Richmond times-dispatch. [volume] (Richmond, Va.) 1914-current, 1917-07-26
'bHlnGEs FRAUD IN SALE
Of OIL COMPANY STOCKS
New York Stock Broker Brings Ac.
Il ton in United States
Court Here.
5. s. p. PATTEsoN is COUNSEL
Well.Known Richmondcrs Said to Be
X Stockholders In Concern Described
In Petition as Fraudulent Scheme
to Use Assets for Three Companies.

Richmond p. lowering, a New York
stock broker. with offices at 100 Broad
way. is mentioned as the master mind
i behind an alleged issuance of nearly
350,0oo,0o0 of stocks of the Metropoli-
tan Petroleum Corporation and the
Island OIL and Transport Company in
"a suit filed yesterday in the United
States District Court at Richmond by
Franklin D. L. Prentiss. another New
York stock broker. Prentiss secured
an injunction from the cour. restrain
ing officers of the companies from
making interchange or transfer of Sc
ourties or stocks pending the hear
ing of the case on September II.
1t is alleged further by Prentiss that
provisions of the state Corporation
z Commission have been violated. Three
photographs filled with exhibits In the
Gaze are relied upon to show that parts
stricken out by the Corporation Com
mission were rcinserted by officers OF
the company in order. Prentiss asserts,
to defraud stockholders and to make
possible the transfer of assets so that
those of one company would serve for
three concerns.
SAID TO HAVE FORMED THREE
COMPANIES ON SAME ASSETS
z According to allegations made by
the plaintiff. three companies. one OF
which was formed under the laws OF
= the State of Delaware, another under
the laws Of Virginia. and the third,
4 known as the Island Oil and Transport
& Corporation. were organized on the
! same assets--an option on certain
properties comprising oil fields alleged
/, to be extant in Mexico. 1t appears
IL.
came a controlling stockholdcr in the
FIRST of these companies formed. the
Metropolitan Petroleum Company of
+ Delaware, which was capitalized at
$4,000.
Mr. Prentiss filed three photographs
intending to show that the stock pro-
meter, lowering. had made insertions
OF such a nature in the charters OF
the three companies, he alleges. as 10
make possible the transfer of the as
sets of one company to another. there
by making the assets of one serve for
the three companies. He also alleges
that the stock promoter. by further
manipulations, was rendering it pos
sible for him to transfer all the prop
critics into his own hands.
CHARGES FRAUD IN
MARKET MANIPULATION
1t Is alleged by Prentiss that Lever
ing used dummy agents, representa-
tives. associates, including dummy
Brokers in the manipulation of the
buying and selling of said corporate
securities in exchanges and curb mar
kets. such as the curb market in the
city OF New York, by and through a
system commonly known on and In the
said curb market as the washing OF
stocks and other securities for the
purpose OF creating the public i'm
.pressicn."
s Further. that he did employ said
system by organizing and market
the securities OF the following corpor.
atoms, viz: the Delaware corporation,
with capitalization of $4,000. and
the sl2.0oo.ooo of stock OF the Metro
politan Petroleum Corporation Vir-
ginia cooperation. and the $50. ooo. 900
OF capital stock and 100000 of 6
per cent bonds OF the Island Oil and
transport Corporation, a Virginia cor
poration, all for the purpose of de-
1rauding the stockholders OF said cor
poration out of their money and with
the intention of appropriating said
money to his own use and purposes
and that OF his associates, agents and
dummies"
1t is said that stock in the Virginia
corporations against which action is
brought by Prentiss. is owned by a
number of Virginia people. among
whom are several Richmonders.
. "A temporary injunction was granted
70 MIR. Prentiss. prohibiting the trans
Ter OF any stock or securities in these
companies. pending 2 hearing of the
case. which wilrtakc place on Scptcm-
Der II. S. $. r. PHtteson, OF Richmond.
appeared as counsel for the petitioner
Edmund H. Aymar. OF New York
lily, mas also filed a complaint in the
court against the two Virginia cor
Sporat:ons mentioned above, alleging
mat nc sold 500 shares of the stock
toI me Metropolitan Petroleum Cor
poratfon at s25 per share. par value
I'm MS complaint nc says that the com
Ipany was organized with a CAPITAL OF
sSi2.ooo,ooo, stating It had acquired oil
Fights In 100000 acres in certain on
producing fields OF Mexico. when upon
investigation ii was found that tbn
corporation had never even made an
eettort to acquire any oil rights. The
lpetttion continues: within the last
ssererai months said stock abruDtlv do.
cIineo untii II is now selling at IS
GEMS per share. Your orator pur
chased 500 shares relying upon said
representations Your orator alleges
that said stock selling campaien VIC
pfeo NJ IL