Editor Testifies Trial Has Tarnished Wall Street Journal
NEW YORK (AP) _ A Wall Street Journal editor says the trial of former reporter R. Foster Winans on charges of illegal stock trading has tarnished the ″almost universally″ accepted integrity of the newspaper’s reporters.
Winans, his roommate, David Carpenter, and stockbroker Kenneth P. Felis are accused of scheming to make thousands of dollars by using advance information on stocks Winans was writing about in his column in the Journal.
″I think it hurt,″ assistant managing editor Paul Steiger testified Thursday in U.S. District Court. ″Before this there was a presumption of integrity on the part of Wall Street Journal reporters, almost universally.″
The trial was scheduled to continue today.
Winans wrote the Journal’s ″Heard on the Street″ column. In December 1983, Steiger testified, the reporter asked about moonlighting as an editor for a money manager who was writing a book.
″I concluded he should not take on this outside activity,″ Steiger said. ″I told him ‘Heard on the Street’ required a ‘Caesar’s wife’ image of integrity ... and should be observed at all costs.″
Earlier Thursday, the general counsel for Kidder, Peabody & Co. testified that he told two of the firm’s brokers not to make stock trades based on advance information from Journal articles because he did not want the firm to ″walk that close to the line″ of illegality.
Attorney Robert A. Krantz Jr. said he told Felis and broker Peter Brant to ″cut it out.″
Felis, Carpenter and Winans are accused of using information leaked by Winans to Brant about upcoming Journal articles between October 1983 and February 1984 to make over $675,000 on the stock market. They contend they did not violate any laws in the process.
Brant testified for the prosecution that Winans had given him advance information on stocks and that he then made trades through a client, David Clark, an attorney in whose account he was a silent partner.
Krantz said that when Kidder’s surveillance department noted a correlation between trading in the account and information appearing in Winans’ column, ″Heard on the Street,″ he asked Clark about it.
He said Clark denied getting information from the Journal and said he got it from other sources on Wall Street. However, he agreed to stop the trades through Kidder.
When he told Brant and Felis about Clark’s decision, Krantz testified, ″Mr. Brant asked me if we did anything wrong. I said I don’t think so, (but) I said, regardless, a firm like Kidder, Peabody was not going to let this go on and walk that close to the line.″
Brant asked him if they had to report anything to the Securities and Exchange Commission, and Krantz recalled, ″I said no. I thought all we had done was accept unsolicited orders.″