Evening star., 1962-05-22
BY MIRIAM OTTENBERG
Star Staff Writer

CsAA GNAAA
| Chairman Mack of a House
Commerce subcommittee made
it clear today that he expects
the District Commissioners to
take some responsibility for
protecting Washington inves-
tors from shady stock dealers.
1T seems to me they should
be as interested in solving
their problems here as any of
the 48 States that now have
laws to protect investors" Mr..
Mack said.
He made the comment after
witnesses at the first public
hearing on the Districts tur-
bulent situation agreed that
something should be done to
protect local investors but dis
agreed on who should do it.
! Mr.. Mack said he personally
favored expanding the juris-
diction Of the Securities and
Exchange Commission to cover
District stock dealings. But he
also thought the District should
use the authority it already
has and seek more authority
from Congress to provide local
control over securities and the
men who deal in them.
Expects Early Action
IF District officials recog-
nize the problem that exists
here" Mr.. Mack said. sit seems
| to me they have an obligation
to get the situation corrected
and they could recommend that
Congress enact legislation"
He said he expected his sub
committee to meet soon in
closed session to determine
whether to recommend amend
ment of the Securities Act of
1884 to give the SEC rule
making power over broker
dealers doing business in the
District. This power would per-
nit the SEC to set standards
for broker-dealers and their
statesmen on their experience,
character and operating capital.
Mr.. Mack emphasized, how
ever, that the District should
not wait for the subcommittee
but should proceed with its
own recommendations for deal
ing with the problem which is
primarily the city's response
bility.
Principal Assistant Corpora
ton Counsel Milton D. Norman
said after the hearing that the
city's study would be continued
land two alternatives would be
presented to the Commissioners
"a separate District agency to
administer a blue sky" law
regulating securities dealers or
a proposal that the SEC should
take over the local regulation.
I'VE may suggest an interim
licensing provision" he said,
but it wouldn't do one-third
Of the job. Our present think
ing is that this needs more
than licensing dealers. The
best thing is for the SEC to
handle it,"
The Districts position was
reinforced by Wallace H. Full
ton, executive director Of the
National Association Of Securi-
ties Dealers, who testified at
the hearing that regulation
should be adopted for securities
dealers in Washington and
should be administered by the
SEC.
Mr.. Mack questioned Mr..
Norman sharply at the hear
ing on why the Commissioners
had not acted before now to
cope with the problem which
he described as becoming al
most uncomfortable here in the
last three years.
"I have the impression" Mr..
Mack remarked, that the
Commissioners have been ex-
tremely reluctant to assume re-
sponsibility for solving this
problem"
Star Series Cited
! Mr.. Norman replied that the
city was not aware of the dan
gers facing investors here until
The Stars Investors Beware"
series in February. Thereafter,
he said, the Commissioners Or
dered the Corporation Coun-
sells office to investigate.
Mr.. Norman added that a
series of meetings with Federal
officials and others familiar
with the investment business
had resulted in agreement that