The New York herald., 1920-01-07
KILROE REPORTSIN FAVOR OF
LICENSES FOR STOCK BROKERS;
WOULD PUT THE "CURB" INDOORS
Assistant District Attorney
Takes Issue with Report to
Governor Smith.

Edwin p kilIoe, Assistant District Az.
torney in charge OF the Bureau Of Com
mercial Frauds. yesterday made a report
to Edward Swami, District Attorney, IN
which he recommends that stock ey-
changes in the city be licensed and placed
under government control that they be
required to keep accurate records of all
their stock transa ctions. and that brokers
and dealers III stocks, bonds and invest
ment securities also should be licensed.
In his report Mr.. Kilroe explains that
since he took charge of the bureau in
May 1919, he and other members OF the
District Attorneys staff have investi-
gated $500 complaints from persons who
asserted they had been defrauded through
stock transactions. Through the efforts
of Alfred ]. TaEey, Chief Assistant Dis
trict Attorney; John T. Dooling and Theo-
dore l.. Waugh Assistant District Attor-
neys; Sol Tekulsky, John 3. Stanchfield
Jr., and Lester Lazarus, Deputy Assist
ant District Attorneys, and himself, twen-
ty-six indictments against thirteen de-
PENDANTS have been returned by Grand
Juries, and $40 other cases have been re-
ferred to the Magistrates courts. Fifteen
cases, he said, now are awaiting submis-
sion to the Grand Juries, and the bureau
now has on hand forty cases for investi-
cation.
Attacks Commission Report.
Mr. Kilroe also attacks the majority
report Of the commission appointed by
Governor Smith, in September, 1919. to
investigate conditions in financial circles
to learn whether blue Sky" laws would
effect a remedy. That report, signed by
Charles Fl. Sabin and others. stated that
New York is great financial centre and
it would be risky to adopt experimental
legislation. especially as such measures
have not been fully efficacious elsewhere.
'"I have carefully analyzed this report"
says Mr.. Kilroe. "and In my opinion II
is a prayer to allow the predatory Wall
street interests to continue their pillage
without let or hindrance. ] trust that
the Governor will not be deceived or the
legislature misled by this appeal.
Mr. Kilroe declared his investigation Of
the complaints of frauds in connection
with the sale of securities by unscrupu-
lous persons inclines him to the belief
that more than $4O0, 900 has been
obtained from persons who wanted ito
get rich quick" and he explains that
100000 in money and between 100000
and 100000 in securities had been re-
turned to misguided investors through the
work Of the bureau.
Follow Minority Report.
Mr.. Kilroe's recommends tons follow, in
part, those made by the minority OF Gov
ernors Smith commission. including a.
Barton Hepburn, and others. In addition
to these measures already outlined, Mr..
kiroe's recommendations follow
1.-THE New York Curb market should be
driven from the streets as public
nuisance and forced to transact its busi-
ness indoors. In this way the New York
Curb Association would be given control
of the curb market and would be enabled
to keep an accurate record or its trans
actions. Under existing conditions. any
person may trade on the curb market.
There are upward of four hundred MEM
bers in the Curb Brokers' Association and
some eight or nine hundred brokers par
tcipate in the curb market activities.
Zach broker and dealers in stocks.
bonds or investment securities should be
required TO keep a record of all sales and
purchases. The record should contain the
name and address Of the seller or pur-
chaser, a description of the stock bought
or sold. the rrice paid for 1t. and whether
or not 1t was bought on credit; .he method
py which payment was made, either by
cash or credit. and whether or not the
investor paid cash and what collateral, III
any, was deposited by the investor. Thesel
entries should be made within twenty
four hours after the TRANSACTION mas oc-
Cured and a false entry or omission toi
make an entry as required py law shouI1
be heavily penalized.
should Keep Record.
Each broker or dealer in stocks, bonds
or investment securities should be re-
ouired to keep record of the collateral
deposited by depositors. the amount of the
lien the broker has on the sail collat-
eral. the nature OF the transaction under
which the lien arose; II the collateral isl
rehypothecated by the broker, the name
and address of the person or persons with
whom the collateral has been hypothe-
Gated. the amount secured upon the hy-
pothecation and the final disposition of
the collateral.
Before any stock in any corporation