New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1904-12-13
WASH SALES CHARGED
Accusations in Involuntary Bank
ruptcy Petition against Munroes.

Serious charges made by the petitioning
creditors, Donald Gordon g. Co: Seneca d. Brown
g. Co. and John NJ. Shaw q Co, In involuntary
petition in bankruptcy filed yesterday in the
United States District Court against Munroe
Munroe. brokers. at No, Broad-st. The firms
troubles are due its operations in the stock OF
tbs Montreal and Boston Consolidated Mining and
Smelling Company According to the allegations
Of the three petitionng creditors. Munroe & Munroe
SO manipulated the sales of the stock through a
series OF wash transactions that its price was
greatly enhanced
The petitioners state that for a considerable
period prior to December 7 the alleged bankrupts
were engaged with Ferry ". Leach. Archibald G.
Loomis and others in underwriting syndicate
TO manipulate 1000 shares OF Montreal and Ros-
ton stock and in creating a fictitious price for
the stock, and also that I'm effectuating the
said scheme Munroe Munroe employed various
stock brokers, your petitioners among them, TO
purchase large quantities the stock, and at the
same time employed other brokers to buy the
said shares, by means OF which fictitious sales
many thousand shares were sold. and the market
price greatly enhanced"
The petitioners further say that by reason Of
the alleged fraudulent scheme the alleged bank
rupts able sell large quantities OF the stock
at prices far in excess OF fits real value and in
excess OF the price which could have been OBJ
tanned by any other means.
The petition also alleges that the underwrit-
ing syndicate advanced large to Munroe q
Munroe to enable the concern TO carry out the
operations complained Of The petitioners allege
constituting bankruptcy that, among
other things December Munroe & Munroe
paid Loonlis and Leach $500 and also, the
day. second OF $500. 1t is averred
that these paid to reimburse Leach
and Loomis 'in whole or in part for the advances
referred to-
Your petitioners" the petition goes on TO say
were ignorant Of the fraudulent scheme. and
received and executed IN good faith the purchas-
ing orders given them
John NJ. Shaw & Co allege that they
December employed by the alleged bankrupts 10
purchase 1440) shares OF Montreal and Boston stock.
Munroe Munroe agreeing to accept the same
for delivery December S. that they bought in the
open market 5000 shares paying the vendors s12S5;
that the day Munroe g. Munroe employed
Shaw Co to purchase Il. 500 shares of the same
stock but that before accepting delivery the
end order the latter firm discovered the fraudulent
character of the transaction. and delivery was
fused.
J. N. Shaw G. Co. further allege that they discov-
cred that the transactions had not been made in
good faith. but TO quote the petition. were n
lawful and fraudulent and contrary 70 the usages
Of brokers in the city OF New-York.'
John NJ. Shaw & Co. continuing, say that
their refusing the 1880 shares the vendors resold
part of this stock at a lower price, leaving a de-
fcieucy of 5000 for which they seek TO hole John
NJ Shaw & Co. liable Before the delivery of the
second order. Shaw & Co. say. the alleged bank
rupts repudiated the contract and refused to ac3
cept delivery or the STOCK ! nal lelt Inc aueged
bankrupts indebted to Shaw & Co. TO the amount
of S32
Donald, Gordon & Co make similar charges rela
tive the purchase of 1Q0Gl shares of the stock,
for which they paid ao193 which sum, they aIlege,
is still due
ployed to buy 1880 shares for which they paid.
with brokerage added, S5l.253. which is the amount
Of their claim.
As an act constituting bankruptcy, the petitions
allege that the payments to Leach & LOomiS were
made when the firm OF Munroe & Munroe was in
solvent, payment other creditors being refused,
thereby creating a preference. Other preferential
payments, 10 creditors unknown TO petitioners, 1t
is stated made. The appointment Of re-
ceiVer is asked
A representative Of Munroe Munro. ys-erday
afternoon said that that firm denied they were
bankrupt. and that they had conferred with their
attorneys and would oppose the granting of the Pc
ttion of involuntary bankruptcy.