(DOWNLOAD) "Commonwealth v. Benesch Et Al." by Supreme Judicial Court of Massachusetts " eBook PDF Kindle ePub Free
eBook details
- Title: Commonwealth v. Benesch Et Al.
- Author : Supreme Judicial Court of Massachusetts
- Release Date : January 06, 1935
- Genre: Law,Books,Professional & Technical,
- Pages : * pages
- Size : 70 KB
Description
QUA, Justice. These two indictments are now before this court on the exceptions of the defendants Benesch, Davison, and Tibbetts. The first indictment charges these defendants together with others as to whom the cases have been disposed of and who are not now before the court with conspiring to commit the crime of stealing the property of persons unknown. The second indictment charges the same persons with conspiring to have registered brokers or salesmen sell securities in accordance with an instalment or partial payment contract which was not approved by the Public Utilities Commission. G. L. c. 110A, § 8, as amended by St. 1924, c. 487, § 4. Both indictments grow out of the operations of a Massachusetts corporation known as New England Investment Trust, Inc. (name later changed to New England Investment Shares, Inc.), hereinafter called the Trust, during the period from June 1, 1926, to March 1, 1928, at which time the corporation went into the hands of a receiver. The method by which the business of the Trust was conducted, in so far as it is necessary to state it for the purposes of this decision, was as follows: The Trust sold to the public 'Collateral Trustee Shares,' so called. With the money obtained from the sales the Trust purchased in the market quantities of certain standard stocks in a large number of different enterprises registered on the exchanges, and deposited these stocks with a designated bank to hold as 'underlying shares.' On the order of the Trust the bank would issue to each purchaser a certificate of ownership of the number of collateral trustee shares purchased by him. These shares were issued against the stocks purchased and represented the proportionate interest which the purchaser owned in the underlying shares. For convenience the collateral trustee shares and the underlying stocks were divided into 'blocks' in such a manner that each block would be worth approximately $10,000, and a single collateral trustee share would sell for about $10, thus representing one thousandth part of a block. The value and the price would vary, however, with the changing market values of the underlying shares. A purchaser could buy as many collateral trustee shares as he wished up to an amount sufficient to represent one or more entire blocks. The Trust sold these shares both for cash and on instalment plans under which the certificate was not to be issued until the price was fully paid. Shares were also sold on the so called collateral deposit plan under which the purchaser continued to owe the purchase price of the shares, but pledged other securities with the Trust as collateral for the obligation. Among the supposed advantages of this form of investment were that it gave the small investor an opportunity to obtain wide diversification and also competent supervision in the selection from time to time of the underlying shares. For the purposes of this decision the enterprise may be assumed to have been in itself a lawful and proper one. It is obvious, however, that the safety of the purchaser's money depended upon the prompt and faithful performance by the Trust of its duty to purchase the underlying shares, so that the collateral trustee shares would represent real and substantial value. The Trust developed into a large business. By the time of the receivership over $10,000,000 worth of collateral trustee shares had been sold.
 "Commonwealth v. Benesch Et Al." by Supreme Judicial Court of Massachusetts " eBook PDF Kindle ePub Free){kind=link}