The Level Playing Field and Rules of Fair Play

Abstract

Mr Edgar D. Brown of Pottsville, Pennsylvania entrusted $100 000 to a large US bank to be invested in ‘safe’ bonds. A representative of the bank’s securities affiliate advised Mr Brown that the US government securities that he owned were ‘all wrong’ and reinvested his account in Viennese, German, Greek, Peruvian, Chilean, Rhenish, Hungarian and Irish governmental obligations as well as bonds issued by private US corporations. Mr Brown was also persuaded to borrow to finance additional investments. When the bonds declined in value, Mr Brown complained, and was told by his broker that it was his own fault for buying bonds: ‘Why don’t you let me sell you some stock?’ Once reinvested in stock, Mr Brown’s portfolio still lost money, and he eventually sold out, sacrificing most of his capital.¹