The New York herald., 1922-04-23
TODEMAND $5O0,OOO
FOR DIER CREDITORS
FROM IL Big firms
Brokers, It's Said, Got Com
missions, Knowing Trades
Were Bucketed.
COURT ACTION THREAT
Accused Concerns Are Men,
bers Of BIG Exchange
and Consolidated.
5000, 900 WASTE SEEN
Clarke Company Also Bought
Stoneham Accounts and
Failed, Says Lawyer.
100000 WASTE SEEN

Twelve firms who are members OF
the New York Stock Exchange and
the Consolidated Stock Exchange will
be asked next week to pay $500, 900
or more to creditors of Z. d. DER &
Co.. bankrupt brokers. on the ground
that these firms took commissions FOR
transaction with the DER firm when
they knew it was a bucket shop.
That announcement was made yes
terday by Saul S. Meyers counsel for
Manfred w. Enrich. receiver for e.
d. DER & Co. Mr.. Meyers said that
one well known brokerage house
from the bankrupt bucket shop and
alone obtained $3Oo0Oc in commissions
and many other reputable firms are
among those that profited The ex-
change houses will be called upon to
explain their transactions with the
DER Company and will be permitted
ito settle the matter amicably with
the consent of the receiver and ref
cree. IT they do not agree to settle,
suits | equity will be brought.
New Theory to Be Invoked.
Mr.. Myers said the legal theory on
which he would proceed is one that sell
dom IL ever has been invoked by losers
In other brokera Natures. An inten-
sive study Of the DER accounts, Mr..
Myers said. revealed that more than
SO. 100000 in assets was dissipated al
time when the approaching failure OF
the company was apparent.
Until this new move was decided upon
neither Mr.. Enrich nor his counsel could
hold out hope of recovering more than
20 or 25 cents on the dollar for cred
itors In fact. they have assured the
creditors committee that they would be
Exceedingly fortunate" if they got 25
cents on the dollar However, IL the
commissions are recovered. Mr.. Myers
said the creditors might receive be-
tween 30 and 35 cents.
Much OF the $4,000, ,000.' said Mr..
Myers. was lost by kind OF blackmail.
Dier knew that many people were aware
of the dishonest nature OF his business
and he threw large profits their way to
keep them quiet and satisfied"
To Look Up stoneham Books.
A much more searching invest.ga ton
into the transfer OF the brokerage ac-
counts of Charles A. Stoneham e. Co.
to the firm OF Il. ID. Dier & Co, which
went into bankruptcy in January owing
almost s4.000.000, was demanded yes
terday by members OF the Dier creditors
protective committee through their at
torney. Daniel w. Biumenthal OF 233
Broadway. The creditors also ask an
investigation into the alleged transfer
OF accounts by Stoneham & Co. 10 E. H..
Clarke & Co., which also went into bank
ruptcy This Is the first time the Clarke
concern has been named in connection
with Stoneham or the DER case.
Mr.. Bumenthal returned last week
from an extended trip through the mid
die West, where he interviewed a large
number OF customers OF y. ID. DER
& Co. many OF whom lost their life
savings In the crash. Some were for
mer customers OF Stoneham a. Co i.
whose accounts were transferred when
Mr.. Stoneham sold out his business
to DER
Several Of these creditors, according
10 Mr.. BluementhaL never gave their
consent TO the transfers. while others
assert. ne says. that they received as
surances that everything was all right.
because Dier representatives told them
Mr.. Stoneham was silent partner III
der & Co. after the sale, ana that
his money was behind that concern.
After careful study of the bank
ruptcy proceedings" MIR. Blumentha,
said yesterday. II do not agree with
the statement Of Receiver Enrich tina.
very brilliant achievement has been
accomplished by getting Mr.. Stone.iom
to offer a settlement OF 100000 from a
purely moral standpoint nor does tho
evidence which ] have in my possession
show Stoneham received the consent Of
all his customers IN transferring their
accounts to Dier. have also clicnts
who state they they consented TO the
transfer OF their accounts only because
OF the assurance fnpm Stoneham &
Co. that the Dier firm was absolutely
reliable and financially safe"
Mr.. Blumenthal displayed communica-
tions in support of his stand, and said
Continued on Pare Eighteen