The New York herald., 1922-07-01
DER BUCKET TUTOR
SERVING LONG TERM
Continued from First Page.

the receiver at a hearing before Sea-
man Miller. referee.
The witness was Thomas r. Arm
strong. He went to work for Hughes
Dier in 1915. he testified, as board room
and customers man. and stayed with
the firm about two years. At first
orders were properly executed.
when did the bucket shop trans
actions begin?" Mr.. Myers asked him.
ITO the best of my knowledge. when
kohn came in--Edn in L. kohn."
What is the history of Kohn?'
Well he is now doing IL to II years
or something of that sort"
That is the man who was recently
convicted in Philadelphia of grand
larceny and busket shop transactions"
Yes"
You say he went with Dier about
1918? What was his position there?"
He was an office manager-a sort
of general manager"
How the Bucketing Started.
There had been talk of bucketing pre-
vously, the witness said, and later he
mentioned instances of transactions that
looked peculiar and spoke of CONVEX
sation he had with Hughes as to his in
ability to find securities he thought
were being carried. He recalled that
Hughes had sold his little home and
bought a much moye expensive one in
T. ha 1a1
that both Hughes and Dier were worth
| $500, 900.
| Then Armstrong told of his own duties.
After Dier's tickers were taken away
he was sent over to Bells office Orders
were telephoned there, and he watched
quotations. spending the whole day there.
The business that thus went from Dier
to Bell ran 700. 500 or perhaps as high
as 1000 shares a day. He didn't know
just what Bell got out of the business,
however
Bell & Co. really became a branch
OF Hughes & Dier?"
We'll, no; Hughes & Dier really acted
as an individual customer of Bell and
the orders were relayed over there AS
sion was simply turned over to Bell G.
! Co. for this time being. That was the
idea and general impression. Whatever
inside dealings there were, L don't know"
Dier applied for membership in the
New York Stock Exchange. An investi-
cation was made of the Hughes g. DER
books, and instead of getting them a
| n nemberhip in the New York Stock Ex-
change the firm lost it's ticker service
because of what the representatives OF
the stock exchange found on the books
Then, with the tickers gone, Hughes G.
DER turned around and did business
with the facilities of the New York Stock
Exchange house of Bell & Co., turning
over the commissions for the time be-
irg."
Why He Was Worth $500 a Week.
Just how the bucketing was done was
told later by Armstrong. The chief In
this work was Maury Brooks, who then
was getting s35 week. but who. when
DER failed, as other testimony shows,
was receiving $500 week because Dier
thought his services were worth that
Brooks. like Armstrong, spent most of
his time in the Bell office. Armstrong
testified:
81 was set over there to accept the or
dcrs as they were given to me over the
phone or as Brooks would advise me on
the conditions. For instance, if Gus
toner came to Hughes & DER and said.
Buy me 100 shares of Steel. the oper-
ator would get Bell & Co.--get me-on
the phone and say, Buy 100 shares of
Steel Brooks would come to me and
say. Don't you think we had better sell
so and SOP and all that sort of thing"
That would be a notification Of the
order?"
Yes. Brooks used to come over and
go over the stock position of the house
and If he thought they were long too
much he would sell. He was running
the business right there from the stock
end of it."
'lt looks as IL Brooks was really TAX
ing position against customers. nullify- /
ing orders"
1T had that appearance. yes He did