FINANCIAL SCANDAL.

Manawatu Standard, Volume XLIII, Issue 420, 10 June 1922, Page 5

FINANCIAL SCANDAL.

BROKERS S’ENT TO GAOL. LARGE GAMBLING SCHEME. NEW YORK. June 8. One of the greatest financial scandals ever exposed in New York has been revealed upon the conviction of the American Cotton Exchange on a charge of “bucketing.” The exchange did not deal in actual sales of cotton, but merely conducted a largo gambling scheme, whereby market quotations were issued to defraud customers. Several individual members wore convicted and imprisoned, and the exchange was fined 5000 dollars. Other members are awaiting trial. This is the first conviction (or “bucketing” under the law passed 40 years ago. It was disclosed that brokerage houses directly gambled against their customers, who lost hundreds of thousands of'dollars.— A. and N.Z. cable.

Bucket shops arc numerous in New York, and are situated close to the Wall Street Exchange, and during boom times any besieged by speculators night and day. They are so named because a tape is transmitted from the Exchange to these places, and is received in a receptacle shaped like a bucket. On the tape is shown the latest Exchange quotations, and as the information is received, the public speculative transactions are generally forward ones, the speculator lodging a 10 per cent, cover with the proprietor of the bucket shop. Dealings on wall street are carried out under somewhat similar conditions to those in London. Members are divided into two groups, brokers and jobbers. The former work on commission, while tire latter merely speculate.