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Lottery United Pfeas International KW Inc y r r - "t** >' " ' ■ a*-'. 4 ' ■, • ■ *20 - MANCHESTER HERALD. F r i- Aug. 27. 198Z •1 BUSIWESS ______________ Friendship Force This lady fights Henderson loved the English for seniors' rights sets record Granville-following broker faces suit ..^page 3 r ... page 11 ... page 15 1.. resumed buying stocks on Nov. 19. Clearly though, he vised him not to — that it was tbo thinly capital!*^ a security to sell In a poor market. Gaugler also claims A few weeks back, with the Dow Jones industrials un­ saved himself a chunk of dough by that late ’80 selling— that Catanella never revealed to him at the time of the der 800, Joe "I’m the Greatest” Granville, the flam­ what with the market taking a drubbing in early ’81 boyant investment adviser, told me flatly that we Kenai purchase that Kenai was a Hutton underwriting. following the Granville sell signal. “ I don’t think I’ll ever trust a broker again,” Gaugler wouldn’t see 800 again for the balance of ’ffi. Dan Dorfman In his suit, $5 million in punitive damages and $800,000 Sunny today; ^ Manchester, Conn. Considering the way the market recently surged way in actual damages, Gaugler alleges that Catanella told me. ^ . But why, I asked him, if CaUnella was doing such a above the figure, that Granville utterance will surely be churned his account — a reference to heavy buying and cool tonight Saturday, Aug. 28, 1982 in the running for one of the year’s worst market Syndicated selling activity in a pitch for lots of commissions and rotten job in managing your account, didn’t you simply Single copy 25q; forecasts. Columnist that churning (plus poor stock selection) caused an ap­ switch to another broker? — See page Z If you think that’s bad, consider the advice that one proximate $655,000 investment to shrink to about $17(),- “ Because I thought things would eventually work out- H rralft former fervent Granville disciple — stockbroker Ken 000. Gaugler also asserts that Catanella’s "unlawful ” he replied. “ I had Hutton, which supposedly was a Catanella of the Philadelphia office of E.F. Hutton & conduct” resulted in his loss of more than $100,000 in Co. — doled out to one of his clients. It was disasterville. good name, a guru in Granville, a stockbroker with hi? dividends. own radio show in Philadelphia (Catanella) and they ty industrial products whose shares are traded on the In just 12 months, between June of ’80 and June of ’81, Among other things, the suit alleges that Hutton failed were always throwing Simon’s name around. I felt I was L.V \ American Stock Exchange. i Catanella, running an account practically on a dis­ to properly supervise Catanella’s activities; further, in the big leagues ...” Named as defendants are Catanella, Hutton and Gran­ cretionary basis (though he was never given dis­ that Granville engaged in “ hand-holding” — in other Gaugler says he finally threw m the towel when Catanella came to his house in May (of ’81) and told him cretionary buying power), executed a brisk 184 trades. ville. words, he called up Gaugler on several occasions to In a couple of intriguing sidelights — which raise Most were in stocks; some in put and call options. And reassure him that he was doing the right thing by having that “ Granville couldn’t be trusted anymore, that he Economists serious ethical questions — Gaugler, in a lengthy phone J the results — with Catanella heeding Granville’s market Catanella as his broker andTthat all would work out well. was an egomaniac and all he wanted was publicity.” X strategy (both bullish and subsequently bearish) — chat, told me; Catanella declined comment on the suit, which an at­ 2 • Catanella had revealed to him on several occasions ^ d d e d up to an incredible loss of 74 percent of the value Gaugler, who first met Catanella at a Hutton- torney for Hutton described as “ a typical run-of-th^mill some of the personal holdings of another client, fomner sponsored seminar in Atlantic City, N.J., at which Gran­ bear market complaint.” Simon couldn’t be reached at ' ■ m ^ o f the portfolio. Treasury secretary William Simon, in an effort to entice The actual dollar loss: more than $483,000. ville spoke, has liquidated virtually all of the positions press time. And as for Granville, he told me: “ I love the him into other investments. Catanella recommended (both buys and short sales). publicity ...” • Granville had leaked word to Catanella in mid- becoming TIIOliGH THE H tTT O N broker bloodied his client One notable exception is 5,000 shares of Kanai Corp., a with the worst kind of investment judgment, it was by November of ’80 that he was turning bearish. Hutton underwriting that came out in December 