was held to have a good title to the stock as against the owner, though the broker had been guilty of conversion.1

Trading by Brokers Against Customers' Orders. Laws 1913, ch. 592. Penal Law, Sec. 954. In effect May 17, 1913.2

A broker who trades against the orders of a customer, who has employed him to buy and carry stocks, bonds, etc., on margin, is guilty of a felony, punishable by a fine of not more than $5,000 or imprisonment for not more than one year. Every member of a firm who does or consents to such an act is guilty under this section.3

A custom creating in the broker an interest adverse to that of his customer has been disapproved.*

5

It has been held that a broker cannot act as principal and agent in the same transaction without his customer's consent. Such dealings are held to be contrary to public policy, and the question of fraud or injury to the customer is immaterial.6

Delivery of Memoranda of Transactions.

Laws 1913, ch. 595. Penal Law, Sec. 957. In effect Sept. 1, 1913.7

A broker must deliver to his customer a statement or

Whitlock v. Seaboard Nat. Bank, 29 Misc. 84.

"For full text see infra p. 209.

'See The Exchange and its Constitution, supra p. 37.

'Day v. Holmes, 103 Mass. 306.

'Porter v. Wormser, 94 N. Y. 431.

Pickering v. Demerritt, 100 Mass. 416.

'Mayre v. Strouse, 5 Fed. 483.

'For full text see infra p. 212.

memorandum of each purchase or sale made for him, containing a description of the securities purchased or sold, the name of the person, firm or corporation from whom they were purchased, or to whom they were sold, and the day, and the hours between which the transaction took place. Refusal to deliver such a statement or memorandum within twenty-four hours after written demand therefor by the customer, or delivery of a statement or memorandum which is false in any material respect, is a misdemeanor, punishable by a fine of not more than $500 or imprisonment for not more than one year or both.

This statute is entirely new. It has always been the custom of brokers to deliver to their customers a memorandum of transactions giving the above required particulars, excepting the time of execution. It is doubtful whether this provides any added security, though in case of fraud (bucketing), the burden of proving execution of the order is more easily shifted when it is shown that the notice erroneously specifies the time.

Manipulation of Prices of Securities.
"Rigging the Market."

Laws 1913, ch. 253. Penal Law, Sec. 953. In effect
April 10, 1913.1

Any person who influences or attempts to influence the market prices of securities by means of fictitious purchases, sales, or other transactions or devices, is

'For full text see infra p. 208.

guilty of a felony punishable by a fine of not more than $5,000, or imprisonment for not more than two years, or by both.1

The Anti-Bucket-Shop Law.

Penal Law, Sec. 390.2

(1.) One who makes or assists in making any contract for the purchase or sale of securities with the intention that the contract shall be settled upon the basis of the market quotations on any exchange, and without intending a bona fide sale; or

(2.) when such market quotations shall reach a certain figure without intending a bona fide purchase or sale; or

(3.) based upon the differences in such market quotations at which such securities are bought or sold;

or,

(4.) who, as proprietor or person in charge, conducts any bucket-shop, or knowingly allows therein any contravention of the preceding three sections, is guilty of a felony.

Every broker must furnish to a customer upon written demand therefor, a written statement containing the names of the persons from whom the securities have been purchased or to whom they have been sold, and the time and place of the transaction, and the amount and price thereof. Refusal or neglect to do so within

See The Exchange and its Constitution supra p. 25. 'For full text see infra p. 199.

forty-eight hours after the demand is prima facie evidence of violation of the statute.1

On conviction of a domestic corporation of a second offense, the Supreme Court may, upon an action by the Attorney-General, dissolve the corporation; in the case of a foreign corporation, it may restrain it from doing business in this state.2

"Bucket-shop" is defined as "any building, or any room, apartment, booth, office, or store therein, or any other place where any contract prohibited by" the statute "is made or offered to be made." Keeping a bucket-shop has been made an offense by statute in Illinois, where it is unnecessary to prove the intention of the keeper to keep such a place.5

A customer is entitled to the balance of his account with a "bucket-shop" as shown upon the trial in an action for accounting.

Printed agreements on the back of bought and sold notes, for the protection of the broker against his liability to furnish the names of customers whose orders were offset against the plaintiff's were held to be unreasonable, against public policy, and void."

Penal Law, Sec. 392. "Penal Law, Sec. 393.

'Penal Law, Sec. 394:

See the Exchange and its Constitution supra p. 26.

See also infra p. 179.

'Weare Commission Co. v. People, 209 Ill. 528.

See also Peller v. Leiter, 189 N. Y. 361.

'Soby v. People, 134 Ill. 66.

Caldwell v. People, 67 Ill. App. 367.

"Haight v. Haight & Freese Co., 46 Misc. 501.

Transactions by Brokers After Insolvency.

Laws 1913, ch. 500. Penal Law, Sec. 955. In effect May 8, 1913.1

A broker who, knowing that he is insolvent, accepts or receives from a customer ignorant of his insolvency, money, or securities otherwise than in liquidation of, or as security for, an existing indebtedness, whereby the customer loses such money, etc., in whole or in part, is guilty of a felony punishable by a fine of not more than $5,000, or imprisonment for not more than two years, or by both. A person is insolvent within the meaning of the statute whenever the aggregate of his property shall not, at a fair valuation, be sufficient in amount to pay his debts.

This law is new. It is analogous to and was no doubt adapted from the provisions of the Penal Law which provide that an officer or employee of a bank or an individual or private banker who receives a deposit knowing that such bank or banker is insolvent, is guilty of a misdemeanor, if the amount or value of the deposit is less than $25; and of a felony if it is $25 or over that sum.

A broker who knows that another broker is insolvent and imposing on his customers, and who continues to coöperate with him and assist him to buy stock on margin, secured by stocks known to belong to the insolvent broker's customers, is liable equally with the insolvent broker to his customers for his acts.2

For full text see infra p. 210.

'Austin v. Hayden (Mich.) 137 N. W. · 317.