Business: A Salesman Named Sharpe

All her life, Mrs. Sarah Eaves of Brookline, Mass, had trusted in men to manage her finances. First there was her husband, and after he died, a relative, and finally that nice man named Caswell Sharpe. Sharpe’s manners were polite, his suits conservative, his way of describing stocks & bonds understandable. So Mrs. Eaves gave him charge of her $57,776 in cash and securities. Sharpe got a job in the Boston office of the 17-year-old firm of R. H. Johnson & Co. of 64 Wall Street.

For five years, Sharpe manipulated Mrs. Eaves’s investments through a series of 648 transactions, made a third of his income from commission on the transactions. In the process, Mrs. Eaves’s holdings shrank to $31,700. Last week the SEC ruled that the National Association of Securities Dealers was justified in expelling R. H. Johnson & Co. from membership, revoking Salesman Sharpe’s broker registration and suspending the registration of two of the firm’s Boston partners for one year. It was the third time in six years that the firm had been disciplined for unethical practices.