Evening star., 1961-04-28
SEC

SOuSAAuCu EEOLu r hSL ~
traders who speculate with
their own funds.
Two employees of a New YorE
brokerage firm, Harris, Upham
& Co., testified that Jerry RI
in 1858 tried to induce them t.
sell shares of I. Rokeach &
Sons (now Exquisite Form
Brassiere) to their customer
in return for under the table
payments Of 10 cents q share
The witnesses said the offe,
was rejected. according to thl
brief, but one testified tina
Re indicated others had &C,
cepted such payments.
Jennis M. Doroshaw, ther
president Of ThompSon-S Star,
rett Co., Inc, said he promised
Jerry Re $4,000 in 1854 be
cause Re suggested mergers TO
the company-nergers which
did not take place. The brie.
said several other witnesses tes,
titled that Re was promised
the money in return for higgins
the price of the company
stock. There since has been Z
complete change in the man,
agement of Thompson-Star
rett.
Lawrence Schmidt, president
Of Silver Greek Precision Corp.
was quoted in the brief as say.
ing that Jerry Re in 1856 de.
manded that he go through
with a proposed merger or "you
might even get bumped off,
Demand Is Reported
Mr.. Schmidt also was quoted
as telling SEC investigator,
that Jerry Re telephoned him
to say, "if you want this stoci
Of yours to go any place, If you
are interested In having thil
stock right, I've got to be taker
care Of. Somebody has got II
grease my palm"
The Res, in q brief filed BY
Ira w. Berman, their counsel
said, The facts plainly justify
the imposition of sanctions" II
the case. However, the briet
contended that Gerard Re die
not willfully violate any law
or regulations and acted solely
on the instructions of his father
who takes the sole response
bility."
The brief added:
The younger Re has already
been severely penalized by hi
suspension from activity in the
only business he knows. W.
respectly submit that on the
evidence here, he. should bC
given an opportunity to engage
in his profession in circum.
stances where he would be free
of the unfortunate influence
which his father exercised ovel
him"
The SEC brief said ANY at
tempt to exculpate Gerard F
Re is absurd" It said that If he
was to some extent dominated
by his father this docs not re-
pay the thousands whose trust
he betrayed and whose money
he took"
Controls frightened
In New York, the exchange
said 1t has taken steps it hopes
will present any market rig.
ging and illegal stock sales by
strengthening its control ot
-the-counter, off boarc
trades. The Exchange notec
that the Res have been sus.
pended as specialists since MAY
H.. 1860, and that 1t previously
had investigated transaction
by Re and Re on its own voli.
tion.
The Exchange said 1t hac
adopted "A series Of rules anc
policies which, 1t is confident
will effectively prevent the re.
currence Of a similar situa.
ton"
According to the SEC inves.
tigators, the Res illegally ped.
died millions of dollars worth
of stock in nine corporation.
between 1854 and 1860. Tht
Investigators said most Of tht
shares were sold at risinl
prices in rigged markets on tht
floor of the exchange.
According to the agency law
yers, the shares were channeleC
through dummy" accounts IL
New York and Zurich, Switzer
J land.
The alleged illegal stock sale
: involved shares of the followinI
corporations for which the Re
! acted as specialists:
: Highway Trailer Industries
Inc, /. Rokeach g. Sons, Serv
Corp. Of America, Silver Cree
; Precision Corp, Skiatron Elec
} tronics and Television Corp
Swan-Finch Oil Corp, Thomp
! son-Starrett Co., Inc, Tran
Continental Industries, Inc, an
United Pacific Aluminium Corr