Former Wall Street Journal reporter R. Foster Winans testified in his own behalf Monday, claiming that stockbroker Peter N. Brant had suggested the scheme of trading stocks based on information before it appeared under Winans’ byline in the paper’s widely read “Heard on the Street” column.
Winans, who wept several times during his first public statements concerning the criminal charges, flatly contradicted earlier testimony by Brant in which the broker, who has been fired from Kidder, Peabody & Co., accused Winans of initiating the plan. The case is being heard by U.S. District Judge Charles E. Stewart Jr. without a jury.
Winans, 36, his roommate, David Carpenter, 35, and another broker, Kenneth P. Felis, 31, are being tried for criminal violations of securities laws, mail and wire fraud and conspiracy. Brant pleaded guilty to the charges last summer and has appeared as the government’s key witness. The government alleges that the group realized profits of $900,000 but suffered losses of $225,000 in illegal trading on the leaks from the Journal reporter.
Denies Being Warned
During his daylong appearance, Winans also contradicted the testimony of several of his former Wall Street Journal editors who had said that the reporter had been informed on numerous occasions of the newspaper’s policy prohibiting the release of information before publication. He said he had only found out about the newspaper’s conflict-of-interest policy after the Securities and Exchange Commission launched an investigation of his alleged illegal acts.
As soon as Winans took the stand, his attorney, Don Buchwald, asked him who had broached the idea of trading in stocks based on information about companies that was to appear in the column. Winans said that Brant had suggested it on Oct. 12, 1983, at a Manhattan tennis club and that the plan was finalized on a Long Island golf course four days later. Winans had made the same charge when questioned by the SEC last year.
Winans testified that he told Brant, “I would continue to write in as pure a journalistic fashion as possible. I would not change, alter or omit anything in order to suit his purposes.”
In rapid-fire questions Buchwald asked his client if he had ever agreed to delay or speed up the appearance of a “Heard in the Street” column, to include any information that did not belong in the column or to exclude or change anything. “Were you ever paid to tout a stock, or to include or exclude or give any item greater or lesser prominence?” Buchwald asked. Winans responded with a quick series of “no’s.”
“Were you ever paid to write a column?” the lawyer asked.
“Never,” said Winans, adding with a smile, “other than by the Wall Street Journal.”
But the defendant turned serious when questioned about his understanding of the legality of the acts he has admitted doing.
“If you had believed it was a crime would you have done it?” his lawyer asked.
Winans broke into tears and wiped his eyes with a handkerchief. “I would not have,” he whispered.
Winans also denied having knowledge--until the SEC launched its formal investigation--of three invoices “for decorating services” that Carpenter is charged with falsifying to cover up $31,000 in payments that he and Winans received from Brant and Felis.
Winans conceded during his testimony that he had lied to SEC investigators in their initial telephone interview with him on March 1, 1984, in which he participated “voluntarily” at the Journal offices. “When asked if I had received money from Mr. Brant, I answered ‘no,’ ” Winans said.