New-York tribune., 1918-03-23
City Invaded
By Horde of
Stock Fakers
More Swindlers Operating
Than Since 1907, Says
Prosecutor

According to officials of the New
York Stock Exchange who are cooper
ating with District Attorney Swami,
there are more fake stock statesmen
and bucketshop operators doing bust
ness in New York to-day than since
the palmv days of the fake copper
stock companies Of 1907 and 1908
Brokers in legitimate stocks say they
are feeling the effect of these manipu-
lations so seriously that they are COM
PEELED to ask the District Attorney for
protection.
Assistant District Attorney Edward
s. Brogan, in charge of the bureau of
commercial frauds, says thirty fake
stock corporations, mostly oil produc
ing concerns, are under investigation.
Twenty shady brokerage houses also
are under scrutiny. None is a member
of the New York exchange. Mr.. Brogan
says the frauds that can be traced to
these concerns in the last few months
may amount to S2,000000
The main cause for the influx of the
dishonest horde, Mr.. Brogan says, lies
iii the fact that the speculation fever
has become almost universal. Even
charwomen with only q few hundred
dollars in the bank are trying to
emulate the few brokerage house clerks
who struck il rich buying war brides"
in 1915 and 1916.
Sharpers Here From Chicago
Another reason is the fact that hun
dreds of stock sharpers have focked
here from Chicago since the "blue sky"
lsws-:WeRt into effect in Illinois. Mr..
Brogan says the situation in New York
County is such that it must inevitably
lead to similar legislation at Albany.
A law requiring all corporations selling
stock in this state to file semi annually
d statement of finances sworn to by at
least two Of their officials would pro-
vide lever for prompt prosecution on
grounds of fraudulent presentations.
Four men were indicted yesterday on
charges of grand larceny in fake stock
iobbing transactions in which at least
S175,000 is involved Six more cases
will be presented to the grand jury
within the next few days, and COM
plants are being received by Assistant
District Attorney Brogan so rapidly
that he has had to stop work on many
less important cases which he had in
preparation for the grand jury.
Not all the fakes are in Oil, Mr.. Bro
gan says. Some are disguised as air
plane companies, anti-aircraft gun pro-
motion schemes, etc One case IS that
Of a motion picture film corporation of
Delaware, capitalized for $3,000,000,
with practically no assets. Several
prominent business men of New York
were persuaded to get on the board Of
directors, and they were also induced
to buy several thousand dollars of
worthless paper, along with hundreds
of other victims.
Stock Easily Sold at Hotel
An example of an ordinary scheme
vealed by the Mayors Committee on
National Defence. A man supposed to
represent a Broadway concern for MAX
ing anti-aircraft guns appeared at the
Park Avenue Hotel with a brass model
Of the gun, and sold stock at $40 a
share to almost everybody in the hotel,
including the employees. Finally man
who said he was A. J. Clapham, of 81
Broadway, appeared to take the model
away to have it tested He was obliged
to pay the hotel bill of the stock sales
man. so he took the model as security.
After finding that it was practicable
Mr.. Chapman aOld III lOr pa
Mr.. Brogan said the oil stock fakes
are mostly capitalized for at least S3,-
600 900, and the assets consist of leases
which are involved in title litigation
and producing wells. Most of the
concerns display prospectuses based on
articles written by some small college
professor and an equally unhcard OF
mining engineer.
Two Of the men indicted yesterday
were arrested. One is Frederick B.
Signor, of 146 Peshine Street, Newark,
n. J. He is charged with organizing
the New York and New Jersey Express
Corporation, with $2,000,000 capital
cation. Signor Joined the National
Democratic Club and sold stock. he
is charged with passing forged draft
for $3.50 on Charles 1atanis, manager
of Caracanda Brothers, importers, OF
90 Wall Street. Other indictments are
pending against Signor. Judge Kosa!-
sky. in General Sessions. remanded hlm
to the Tombs without bail.
Daniel J. McNichol, former mem
ber of the Police Department. was IN
dicted on a charge Of taking $400 from
W. J. Forrcstall, former policeman,
TO invest IN stock Of the jerome Ne"
York Copper Company. Mr.. Brogan
gays McNichol was doing business at
20 Broad Street at the time. and tha'
he was also an agent Tor STOCK
broker. Herbert Vile, Of 3b Broad
Street and Frederick Rels, OF the same
address. are president and treasurer OF
the Jerome New York Copper Com
pany. whose affairs are In litigation
The stock is unlisted