Derrickson, Lloyd, general counsel and secretary, National Associa- tion of Securities Dealers, Inc. -- Graham, Frank C., Jr., chairman, Board of Governors, American Haack, Robert W., president, New York Stock Exchange_ Kolton, Paul, executive vice president, American Stock Exchange.. Levy, Gustave L., chairman, Board of Governors, New York Stock Loomis, Philip, Jr., general counsel, Securities and Exchange Com- 4 Smith, Richard, Commissioner, Securities and Exchange Commission. Stuckey, Hon. S. W. (Bill), a Representative in Congress from the Wheat, Francis, Commissioner, Securities and Exchange Commission.. Wilson, Frank, associate general counsel, National Association of Wright, Thorpe, National Association of Securities Dealers, Inc. - Additional material submitted for the record by- Letter dated March 27, 1969, to Chairman Moss re ratio of aggregate indebtedness to net capital of member firms of American and New York Stock Exchanges, restrictions on member firms re small accounts, and thefts of securities from Letter dated April 25, 1969, to Chairman Moss with information circular No. 79-69 "Investment Partnerships" attached__ Letter dated April 30, 1969, to Chairman Moss responding to sev- eral requests made during the hearing, regarding target date for completion of Rand Corp. study, standards to judge opera- tional capacity of member firms, and broker/dealer functions.. Additional material submitted for the record by-Continued Article from Wall Street Journal of June 20, 1968, entitled Correspondence between Chairman Moss and Wm. McChesney Correspondence between Chairman Moss and Chairman Budge re Letter dated June 4, 1968, to Chairman Staggers from Ralph S. Letter dated November 8, 1968, to Chairman Moss from Chair- Paragraph 1003-Objects and purposes, from the certificate of Section (A) (b) (8), Securities and Exchange Act of 1934. Correspondence between Chairman Moss and Mr. Walbert re Exhibit 2-Summary of actions taken by the association to allevi- Exhibit 4-Tabulation of formal complaints and summary com- 201 202 202 New York Stock Exchange: Correspondence between Chairman Moss and Mr. Haack re Exhibit A-New York Stock Exchange member firms fails to 169 140 142 Additional material submitted for the record by-Continued New York Stock Exchange-Continued Letter dated March 3, 1969, to Chairman Moss re the possibility Page 161 173 Letter dated March 12, 1969, to Chairman Moss re statement on 172 174 18 Letter dated March 28, 1969, to Chairman Moss re OTC fails___ Accounting questions in corporate acqusitions__ Letter dated March 12, 1969, to Chairman Moss from Chairman Letter dated March 20, 1969, to Chairman Moss, from Chairman Letter dated April 4, 1969, to Chairman Moss from Chairman Letter dated April 24, 1969, to Chairman Moss from Chairman ORGANIZATIONS REPRESENTED AT HEARING American Stock Exchange: Graham, Frank C., Jr., chairman, Board of Governors. Kolton, Paul, executive vice president. Saul, Ralph S., president. Walker, James W., Jr., senior vice president in charge of legal and government affairs. National Association of Securities Dealers, Inc.: Burgess, Ralph, chief economist. Derrickson, Lloyd, general counsel and secretary. Monet, Lee, director, Uniform Practice Committee. Peters, Richard, special coordinator, fails program. Sayre, Kenneth H., chairman of the Board of Governors. Walbert, Richard, president. Wilson, Frank, associate general counsel. Wright, Thorpe. New York Stock Exchange: Buck, James, government and civic affairs department. Haack, Robert W., president. Levy, Gustave L., chairman, Board of Governors. Securities Exchange Commission: Budge, Hon. Hamer H., Chairman. Loomis, Philip, Jr., General Counsel. Smith, Richard, Commissioner. Wheat, Francis, Commissioner. SECURITIES MARKETS AGENCIES TUESDAY, FEBRUARY 25, 1969 HOUSE OF REPRESENTATIVES, SUBCOMMITTEE ON COMMERCE AND FINANCE, COMMITTEE ON INTERSTATE AND FOREIGN COMMERCE, Washington, D.C. The subcommittee met at 10 a.m., pursuant to notice, in room 2123, Rayburn House Office Building, Hon. John E. Moss (chairman of the subcommittee) presiding. Mr. Moss. The subcommittee will be in order. This morning the Subcommittee on Commerce and Finance of the House Committee on Interstate and Foreign Commerce is opening a series of hearings on the administration of the laws pertaining to the regulation of the securities markets by the administrative agency and by the self-regulatory agencies involved. The purpose of these hearings is twofold. The first is that of acquainting the members of the subcommittee with the major problems which face the administrative agencies, the self-regulatory agencies, and the industry. Eight years ago, in connection with the initiation of a study of the securities markets, the subcommittee conducted hearings; and again 5 or 512 years ago in connection with the report made by the Securities and Exchange Commission of the results of this study, the subcommittee also had a fairly thorough examination of the major problems which then faced the same agencies and the industry. Since that time there has been a change in the membership of this subcommittee and a change in the heads of the exchanges and of the national association, and accordingly we have in mind that these hearings will give us an opportunity of becoming acquainted with one another as well as with the major matters which face us today. To a greater or lesser degree it appears that some of the problems today are as acute as those that were present some 8 years ago. At that time certain representatives of the self-regulatory agencies made statements regarding undue speculation then taking place in the securities markets and those agencies took certain steps to dampen this speculation. Then also fails were significant and a disturbing feature of the market. Then also there were certain instances of the use of inside information or position. These problems exist today. The second purpose of these hearings is that of a review of the operation of the Securities Act Amendments of 1964. Those amendments were presented by the Commission as recommendations evolving from its study of the securities markets and the rules of the Commission and of the self-regulatory agencies. At the time of the enactment of that legislation it was stated that most of the recommendations of that study could be carried forward |