New-York tribune., 1922-03-06
Banton Insists
On Law to Open
Brokers' Books
Bucketshops Thriving Under
Immunity Denied Bank
ers and Insurance Firms,
District Attorney Asserts
Swindlers i'm Two Glasses
Urges Remedial Legislation
in Behalf of Financial
Supremacy of New York

District Attorney Joab II. Banton is
speS a statement last night bearing
OF the nature of the complaints pour
ing into his office in connection with
hie campaign against bucketshops, aud
the kind of legislation necessary to
protect the public from financial
pirates.
He divides The complaints into two
general classes Cd those in which the
victims have been defrauded by false
REPRESENTATION OF existing facts or
false promises of future conditions.
and (2) those in which brokers have
taken an order to buy or cell securi-
ties, but who bucket the order-that
is, they never buy or scllor who
trade against orders-which means that
they use their superior knowledge of
the. market against the knowledge OF
their customer-or those who make
wash salee, that is, where the brokers
operate together, making pretended
sales of securities, but which in fact
are not sales, and by which false
market value is created above or be-
tow the actual value Of the securities.
Swindlers Get S750.o0G,ooo
By reason Of the false promises made
With respect to the first class, says Mr..
Bsnton, enormous sums of money have
been stolen from the public "T'he sale
Of wildcat securities has gone to such
sn enormous extent" he adds, chat it
is estimated the people of the United
States have been ewindled out OF $780,
0o0, 1000 within the last few years This
class OF crime fourishes during days Of
prosperity. when money is abundant,
and the smooth-tongued salesman is
- l. l. l
any amount OF money for fake securi-
Legislation pending at Albany, says
the District Attorney, relates to this
class of complaints and is an effort to
prevent the continuance Of this kind Of
fraud. Such legislation makes a good
beginning" Mr.. Banton continued. at
is safe to say that not one out of
twenty issues offered to the public by
telephone or oral communication is
worth anything. The same ratio will
prevail in other issues, except such as
are offered by reputable banks and
we'll known houses.
at does seem that something should
be done to protect the people against
this form Of swindle. and just why any
person should oppose such LEGISLATION
Is a mystery to me-
The District Attorney says there are
ample statutes to punish for the Of
lenses referred to. but that there are
no laws to enable him to prevent such
crimes. He believes it will be difficult
to punish those in the second class be-
cause of the trouble in obtaining the
offenders books, through which the
crime must be proved. If for one rea
son or another these volumes cannot
be- obtained the crime goes unpun-
ished. "That we permit such condi-
tinn fO NreUai1 ic - ~
Banton.
Brokers Enjoy Immunity
The District Attorney points out how
bankers and insurance firms have been
brought under the control OF the gov
ernment, while brokers enjoy greater
immunity than any other class of finan-
cIai institutions. "Why should brokers
have any greater immunity than bank
ers and insurers asks Mr. Banton.
I'VE have taken away from the bank
ct his right to fall behind the consti-
tutional privilege that his books should
not be used against him and hesitate to
enact laws for like protection to those
who deal with brokers'.
eve have laws which will safeguard
the customer Of the broker just as we
now have laws which safeguard the de-
positor and insurer.
II have received in the last two
months letters from persons in nearly
every state in the union asking that
protection be given them against the
crooked conduct of those who act now
as brokers in New York County New
York is the center OF the financial in
terests of the world. We must make
New York safe for the investor. The
demand that it be made safe is in,pera
tive and the people will not be stilled
much longer.
Victims Intent on Protection
This statement is reflected in q bill
now pending before the State Legisla-
ture TO forbid trading in securities on
margin and trading in other commodi,
ties, such as cotton, grain, etc, or fu.
tures. Such a bill, if passed, would
destroy the exchanges and take from
New York its financial supremacy, but
such bill only reflects the struggling
of those who have been defrauded and
are seeking protection.
IF remedial Legislation is not passed
by those who are friendly to New