Evening star., 1962-05-24
Another Brokerage House
Accused Of Fraud BY SEC
Are Charged
,ln individual
Sales Schemes
BY MIRIAM oTTENBERG
Star staff Writer.


The Securities and Exchange
Commission today ordered Ii
cense revocation proceedings
against another Washington
investment firm as the Federal
agency continued its enforce
ment drive here.
Charged with fraud, price
rigging and intensive telephone
campaigning in stock sales
was Wright. Myers & BesSell,
Inc, of 1916 I street NV.
Seven men connected with
the firm were also accused in
dividually Of using schemes to
deflaud in selling the stock Of
Physio-chem Corp, Custom
SheIl Homes, Inc. and Space
Tone ElectronicS Corp.
The individuals included in
the proceedings we're listed as
Jack Clifford Wright, president
Of the investment firm: Gerald
Leon Bessell, vice president;
Jimmy Clark Myers. secretary
treasurer: Charles E. Redden,
formerly listed as secretary;
Lawrence Betzler, office man
ager; B. Russell Atwood and
Paul M. Wakeman. identified
as salesman with the firm be-
fore March %, 1862.
Violations Charged
In connection with Mr..
Wakeman. the SEC order noted
that the firm violated the law
by failing to report that Mr..
Wakeman was enjoined by Dis
trict Court on December II.
1861, from further violations Of
securities laws. Mr.. Wakeman,
according to the SEC order.
joined the firm about January
S, 1862.
The SECS Division Of Trad
ing and Exchanges charged
that the firm and the seven
men violated the Securities Act
with these activities:
Sold the "unseasoned and
speculative securities" Of
Physio Chem. Custom and
Space-Tone without making a
reasonably inquiry into the op-
erations and financial condi-
ton Of the companies and with
out disclosing to potential In
vestors that they had failed
to make the required investiga-
ton.
Engaged In "an intensive
telephone campaign" to get
customers without knowing
the people they called or the
suitability Of these securities
for the potential customers.
Tried to put customers in
the position where they had
to make hasty decisions to buy
the securities upon the basis
Of unsubstantiated representa-
tions and without having dis
closed to them material facts
concerning the true nature
and worth of these securities"
Falsity Alleged
The SEC investigators al
legged that the firm and its
representatives made false
statements about the invest
ment quality of the three
stocks. the rate Of growth of
the companies. expected in
creases in the price Of the
stocks and the safety Of the
investment.
In the sale Of Physio- Chem
securities, the SEC staff alleged
that the firm used "manipula-
tive, deceptive and other frau
dulent devices" by failing to
disclose that the price OF the
stock was rigged.
The SEC staff charged that
the firm purchased Physic-
Chem from customers at "a a
share when 1t had a simulta-
neous agreement with Fontana
Securities under which Fontana
Securities would buy the same
stock from the firm at So a
share.
1t also was alleged that the
firm violated the law and SEC
rules by failing to keep current
books and records and falsify-
ing its books by failing to record
all Of the firms liabilities.
The firm was accused Of
violating the margin require
ments of Federal law by selling
securities to customers without
sufficient cash in their ac-
counts.
In another action today, the
commission set June 4 for q
hearing on revocation proceed
ingS announced May 4 against
another Washington firm, Sc
lected Securities, Inc, 1925
Connecticut avenue NV.