after
the buying furry was over.
Mr.. Mccormick said he heard
the Sunday night telecast and
knew Immediately it would make
trouble when the exchange
opened the next morning. He
said steps were taken to protect
those ordering the stock which
was not offered on the floor un-
til two hours after the exchange
opened.
10000 Shares Sold Short.
The Wall Street official said
one exchange floor specialist
was persuaded to sell $4,000
shares of Pantepec short in an
effort to hold down the price in
the face of an avalanche of
orders that came from all over
the country.
The witness said that at the
close Of the market preceding
the Winchell telecaSt Pantepec
stock sold at 634 a share. When
the stock trading was finally
opened the day after the tele-
cast and after the steps to hold
down the price had been taken,
he said the stock sold at 87s a
share. 1t is now selling at about
81.
Mr.. Mccormick said the de-
mand for the stock was so great
that it would have opened the
day following the telecast at
least SIS if the precautionary
measures hadn't been taken.
ut was just simply amazing"
Mr.. Mccormick said, in de-
scribing the scene on the ex-
change floor the day following
the tip. There were thousands
of tickets, mostly buy orders, but
also sell orders and cancella-
tons"
Wound Up With Profit.
He identified the floor special
ist who sold the stock short in
an effort to curb the boom as
David jackson. He said Mr..
Jackson actually wound up with
$4,000 profit on the transac-
ton but in rendering the same
type of service some time before
he had lost 100000 on a similar
deal"
Mr.. Mccormick said that in
an average week about 10000
shares of Pantepec changed
hands. In the week preceding
the Winchell broadcast, he said,
trading in the stock rose to 170,-
900 shares. The demand for Pam
tepec the day after the telecast,
he said. reached $4,000 shares.
The heavy trading both the
preceding week and the day fol-
lowing the tip came from all
over the country. the witness
said. He added that in the pre-
ceding week there were no very
large orders and that they were
we'll distributed from large areas.
The demand for some legisla-
ton to curb market tips came
from Senator Bush, Republican,
of Connecticut.
IF people are to be advised
in the serious business of how
to invest thier money it shouldn't
be done on a frivolous basis"
Senator Bush said. and he asked
Mr.. Cormick. Did you have any
recommendation for legislation
to put an end to the irrespon-
sible practice of giving tips by
television, radio, etc.,"
The witness pointed out that
almost all papers supply finan-
(See MARKET. Page A-8D