SECURITIES REGULATIONS FOR THE DISTRICT OF COLUMBIA MONDAY, MAY 21, 1962 HOUSE OF REPRESENTATIVES, SUBCOMMITTEE ON COMMERCE AND FINANCE OF THE COMMITTEE ON INTERSTATE AND FOREIGN COMMERCE, Washington, D.C. The subcommittee met at 10:30 a.m., pursuant to call, in room 1334, New House Office Building, Hon. Peter F. Mack, Jr. (chairman of the subcommittee), presiding. Mr. MACK. The subcommittee will come to order. This morning we have scheduled a hearing on the securities regulations in the District of Columbia. It has been called to the attention of this committee that there has been an unusual amount of questionable activity here in the District of Columbia. The Securities and Exchange Commission and the National Association of Securities Dealers have taken certain action in recent months to correct the situation. This committee feels that whatever action is necessary to solve the problem in the District should be taken. We recognize that the Securities and Exchange Commission has authority over vast areas, primarily interested in the regulation of securities on an interstate basis. But there does not seem to be any justification for having a situation existing right here in the Nation's Capital that is not regulated, to have an area which is not regulated, and to have situations existing here that are worse or as bad as any other areas of the country. For that reason, we have scheduled the hearings today to determine what action should be taken to solve this problem. Our first witness today will be Mr. William L. Cary, Chairman, Securities and Exchange Commission. 1 COMMITTEE ON INTERSTATE AND FOREIGN COMMERCE OREN HARRIS, Arkansas, Chairman JOHN BELL WILLIAMS, Mississippi SAMUEL N. FRIEDEL, Maryland TORBERT H. MACDONALD, Massachusetts GEORGE M. RHODES, Pennsylvania JOHN JARMAN, Oklahoma LEO W. O'BRIEN, New York JOHN E. MOSS, California JOHN D. DINGELL, Michigan JOE M. KILGORE, Texas PAUL G. ROGERS, Florida ROBERT W. HEMPHILL, South Carolina HORACE R. KORNEGAY, North Carolina JOHN B. BENNETT, Michigan J. ARTHUR YOUNGER, California CONTENTS Statement of— Brown, Alexander J., Jr., Acting Regional Administrator, Washington Cary, William L., Chairman, Securities and Exchange Commission_Cohen, Manuel F., Commissioner, Securities and Exchange Commission... 2 Fleischer, Arthur, legal assistant to the Chairman, Securities and 2 Fulton, Wallace H., executive director, National Association of 20 Ilgenfritz, Joseph J., Director of Licenses and Inspections, District of 26 Kneipp, Robert F., Assistant Chief, Legislation and Opinions Division, 26 26 2 Korman, Milton D., Principal Assistant Corporation Counsel, District of Columbia... Law, Stuart, attorney, Division of Trading and Exchanges, Securities Loomis, Philip A., Director, Division of Trading and Exchanges, Nottingham, C. T., Superintendent, License and Permit Division, White, Marc A., counsel, National Association of Securities Dealers, Additional information submitted for the record: Gray, Chester H., Corporation Counsel, District of Columbia, letter from, transmitting draft of proposed regulations, April 20, 1962. "Investors Beware," series of articles by Miriam Ottenberg-- III SECURITIES REGULATIONS FOR THE DISTRICT OF COLUMBIA MONDAY, MAY 21, 1962 HOUSE OF REPRESENTATIVES, SUBCOMMITTEE ON COMMERCE AND FINANCE OF THE COMMITTEE ON INTERSTATE AND FOREIGN COMMERCE, The subcommittee met at 10:30 a.m., pursuant to call, in room 1334, New House Office Building, Hon. Peter F. Mack, Jr. (chairman of the subcommittee), presiding. Mr. MACK. The subcommittee will come to order. This morning we have scheduled a hearing on the securities regulations in the District of Columbia. It has been called to the attention of this committee that there has been an unusual amount of questionable activity here in the District of Columbia. The Securities and Exchange Commission and the National Association of Securities Dealers have taken certain action in recent months to correct the situation. This committee feels that whatever action is necessary to solve the problem in the District should be taken. We recognize that the Securities and Exchange Commission has authority over vast areas, primarily interested in the regulation of securities on an interstate basis. But there does not seem to be any justification for having a situation existing right here in the Nation's Capital that is not regulated, to have an area which is not regulated, and to have situations existing here that are worse or as bad as any other areas of the country. For that reason, we have scheduled the hearings today to determine what action should be taken to solve this problem. Our first witness today will be Mr. William L. Cary, Chairman, Securities and Exchange Commission. 1 |