| Show SWINDLING BY UNDERWRITING A Number of Such Concerns in Iii Chicago Raided by United States Marshals THEIR VICTIMS NUMEROUS to have nac Obtained 1 a alion lion by r Chicago NOOd Noc big Ing hr to 10 be bethe bethe the largest frau concerts ot of the tho kind ever operated In ChIcagO were raIded here by United Stat tl hy by postal inspectors nd On men accused ot of promoting the fraudulent enterprIses el w re Id ed to the federal authorities the tho men accused ot of the tho swill dies diu h had ii runny victims anti neatly b by the tho scheme The Tho homes ot of thu Ihu nen arrested and th Ihl companies lICh bich the authorities say aY thay are follow tollow WI W J 1 Root noot hl ut W S Ii H Welch eleb vice Ice pc mind W V U D ot of the Central States Under Underwriting UnderwrIting writing Guaranty l president ot of the tru Iru dentin Frank H 11 American n ml SecurIty company Ezra C pc president National Stock Guarantee and the Bank Bankens ens cn Credit Mercantile David O 0 Owings Stock company Hurlbut Hoot and Welch tero fero taken to time the United Stales district court and gave bonds bond for each for tor theIr liP up tor or trial tria to the Postal the tho other amen nen who vImo Were weN arrested were locked liP up In jail be because CaU cause Ih tIme were unable to CUtO curo bonus The alleged fraudulent operation ot of time IlS as explained by the postal au Is that time the underwriting com coin panics were In fn with certain ot of the brokers with whom they divided lcd tho fee teo taken for tor the supposed under which WB was never done dono by the alleged The plan by whIch the thOo swIndles were welo carried on It Is II alleged by the tho federal authorities involved representations In Inthe inthe the United that the under underwritIng underwriting writIng and Ind guaranty companIes had give trust companies certain assets and collateral to bonds given the Investors until tha th time the bonds matured The given bonds It at maturing nil all tIme tho way WIY from 20 to 40 years In using the m nits to 10 circulate their ot of doIng business the thOo alleged fraudulent companies informed corpo corporate rate rille enterprIses desiring money that the could secure funds by calling lit at atthe the Chicago ollices On arrival In Chi the corporations would he be introduced ced to alleged capitalists who represented that they available to fInance bu business ProposItions und and would buy the tho stocks provIded the corporation would have havo them underwritten by hlo companies It Is asserted that these alleged allried capitalists then advise o that time the work lie be done by thu tho Central States Underwriting Guaran Guaranty ty company the tho lII Corporation Sc SecurIties company or time tho National Stock Guaranty company ot Sun San Francisco Francsco The brokers In the tho alleged fraudulent Jt transaction would represent to the tho vIctim that they Ret get no compensation for tor theIr work un less leml they actually sold Rold the tock stock end endt t they ey would bo be content wIth a l lon of oC from to ono per cent on such sueh stocks as they sold The victim was wall assured there thero could be no doubt time tho stocks stacks under written would rellI realize e us as the capitalists to whom the victim hall had een Intro would bo be certain to buy them Th The brokers broilers would then timen take the men tIme the underwriting to the of at the guaranty company and arrange arrango for tor guaranteeing the tho bonds on of oC 1 a fee of oC 1 per ver cent ot of the amount ot of underwriting Time TIle federal ties assort that In each ench case the thu un company compan uns IR give I a fe fee that In II many cases the lep lepre re resenting time the company seeking the tho un Imad scarcely left the un by time the troll front I door bo be forum forn time the broker who the cap would enter through another en trance and get lIet halt the f fee anti the tho underwriting venturo Ihen ho be clo closed ed b by time Underwriters and time Iha brokers no being to sell the tack stock The say the men arrested l never a 11 In which less time Involved amid that they In II mih cases obtained us as much u II 3 worth ot of stocks stock to |
