New-York tribune., 1910-03-30
SHORT OF HOOKING
BACKS UP KEENE.
Broker SAID Spectator Re
fused to Sell Ont.

Edward Pepper. OF the Stock Exchange
firm Of Pepper & Sternbach. James r.
Keene's personal brokers. testified yester-
day before Commissioner Alexander in the
Federal Building that on January Is and
10 his firm sold short for its own account
c. 900 shares Of Mr.. Keene's Columbus ana
Hooking Coul and Iron stock This was
ia corroboration of Mr. Keene's own tesr-
mony at a previous hearing OF the j. VI.
Fiske bankruptcy proceedings lie IN
sisted as Mr. Keene had said. that <eene
knew nothing Of the sales at the time.
The sales We're entered first in the firms
books. however. under No. account
which was MIR Keene's account Later
they were transferred 10 "P No. J. ac-
count, which M- Pepper said was the
FIRMS private account. In explanation OF
this method of entry the witness said:
No. I account was short at that time
6.i0O shares. If Mr.. Keene heard thar
some one had opened a new short account
i'm the stock for large amount We relt
thai he might make il very unpleasant for
that person. So in order that our clerks
should not learn that we We're selling the
stock short and inform Mr.. Keene. directly
indirectly. I ordered that the entries
should be made under this account. which
was already short.
After the failures occurred and the
stock broke there was no further danger
from the leakage of such information
Five DAYS later the short sale entries wer:
segregated. and No. i account was left
as 1t had been originally-short 6,i00
shares. The entries of the sales on tho
18th and 18th were transferred into pri-
vate ledger under p. No. L account"
Later. when Ralph Wolf. attorney for
the receiver Of j. VI. FIske & Co. asked
him what his object was in deceiving Mr..
keene. Mr.. Pepper said:
lie might have boosted the stock when
ne round that some one was short of so
much OF il. lie might have done what was
done ir the Northern Pacific corner. run the
stool, up to $1,000 a share. and we would
have been in very unfortunate position"
NJ. Pepper testified that Mr.. Keene was
the only one OF their customers To carry
Hooking stock, and that his various
counts with them showed he was long of
760o shares Of it. How he came TO make
the short sales. which amounted TO $500
shares. he explained as follows;
About the middle Of December received
Information that Hooking stock was inse-
cure. called on Mr.. Keene and asked him
to do so. ON the morning Of January IS
heard that the stock would probably have "a
had break. talked over with my partner
the ACCESSIBILITY of selling some ot II for o,.r
own account. since Mr.. Keene had refused
tu sell IL I felt that if the break came Mr..
Keene's account would be in had shap".
We decided there was very little risk IN
selling the stock around the market price dt
that time which was 81 Or Sc
Mr.. Wolf was anxious 70 know who gave
Mr. Pepper the information which " the
middle Of December led him 10 believe
Hooking was insecure. The witness was
not certain. said 1t came from various
sources, one OF which was a Stock Exchange
broker, who said he had refused 10 accept
any more of il.
''Since January - Mr. Keene's account
shows loss of 100000. does it not9"
asked M. Wolf. referring 20 the witness's
books.
More than that" replied Mr.. Pepper.
"He has made it UP by additional margins
10 a large extent
How great was his loss A million dol
larsc'
II couldn't say"
Have YOU covered on your short sales -
NO we are still short AT this date"
What was Mr.. Keene's reason for MOI
selling his stock when YOU asked him to-
He said it was going higher and then he
added that it was none of my y- business. -
The next hearing was set for Friday az,
ternoon. when Mr.. Keene may be called
again.