New-York tribune., 1922-09-15
Stock Exchange
Gusts Brokers
On Bond Charge
HelIwig & Ruester Accused
of Selling Raritan Refin-
ing Corporation Bonds
Above Market Quotation
ST, 600. 900 Loan Floated
Firm Explains Clients Need
ed Funds So Badly Stress
Sales We're Necessary

Heliwig & Ruetter, members Of the
Stock Exchange since December 81,
1902, were expelled from membership
yesterday on charges that they had
sold bonds of the Raritan Refining Cor
poration at or around par, when sales
we're recorded in the open market below
that quotation. The two members,
against whom action was taken direct
IL. were Theodore A. Hellwig and Rob-
ert II. Reuter-.
The bonds of the refining company
were offered publicly about year ago,
Charles E. Reuter-, who is also listed
as a member of the brokerage firm,
ard was also formerly treasurer OF the
refining company, asserted that Ss2o,-
600 of the bonds were sold at prices
ranging between 9TH and los and that
about $751; 900 were disposed Of, during
a period when the company was greatly
in need of funds, Is to 2Q points lower
The general charge of the exchange
governing committee was that the firm
had been guilty of conduct inconsist-
ent with just and equitable principles
of trade" in continuing to sell and
clear the bonds Of corporation which
it had assisted in the fotation Of
81 900 900 loan. The following formal
statement was issued by the firm:
Firms Statement to Public
"This afirm owes its friends and the
public an explanatory statement in re-
iation to the surprising action of the
board of governors in expeiling its two
floor members from the Stock Ex-
change.
aSomething over a year ago this firm
assisted in the sale of large part OF
q million dollar issue of the bonds Of
a new corporation. The bonds were
distributed at or about par. Since the
original sale the corporation has been
successfully launched and is now earn
ing considerably over the interest
requirements of the bonds.
aLast fall and early spring the cor
poration continued the sale OF these
bonds TO investors at or about par, and
such sales were cleared through us.
At or about the same time the corpora
.ion found itself in need of funds for
The completion of the plant in order
20 start operations and it became nee
essary for it to sell at material con-
cessions small amount of these bonds,
which bonds were also cleared through
our office, owing to the fact that one
of our members was treasurer of the
corporation.
Needed Funds Temporarily
"These stress sales on the part of
the corporation, coupled with the fact
that other holders, financially embar-
rassed, were disposed TO sell their
bonds at sacrifice, brought about d
condition which the Stock Exchange
has charged amounted to market for
the bonds at q price materially under
par 1t has been our claim that these
few occasional sales at prices under
par did not create what could properly
be called market and were in no sense
a proper criterion to determine the
fair selling price of the bonds.
"The corporation the bonds of
which are involved is in splendid con-
dition; has paid to date. owing TO q
participating feature of the bonds, in
terest at the rate of more than IL per
cent, and, as already stated, as earning
considerably more than the interes;
requirements, so that the bonds have
been regarded by the corporation and
by our firm as worth their face value
"We have been charged by the gov
ernors with conduct inconsistent with
equitable principles of trade in con-
tinuing to clear the bonds for the
corporation in sales at or about par
during the period when the stress sales
were made at material concessions
under par. This firm has never fel,
that these isolated sales under stress
conditions constituted market in such
a sense that the prices of such sales
have been taken into consideration in
the sale by the corporation of it's
bonds. With this position the ex-
change authorities have shown their
dlsagreement hv their nctio,,