New-York tribune., 1922-02-20
BantOn Wants
Blue Sky Act to
End Buckcting
Favors State Legislation
to Cover All Securities
Offered for Sale and
to License the Vendors
Suggests u. $. Postal Aid
Believes Less Than Tenth
of the Victims Have Made
Complaint TO Officials

Nssiii iI'tH'iit w VII ''a"iS
A blue sky law covering all securities
offered for sale in this state and pro
viding for the registration and licensing
of persons and concerns dealing in SC
curities was advocated yesterday by
District Attorney Banton rs a means
of permanently stamping out the
buckctshop scourgc
Mr. Banton also suggested, as fur
ther safeguard for investors, the
passage of Federal statute forbidding
tho use of the mails to market or offer
for sale any security until the Post
office Department had passed upon its
merits
Would Purify Stream at Source
Citing the revelations of the past
week in connection with the anti bucket
shop drive and emphasizing tho need
of state supervision over the broker
age business, the District Attorney
said:
"Lct us purify tho stream at its
source and not be content with trying
to cleanse the tainted waters. Hereto
fore we have been very much like tho
man from whom one demon was cast,
but who later was found possessed of
seven demons, each more vicious than
tho one
1t was not cnourh Mr. Banton
pointed out, for the District Attorney
periodically to prosecute n few crooks
and cause them to be imprisoned. Pun
ishment. he said. was a temporary
means of abatement of the evil There
must be something done, he declared,
TO
voaled to exist in the trading marts.
but TO definitely protect the unwary
from bucket shop brokers who trade
against customers accounts and from
traders IN worthless securities
During the week Just passed. said
the District Attorney, IL have had
opportunity, through the great number
of complaints received in this Office
against persons who claim to be stock
brokers. of studying the conditions in
New i ork County relating to invest
ments or gambling in securities. and
have reached certain definite conclu-
sionS.
Great Majority Of Victims Silent
81 do not believe that 10 per cent Of
those who have been deeced have made
complaint in the Office of the District
Attorney. It is not an uncommon thing
for person to come 30 the District
Attorney and, OH learning that pub
liCity may attach to the complaint,
leave the Office without making com
plant. preferriug to bear his loss
rather than to let it be known that he
had been foccod The District Attor-
ney also receives q large number of
letters and kilograms which are never
followed by personal call, and which
indicate that the writer's prefer to bear
their loss rather than to be known as
having engaged either in investment
in wildcat securities, speculation in
other securities or gambling with
bucket shops.
at has also impressed itself upon my
mind that those who have either IN
vested or gambled are persons who are
not financially able to undertake such
d hazard These sharks prey upon two
predominant characteristics of human
nature one is tho inclination to gam
bic and the other is the desire to get
rich quick. The average salesman for
these concerns is little short Of CON
hdence man, and the average security
that is sold on solicitation is Of as
much value as a gold brick
1T seems to me that there should be
immediate legislation providing for a
blue-sky law to all securities offered
the registration and licensing Of all
persons and concerns who deal in Sc
curltles. either as brokers, under
writers or IN any other capacity, and
proVdlng Tor periodical inspections Of
the business Of such dealers
Suggests Federal Aid
"7hc United States government could
help. The government now has force
Of competent postoflicc inspectors. A
Federal statute might be passed forbid
ding the use Of the mails to market or
oher TOR sale any security until after a
'horough investigation by the Post
office Department it was found that
such security was sound
Edward S. Brogan. Of Columbus
Ilrcie who was formerly Assistan.
District Attorney. in charge OF the Bu
roau of Commercial Frauds. said vos-
tcrday:
This is the psychological tjmc 70
strike an effective blow against stock
SWlndling aud all forms of commercial
and financial frauds Attorney General
DaAghcrty recently called conferences
OF all the Federal, state and county
prosecuting officials to stop the So
called crime wave. He has gone on
record III favor OF uniform blue-skv.
legislation.
fersonallN. | do not believe that
state legislation in itself is adequate
to end this evil The solution Les in
Federal legislation. as was recommend
ed by the Treasury Department during
the exposure Of 1918. supported by
unliorm bluc-sky laws in every state,
and aided by a national vigilance com
mlttee of representatives. Of every
prominent financial business mcr-
chants and manufacturers association
or organization in the country"