A federal grand jury in Philadelphia has handed up a sealed indictment against two former brokers with the Hornblower Weeks Hemphill Noyes office here, 12 others defendants and 9 unindicted co-conspirators for their roles in a complicated scheme allegedly designed to manipulate the price of Magic Market stock.
Joel M. Friedman attorney in charge of the Justice Department's Philadelphia-based organized crime strike force, said the sealed indictment returned Tuesday was the result of a 2 1/2-year-long investigation into the trading of the stock on the Philadelphia Stock Exchange and in the over-the-counter market during 1971 and 1972. During that period, the price of Magic Marker stock rose from $6.50 a share to more than $30 Friedman said.
"By various means, those charged caused the price of the stock to rise artificially while they caused the public to lose millions of dollars in purchases of hundreds of thousands of shares of Magic Market stock at inflation levels." Friedman said.
The indictment, and an accompanying criminal information filed against the defendants and 7 unindicted co-conspirators, cnarge them with 31 counts of conspiracy, mail fraud, income tax fraud, secruties fraud and securities manipulation.
A team of investigators from the strike force, the Securities and Exchange Commission, the Internal Revenue Service and the U.S. Postal Service developed the case, Friedman said.
Six central figures - Yiddy Bloom, a Miami, Fla., real estate investor and hotel owner; his son Jerreld Bloom; Kack Silbiger of Shawnee Mission, Kansas; Abraham Salaman of Philadelphia; Ira Ingerman, president of Magic Marker and chariman of Delphi Capital Corp., and Burton Dubbin, an officer of a Miami-based importing company - allegedly designed a scheme to buy and to induce others to buy large blocks of the stock in order to keep its price rising on a daily basis.
An unindicted co-conspirator who was a specialist trading on th Philadelphia Stock Exchange allegedly was paid $10.000 to disclose his book to the defendants daily to buy shares in the company.
Another unindicted co-conspirator was allegedly paid $20,000 for writing an article favorable to Magic Marker in a financial publication.
Robert Street, the former manager of the Washington office of Hornblower Weeks, and Bernand Cronin, then a registered representative in the same office also were charged for their cooperation in purchasing the stock.
Fred Englert, counsel for the brokerage firm in New York, said both Street and Cronin were dismissed by the firm in November, 1972 prior to the federal investigation.
Englert said Hornblower Weeks "has conducted its own investigation and it has no knowledged of a criminal conspiracy to manipulate" the stock.