Sisto's Second

One afternoon in late 1930 a peal of the gong brought trading on the New York Stock Exchange to a halt and President Richard Whitney mounted the rostrum to announce the suspension of J. A. Sisto & Co. for inability to meet its obligations. One morning last week a peal of the gong brought trading to a halt and Exchange Chairman Edward E. Bartlett Jr. mounted the rostrum to announce the first suspension since Richard Whitney & Co. was expelled last March. It was J. A. Sisto.

Broker Joseph Sisto, debonair son of Italian immigrants, spoke no English until he was ten, worked his way through high school and Wall Street to found his own firm in 1922. His first suspension was the result of overexpansion nipped by depression. Broker Sisto, good friend of Benito Mussolini, was in Italy visiting his many clients there when the crash came. He sped home, quickly arranged to pay his creditors 50-c- on the dollar, made up the balance with shares in Sisto Financial Corp., his personal investment trust.

Reinstated by the Exchange, Joseph Sisto next made news in the Seabury investigation of Jimmie Walker. It came out that in 1929 he had given Mayor Walker $26,000 worth of bonds--just after his firm had a hand in a $5,000,000 bond issue for a taxi concern and just before Mayor Walker created a Board of Taxicab Control.

Last week Chairman Bartlett announced from the rostrum that Broker Sisto had been suspended because he was "guilty of conduct . . . inconsistent with just and equitable principles of trade." This is the Exchange's worst condemnation, the same it applied to Richard Whitney. In Joseph Sisto's case there was apparently no public-loss: he did only a limited brokerage business, carried no margin accounts, and was mainly interested in underwriting. The Exchange charged him with juggling J. A. Sisto & Co.'s books to make his personal trading account look unprofitable; he was also accused of arranging for Sisto Financial Corp. (which he controlled and which has 225 outside stockholders) to buy 1,000 shares of its stock from him at $23 a share about the same time he bought them for $15.12 1/8. This sort of thing was not uncommon in the easy-going twenties. But last week SEC, District Attorney Dewey and State Attorney General Bennett launched investigations into possible criminal angles. Said Broker Sisto: "In my opinion my conduct was in all respects proper. . . ."

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