| Show FRAUD CHARGED TO N N. N 1 Y V. V BROKERS NEW YORK May 27 UP State RI-State State Attorney General John J. J Bennett Jr today asked in state supreme court that all partners of the New NewYork NewYork NewYork York stock exchange firm of Paine Webber Co a leading commission commission commission commis commis- sion house with offices in 19 cities be forever enjoined from engaging in the securities business In New NewYork NewYork NewYork York state on the ground of alleged frauds against the public Bennett in allegations sworn to toby toby toby by his assistant John R R. accused the defendant partners of Paine Webber Co of employing fraudulent practices upon the state and upon the public in connection with substitution of unmarketable securities of little or no value for diversified portfolios of a number number number num num- ber of investment trusts in which the public invested approximately Nineteen individuals and four corporations corporations corporations cor cor- are arc named as defendants in addition to the Paine Webber group Investment Cited During the past six months according according according ac ac- ac- ac cording to supporting I affidavit operations involved at least six Investment trusts representing representing representing an aggregate public investment invest ment of over These trusts he said were First Income Trading corporation Continental Continental Continental Conti Conti- Securities corporation Reynolds Reynolds Reynolds Reyn Reyn- I olds Investing Co Inc i shares corporation of Delaware Bond and Share Trading corporation corporation corporation corpora corpora- tion and Burco Inc supporting affidavit said in part The practices complained of consist consist consist con con- of the repeated operations of one or more groups of individuals acting through common agents in acquiring control of security investment investment investment in in- vestment trusts financing the purchase purchase purchase pur pur- chase of control out of the portfolios portfolios portfolios port port- folios of the trusts themselves and then proceeding to out the trusts' trusts liquid assets by substituting I for marketable securities in their portfolios v various rious unmarketable se securities securities se- se including in particular the stocks of certain Canadian corporations corporations corporations corpora corpora- organized or controlled by the defendants themselves Order Issued Pending hearing on oil Bennetts Bennett's application application application ap ap- ap- ap for a permanent injunction injunction injunction tion against all of the defendants Supreme Court Justice Samuel I I. I today issued a threefold threefold threefold three three- fold restraining order and set June 7 as the date for he hearing ring to show cause why temporary and permanent permanent permanent perma perma- nent injunctions should not be is issued issued issued is- is sued restraining all defendants from engaging in the securities business in New York In the preliminary order one group of defendants including a former Paine Webber attorney are immediately restrained from engagIng engaging engaging ing In the securities business in New York A sec second nd group of defendants in including including including in- in two individuals Americus J. J Leonard and John B. B Shearer and four investment trusts Burco Inc corporation of Delaware Bond and Share Trading corporation and First Income Trading Trading Trading Trad Trad- ing corporation are similarly enjoined en en- joined Restrainer Issued The Paine Webber Co partners and partners of the erstwhile New NewYork NewYork NewYork York stock exchange firm of Prentice Prentice Prentice Pren Pren- tice Brady now in process of liquidation grouped together in the third section of the order are immediately immediately immediately im im- im- im mediately restrained from engaging in financial transactions affecting control of investment trusts and also from selling securities from the portfolio of any investment trust without written permission of all holders of interest Bennetts Bennett's action was the outgrowth outgrowth outgrowth out out- growth of an investigation of several several several sev sev- eral months into the affairs of Continental Securities corporation in which Prentice Brady played a part The complaint in the action al alleged alleged alleged al- al a conspiracy by a group of American and Canadian financiers to obtain custody and control of investment investment investment in in- vestment trusts for the purpose of looting and wasting the treasuries and assets thereof Paine Webber Co were named defendants in that action as having financed a transaction which the complaint alleged they knew was fraudulent |
