Word: gintel
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Dates: during 1960-1969
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...securities analysts whose research allows them to become privy to company secrets. Last week, in a decision written by its new Kennedy-appointed chairman, William L. Gary, the Securities and Exchange Commission made an unprecedented move toward bringing the in-betweens within the law. The case turned around Robert Gintel, 33, a partner in the Wall Street brokerage house of Cady, Roberts & Co., and his role in a well-timed sell-off of Curtiss-Wright Corp. shares on Nov. 25, 1959. Two days earlier, Roy Hurley, then chairman and president of Curtiss-Wright, had held a much ballyhooed press confer...
...Exchange and the Dow-Jones ticker service. Through a series of secretarial slipups, the messages were delayed by nearly an hour. Unaware of this, J. Cheever Cowdin, who was both a C-W director and a partner in Cady, Roberts, telephoned his office and left a message for Gintel about the dividend reduction. For a few moments, Gintel was the only outsider with the news. Instinctively, he sold-and made for his clients and his wife's account a fat profit...
...ensuing investigation of Hurley and the strange behavior of C-W shares, Gintel was singled out for having acted on insider information and was severely reprimanded by the Exchange and fined $3,000, which was the same profit he had made for his wife's account by selling 950 shares short...
Something to Live With. Though Gintel argued that he simply acted to protect his customers, the SEC last week suspended him for 20 days from the New York Stock Exchange. The ruling: since Gintel had acquired inside information through a special relationship with an insider, he was bound by the same rule as insiders. Said the SEC: "Clients may not expect of a broker the benefits of his inside information at the expense of the public generally...
Though most Wall Street houses already follow the principle that if one partner is an insider, all other partners in the firm must be prepared to behave like insiders, hardly anyone, including Gintel, doubted that the SEC had correctly used the episode to lay down a needed ground rule. Said one young broker: "If I know what the law is, I can live with...