Knuckle Rap

Sedate Kidder, Peabody & Co., one of the most conservative firms in Wall Street, last week had its knuckles rapped by the Securities & Exchange Commission.

The SEC charge: back in 1942, Kidder, Peabody & Co. had $963,000 of Jamestown, Franklin & Clearfield Railroad Co. bonds they hoped to sell for $502.50 each, but the open market price for the bonds was only $497.50. To protect the firm against a trifling underwriting loss on the issue, loyal Kidder, Peabody employes jumped into the market, bid up the price of J.F.& C. bonds to $502.50. Punishment for this deal: an SEC...

Want the full story?

Subscribe Now


Learn more about the benefits of being a TIME subscriber

If you are already a subscriber sign up — registration is free!