Evening star. [volume] (Washington, D.C.) 1854-1972, 1930-10-14
Stock Juggling, Mismanage-
ment and Fraud Charged
in Plea for Writ.
MORTGAGE DISCOUNT co.
INJUNCTION is SOUGHT
Group of Stockholders Claim Rights
of Those Advancing Capital
Disregarded.

.GhargeS OF intricate stock juggling
schemes, mismanagement and fraud are
made against Harry Wardman and
several of his business associates in q
suit for an injunction and receivership
filed in Alexandra today by a group
of the stockholders of the Wardman
Mortgage & Discount Corporation.
The court is asked to appoint q
suitable receiver to take over the as
sets and operation of the corporation
and to grant an injunction restrain
ing the officers and directors of the
Mortgage & Discount Corporation from
holding a meeting on October 20 for
the purpose of dissolving the corpora
ton.
Named as defendants are Harry
Wardman, Thomas p. Bones, Henry J.
Robb, j. Floyd Cissel, Robert N. Tay-
lor. K. Parrish Wood, jr.; James D.
Hobbs and the corporation.
Committee Back Of Suit.
The suit was brought by Robert B.
Smythe, Theodore S. Grape and Charles
D. Davis, a committee of stockholders
representing larger group WnOSS
holdings of stock amount to more than
S100, 900 in actual cash." Attorney
Harry F. Kennedy, under the direction
of Harry A. l.. Barker, chairman OF the
Stockholders Committee, filed the suit.
Your compliments are informed and
believe" the court is told, that the
defendant corporation was. by the de-
PENDANTS Wardman, Bones and Hobbs,
conceived in fraud, organized In deceit,
xfyith q utter
and wilful disregard of the rights OF
the preferred stockholders and minor
| ity common stockholders, who adj
vanced all of the capital"
1t is charged that the corporation
was originally organized through straw
men, who subsequently were replaced
by Wardman, Bones and Hobbs, and
that these three men managed ana
controlled the corporation in such q
manner as to fraudulent deceive,
misiead and misrepresent tt the conn
plainants and the public generally the
extent of interest and investment OF
| the defendants and the assets Of the
company, the class Of securities 70 be
dealt in by the company and the pur-
pose of organization and the plan under
which stock was TO be issued"
Series Of Corporations Named.
l III YVES CkldI SCu bA1nb eAAC AC-
| PENDANTS organized, or caused TO be
organized, series of corporations, each
of which bore the name of Wardman,
said names being so similar as to be
confusing and misleading. The corpo-
rations named in the suit are:
Wardman Realty e. Construction Co..
Waroman Construction Co., Wardman
Realty g. Finance Corporation, Ward
man Real Estate Properties, Inc,
Wardman Corporation and Wardman
Administration Co. Wardman, Bones
81 Hobbs are alleged to have acquired
control, directly or indirectly Of all OF
these corporations.
It is further stated that advertising
material sent out by the defendants set
forth that stock in the defendant cor
poration was to be sold on a unit basis,
one share of preferred and one share OF
/ common for SIPS, with the par value
Of the preferred stock fixed at 500. De-
| spite the fact that the announced plan
of the corporation called for cooperative
management it is alleged, the defend
ants, without authorization, issued to
themselves of "a ,955 shares of common
or voting stock, as against $3.50 shares
| issued to the actual purchasers of pre-
| ferred stock, thereby gaining absolute
control of the corporation. 1t Is fur
ther charged that Wardman, Bones d
| Hobbs paid nothing whatsoever for
their common stock, although the other
stockholders, in effect, paid SIS share
| for theirs.
Purported Plan Outlined.
On or about February l, 1924, and
after Wardmap, Bones and Hobbs, as
officers and directors of the defendant
corporation. took control, it was alleged,
Continued on Page 2, Column 81