The New York herald., 1922-02-18

tnIOubu puDiiCdLlOH OI SOLnelQluS I'll
they have lost money. Many such
to see assailed, without taking into
consideration that a mere statement
Of a case does not prove it suffi-
ciently to permit of direct charges
being made through the columns Of
a newspaper, and plead frankly:
please blow this bucket shop out
of the water"
The requests for examinations,
cept by District Attorneys inspec-
ton of books and accounts, are fire.
quent. the clients of houses named
being afraid they are about to lose the
money and wishing to get first hand
informati regarding the RESPONSE
bility and integrity of their brokers.
All Want to Test Brokers.
Nearly all of the letters thus re-
ceived from persons not already VIC
timiZed make this request:
What is the best way to find out
whether my broker is on the square?"
The purpose of this article is to an
swer as nearly as possible the latter
inquiry.
by which it can be told for n GER
tainty whether one Is dealing with an
honest broker or bucketeer. The
answer to that question frequently
the bankruptcy court or the District
Attorney to step in. Then, of course,
II is too late for the Information to
be of great value. The damage al
ready will have been done and honest
money will have vanished.
There are danger signals, however,
which the intending investor in stocks
and bonds, either outright or on mar
gin,. would do we'll to heed. And there
also are one or two recourses to which
he may have access. once having in
vested, which should do much toward
confirming his suspicious or allaying
his fears.
Beware OF FIattcring Approach.
In the first place, when you are ap-
pealei to unexpectedly by q stranger,
either by telephone, mail or personally.
t. take n chance on some investment,
you should make Ii point to verify to
an absolute certainty the source from
which the solicitor obtained your name
and the grounds on which he has rea-
son to believe that you are in a posi-
ton to invest.
DO not accept a plausible explanation
of these particulars, for the best thing
the bucketeer does is to make things
look and sound plausible. If the broker
II. on the square and he thinks your
business is worth his attention, he will
have no objection whatever to aiding
you in any investigation you may wish
t. make regarding his business integ-
rity and motives.
IT should be emphasized that you
cannot be too careful about this. The
chances are your name has been OBJ
tanned from a sucker list'--that is,
any list containing n large number of
names-that the solicitor knows moth
ing about you except your name and
address. He will have anticipated most
OF your questions and will be ready
with a glib explanation.
The most usual explanation is that
O prominent customer OF ours who IS
a friend OF yours and for whom we
have made a lot Of money wanted you
t. get in on something good and asked
us to call you up" 1t Is then explaine
that, having revealed the fact that this
friend" recently has made "a lot of
money" obviously IL would be unfair
and unethical to reveal his name.
References Often Useless.
In the same connection you cannot
be too careful in your investigation of
the character of the brokerage seek
ing your business. There are known
to be one or two concerns which make
Il a business to report favorably on
bucket shops which give their names
as references. Thus the bucket shop,
being a subscriber to the service OF
such n reporting bureau. has ii ar
ranged beforehand that all reports
shall be favorable. This phase Of the
bucketing frauds will be discussed IN
a future article.
AS has been said, however, even the
best of precautions sometimes fall
The president of one of the big ex-
changes of New York is authority for
the statement that some well reputed
and widely known banks are not 200
scrupulous at times TO give a sufil-
ciently clean bill Of health to a heavy
depositor to allow him to hook a new
fish.
The unexpected and flattering ape
proach, though. may be accepted as
danger signal.
Another mark of attention from a
so-called brokerage house which
should cause the average citizen TO