The sun. [volume] (New York [N.Y.]) 1916-1920, 1919-07-01
THREE BROKERS
INDICTED IN OIL
STOCK FRAUDS
Newman and Pierce Held
for False Advertisement of
Rangeburnett's Value.
CLIENTS ACCUSED TOOLE
Swami Seeks New Man in His
Probe Of Dubiour Finan-
cial Transactions.

Three brokers were indicted yester-
day by the June Grand Jury. which is
investigating stock transactions. They
are Paul A. Newman OF Paul A. New
man & Co, Walter J. Pierce OF Walter
]. Pierce & Co. and Charles b. Toole Of
Toole. Henry 4 Co.
Newman and Pierce are accused Of
falsely advertising the value Of Range
burnett oil shares, which they pro-
NOTED in a swift campaign ending
about the middle Of May. This is tie
second indictment against Newman.
the first one having charged him with
forgery in the third degree.
Toole Is accused of selling stock be-
longing to clients and failing to turn the
money over to them. Toole 4 Henry.
New York Stock Exchange Arm. was
forced into bankruptcy April by cred-
itors. The assets were estimated at
5000. 900 and the liabilities at 3sS0.000.
Douglas Henry. the other member OF
the Arm. was suspended on April 2 by
the Stock Exchange under the rule re-
Quiring that action when a member os
the exchange confesses insolvency.
Advertisemsnt Causes Indictment.
The advertisement which caused the
Joint indictment OF Newman and Pierce
appeared In the Globe on May 13. It
said:
I'VE have consistently urged the pur-
chase OF Rangeburnett OIL. Day after
day, week after week. those who needed
our advics have made enormous profits,
some as much as 500 per cent, on their
investment In seven weeks. We now pre-
dict further advance to very much
higher prices. Buy now-buy to-day"
This was published over the name Of
Walter J. Pierce & Co.. SO Broad street.
According to the District Attorney, New
man admitted that ne paid for II.
1t Is charged that at the time OF this
publication the kangeburnett company
had not taken out or sold any oil, or
paid or earned any dividends. Newman
and Pierce. the District Attorney says.
had been engaged In creating a fictitious
market value for the stock by sending
agents to the curb to buy and sell back
So on May IS the stock was traded in
at SIS, although. considering the value OF
the plant and property and the financial
condition OF the Rangeburnett company.
II was worth only 10 cents, according to
the District Attorney.
shares Take q Quick Tumble.
Then, knowing that the price was
about to fall, Newman a Pierce are rep
resented as having stopped washing
sales and begun to sell as fast as they
could to the public. On May Is Range
burnett dropped to $3.50 and a little later
It sank as low as Is cents. The county
prosecutor asserts that no one who
bought the stock as an investment made
any profit at all. 10 say nothing Of
5.700 per cent. and that the brokers
knew their advertisement was false be-
fore they printed It
On Saturday and again yesterday the
District Attorney sent a detective to the
office OF a brokerage firm OF which
many complaints have been received in
the last month. The detective wanted to
ask the head OF the hrm to visit the
District Attorneys ONCE. but was told
that he WAS out and no one knew when
he would be back.
This firm. In addition TO a downtown
office, has another place where its cir
culars are prepared and mailed and a
branch in another city. II has special
lied in an oil stock. and has also done
a general brokerage business, mostly
marginal and by instalment payments.
One man says he has written eight
letters to the firm and received no reply,
A woman says there is due her $50, 900,
including $4,000 profts that are to her
credit. according to the stock quotations.
Three other complalnants have claims
agBregating $4,000. One of them Is
anxious to recover a $1,000 municipal
bond, which he says he put up as Coz,
lateral.
In a letter received by Judge Swami
yesterday an out OF town investor says
he finished paying on March 26 for nifty
six shares of an oil stock. II has not
been delivered TO him. although he was
assured It would be as soon as trans
fcrred to his name on the oil company's s
books