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Broker indicted for fraud
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July 27, 2000: 5:17 p.m. ET
DH Blair, no stranger to regulatory action, indicted in investor losses
By Staff Writer Jake Ulick
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NEW YORK (CNNfn) - Fifteen officers of DH Blair & Co., the brokerage that closed after being ordered to pay approximately $2.4 million in restitution to investors, where indicted for stock fraud Thursday, Manhattan District Attorney Robert Morgenthau announced.
In a 173-count indictment that named the firm and its chairman, the DA's office said a "criminal enterprise" functioned at the Manhattan brokerage from 1989 to 1998 that defrauded "numerous people" and netted the firm millions of dollars in profit.
The office said three D.H. Blair brokers pled guilty to felony charges resulting from the investigation.
In fraud practiced against customers and investors, D.H. Blair, according to Morgenthau's office, manipulating stock prices, engaging in high-pressure sales tactics and unloaded securities at prices greater than market value.
"Many suffered severe economic losses as a result of the criminal conduct of the enterprise," the DA's office said in a press release.
The office cited examples. In one, "a tugboat pilot from Brooklyn lost the $45,000 she had saved to buy a house," the release said. "While she was at sea, unauthorized trades were made in her account and when she complained she was falsely assured that she would be the recipient of windfall future profits."
Attorneys for D.H. Blair could not be reached for comment.
Morganthau said evidence leading to Thursday's indictment was developed with help from the National Association of Securities Dealers and the Securities and Exchange Commission.
DH Blair had more than 50,000 customers. While the district attorney's office had no firm number of investors who had been defrauded, losses, its said, would be in the tens of millions of dollars. Among the charges was a claim that DH Blair used boxes of customer lists stolen from Salomon Smith Barney to solicit new customers.
If convicted the 15 defendants face up to 25 years in jail. The firm is no stranger to law enforcement actions. As result of an earlier settlement, D.H. Blair established at $2.25 million restitution fund in 1998 for customers with complaints against the brokerage. The company, once located at 44 Wall Street, ceased doing business that same year.
Their registration with the National Association of Securities dealers was terminated as of 09/14/1998, NASD records show.
A search on the New York Stock Exchange's Web site uncovered 21 regulatory-related issued involving D.H. Blair. 
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