The people's voice. [volume] (Helena, Mont.) 1939-1969, 1940-02-21
How widows
Continued From Page one)


licized by the Founders companies,
and 90 the control which the Foun-
ders companies exercised over the
market action of their securities.
"The persuasive effect upon the in
vesting public of these three factors
in combination is readily apparent,
the SEC report states "On the one
hand were the alluring claims of the
Founders companies to possession of
an unerring formula for investment
profits, supplemented by unrivaled ia
cilities for their realization.
"Juxtaposed, and in seeming viola
ton of these claims were % the
continuous upsurge of the market
price of the Founders securities, (2)
numerous stock split-ups and divi-
dends, and co the increasingly large
earnings steadily reported by the
Founders companies"
Examination of the nature of the
profits, the SEC continued, show that,
contrary to the claims advanced by
the United Founders Corp. group,
these profits had no relation whatever
to the Founders far-flung interna-
tional investment activities, but were
instead produced through unpro-
claimed but repeated use of profit
cient technique of intercompany deal
ings within the framework of the
Founders system"
Suckers were roped in ON the basis
of the company's advertising which
claimed that the organization was an
international outfit which could buy
securities in parts of the world where
the market was weak and sell them
where the market was strong.
This hocus-pocus was carried so far
that the first of the companies was
named the international Securities
Trust Of America" the second was
called the Second International Sc
curities Corp" while the third was
titled United States & British Inter
national Co., Ltd"
"By dint of constant repetition, the
Founders formula apparently served
to create in the mind of the invest
ing public an image of the Founders
companies as great international in
vesters, skillfully riding the waves of
the international business cycle and
scientifically garnering profits on the
worlds security markets, guided by
the superlative research division of
American Founders Corp" the SEC
reported.
The truth of the matter was, the
SEC said, that when the suckers lost
faith in stocks and the stock market,
the profits" of the various companies
disappeared and the whole structure
collapsed, taking with it substantial
portion of the half billion dollars
put in by the investing public.
The huge concern, which at one
time dominated resources in excess of
81, 100000, was started in 1922 by
Christopher Foster Coombs, then a
bankrupt investment dealer in Boston,
and VIM. R. Bull, "a security dealer
of limited resources operating in
Bridgeport, Conn.," who formed the
firm of Weeks, Lewis and Bull Co.
In all, there came to be % invest
ment companies affiliated with the
United Founders Corp, constituting
by far the largest group of investment
enterprises in the U. s., which in turn
effectively dominated seven security
distributing enterprises, and at least
IL other companies, including nine
utility holding companies, the largest
OF which held joint control of the
billion dollar Standard Gas and Elec-
trio Co. utility empire.
VIM. R. Bull, the report said, is at
present sponsoring two other invest
ment trusts, Republic Investors Fund
and Sovereign Investors.