Imperial Valley press., 1931-04-13
SALE Of
STOCK IS
CL0UDED
State Claims Swindle In
Insurance Deal Which
Operated Here
INQUIRY SCHEDULED
Church Members Report
ed Victims OF High
Pressure Statesmen

LOS ANGELES, April l3. U.p)-
Stock operators who have sold
quantities Of questionable stock in
nine California counties may face
prosecution. it was learned today.
State department officers planned
TO leave for El Centre today to con-
fer with District Attorney E. w.
Heald. OF Imperial County, In con-
nection with action To be taken In
the matter
According TO state officials, pur-
chaserS OF the stock We're under the
impression they were buying shares
in an insurance company but that
later when they received their GER
tificates discovered they were those
of holding company and OF lit
tie value.
The field of operation for the
statesmen, Corporation Commission
er Raymond l.. Haight declared, in
cluded Butte, Humbolt. Sacrament
TO. Sonoma, Imperial, Riverside. San
Eernardino. San Diego and Santa
Barbara counties.
The following statement was re-
ceived by the Press this morning
commissioner:
With a large amount of informa-
tion in their possession. Edward F..
Dishman. chief field investigator for
the State Corporation Department.
and Ray Brockman, deputy corpora
tion commissioner. under instruc-
tionS from Commissioner Raymond
J.. Haight, will leave this week for
FL Centro TO discuss with District
Attorney f. w. Heald of Imperial
County the question whether steps
shall be taken to prosecute a group
Of men who have already sold cheap
stock at high prices in nine of Cali
fornia's counties.
THE information supplied by cor
poration department investigators
shows that practically all the pur-
chasers were members of various
religious denominations who had
been guests at luncheon or dinners
provided by the stock sellers and at
which a spokesman for the sales
men told of the advantages of in
surance stocks as investments.
Hundreds of persons were persuaded
TO part with their money. Later
they discovered that the certificates
they held were those of a holding
company and not shares in an in
surance concern. Further inyestiga-
ton showed the holding company
stock was of little value.
N form, a inf1 fhprad hU Harm ri
ment investigators, Commissioner
Haight said, show this particular
group of statesmen has operated in
Butte, Humbolt, Sacramento and
Sonoma counties in the north and
Imperial, Riverside. San Bernar-
dino, San Diego and Santa Barbara
counties in Southern California.
Their plan of operating is to have
q woman of prominence arrange a
dinner for church members or men,
bers of church auXiliaries at which
the spokesman for the stock selling
organization stresses the superiority
of insurance securities. Supplied
with the names and addresses of the
guests, the statesmen call upon them
at their homes, make a speedy
cleanup" and depart The inves-
tgators reported that l3 persons in
terviewed in Ell Centre and CaleXico
reported subscriptions aggregating
about $4,000 for the holding COM
pany stock. In San Bernardino
county 16 of the many believed to
have bought holding company
shares reported subscriptions total
ing approximately $4,000.
District Attorney Head today
stated that he has not yet been ap-
preached on the alleged shady in
surance stock deals, but stated that
his office has received numerous
complaints from people who have
been victimiZed by the stock sales
man.
A representative of the corpora
ton commissioner office called on
him some time ago, he said, in re-
gard TO the matter AT that time
little was known of the affair. He
does not know, said the district at
torney what information is in the
hands of the commissioner.