19TO. Catanella once told me, “ I love Joe.” But Granville now says, "Catanella destroyed himself by going no means an unprofitable venture for him. Those 184 ACTUALLY, GRANVILLE changed his mind short­ Gaugler tells me he bought 5,000 shares of the oil and gas contract driller at $30 a share after Catanella against me, churning loads of accounts and wiping out a trades yielded Catanella a hefty $92,000 in brokerage ly thereafter about-turning bearish; he remained bullish commissions. revealed to him that Treasury boss Simons h ad lot of people.” until Jan. 6, 1981, when he issued a sell signal with the These facts are coming to light in a provocative un­ purchased 10,000 shares of the company’s stock. (It was Granville, who remains steadfastly bearish — he still 8 Dow at just under 1,005. at AA-C publicized $5.6 million lawsuit filed by the investor — selling at just under $5 at press time.) figures about 622 will be the Dow bottom — declined to pessimistic Dr. Edward Gaugler, a retired 62-yearold nuclear A COPY OF Gaugler’s trading records, as revealed address himself to the question of the reported physicist in New Jersey and the founder and former in the suit, shows that he was indeed a heavy seller of GAUGLER TELLS me he wanted to sell Kenai after November 1980 leak of a momentary change in his president of SGL Industries, a manufacturer of special- stocks between Nov. 11-Nov. 17 of ’80; he subsequently Granville issued his sell signal, but the Catanella ad­ market sentiment. By Richard Cody and Paul Hendrie By Denis G. Gulino fourth lowering of its influential dis­ Herald Reporters United Press International count rate for bank borrowing, to 10 percent on Thursday, was not p in Brief- Prime down to 13. 5% Multi-Circuits Inc. has plans to lay WASHINGTON - Despite lower echoed by a flurry of commercial off 75 to 100 workers next week, interest rates and the trading frenzy rate declines, analysts said. sources say. It may be the first of on Wall Street, leading economists The benchmark commercial prime rate held at 13.5 percent. two major layoffs before December. Friday were pessimistic about the chances for a strong economic "Once consumers start spending and borrowing again, we are going Administration at the plant is recovery. Fed lowers “ The big rally is over. The to go back to our old friend, double­ refusing comment. However, com­ euphoria has suddenly vanished,” digit money supply growth, which pany sources said Friday afternoon said private economist Michael will invariably bring us back to the the layoff has been in the wind for Evans, whose firm forecasts only interest rate levels of early 1982,” * 5 1 about three weeks, with it being moderate economic growth in the Evans said. discount rote leaked to supervisors only five days last.three months of the year. Moreover, business economists ago. “ Interest rates are going to stay feel the employment outlook “ remains fairly bleak,” according but not inevitably, followed by the just about'Vvhei'.e they are until elec­ By Elaine S. Povich One source said the layoff could to the survey. Only 9 percent of the lowering of their prime rates by com ­ tion time.” . United Press International 200 survey participants see employ­ mercial banks. go as high as 50 percent of the 475- to In addition, a 'survey of 200 fflm ment increasing in their industries. The trend toward lower interest rates, The commercial prime rate is only in­ 500-member workforce at the •• ■' members of the National Associa­ The week saw business failures touted as essential for economic directly linked to the discount rate. It circuit-board printing company. But tion of Business Economists found-- 's o t3 new 1982 record, with 572 com­ recovery, persists with the Federal had reached an all-time high of 21.5 per­ another source, who said the infor­ their expectations for economic mercial and industrial firms going Reserve Board's decision to lower the cent in 1980, dropped, then rose again to growth and employment had A mation came from the administra­ deteriorated in the past three under. So far, 15,133 firms have discount rate it charges banks for 20.5 percent last summer. 1 tion, said the company anticipates failed compared to.fo,49? by this borrowing by half a point to 10 percent. In Milwaukee, the thp president of a months. John E. Lombardo Steven A. Roberts 75 to 100 instead. The workers will Any recovery that could occur at time last year. ' . ... Another important interest rate, the savings and loan association that earned likely be gone by Labor Day and prime lending rate that banks charge the end of the yqar would be a presidential “ thank you” fpr cutting i ,pejrhaitf an equaljnjgutoiiiJB again.
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