Business Week Dismisses Broadcast Editor
Aug. 13, 1988
NEW YORK (AP) _ Business Week's editorial staff was stunned as the magazine's own broadcast editor became the latest casualty in the swelling insider-trading scandal surrounding trading on pre-publication information.
S.G. ''Rudy'' Ruderman, who had broadcast market and business news for Business Week since 1981, was fired Friday for failing to disclose ''all the (stock) trades he made and the full extent of his holdings'' in accordance with the ethics code, the magazine said in a statement.
Shock reverberated through the magazine's editorial offices, where Ruderman shared quarters until he was confronted by McGraw-Hill and magazine officials when he arrived for work Friday. He was dismissed shortly after the meeting.
''It's deeply disturbing,'' said managing editor John Dierdorff. ''I fervently hope this distressing incident is the end of it,'' but he said the magazine's own investigation was continuing.
McGraw-Hill Inc., Business Week's publisher, learned late Thursday from the New York Stock Exchange's surveillance unit that Ruderman might have made four or five trades in 1988 involving stocks mentioned in the magazine's ''Inside Wall Street'' column, the statement said.
The firing came a day after the first criminal charge was filed in the scandal. William Dillon, a stock broker who had been fired by Merrill Lynch & Co., for suspcious trades was charged with mail fraud Thursday, and his lawyer said he would plead guilty.
Seven employees of Business Week's printer also have lost their jobs, as have two brokers at two other investment firms.
Ruderman, 62, did not report, write or edit stories for Business Week. But he broadcast a business news report several times a day from the magazine's office in midtown Manhattan to radio stations in New York, Boston, Philadelphia and Fort Wayne, Ind.
All stations except Fort Wayne are owned by Group W Broadcasting and have suspended the business program. Business Week spokeswoman Mary McGeachy had no comment on the Fort Wayne station.
Dierdorff said Ruderman regularly received a page proof of the ''Inside Wall Street'' column on Thursdays - hours before its official release to the public - to make sure companies mentioned in the column were not referred to in radio broadcasts. Ruderman also was free to use the information in his weekend reports, which were taped on Fridays.
Ruderman could not be reached for comment. He was not in the Business Week office, and both numbers at his home in suburban Scarsdale, N.Y., were answered by machines.
His lawyer, Alan Kaufman, said he was in the process of ''gathering whatever relevant information exists ... it's a matter that just arose this morning.''
Magazine officials had maintained since the investigation into suspicious stock trading was made public last month that its editorial employees were not involved.
Until Friday, much attention in the scandal had focused on the four plants where the magazine is printed. Six employees of the printing concern R.R. Donnelley & Sons Co. have been fired and one has resigned as a result of an in-house investigation that allegedly found workers sold advance copies of Business Week.
Merrill Lynch and Prudential-Bache Securities Inc. each fired one broker as a result of their investigations into suspicious trades involving stocks mentioned in the Business Week column. A broker for Advest Inc. resigned after being suspended by that firm.
Dillon, the broker fired at Merrill Lynch's office in New London, Conn., agreed to plead guilty to federal mail fraud charges.
Court papers indicated Dillon and an unidentified person paid various Donnelley employees $20 to $30 an issue for advance copies of Business Week.
On many Thursday mornings, Dillon allegedly bought a total of about 129 stocks of companies that got a favorable mention in ''Inside Wall Street,'' netting him $94,000 in profits.