Indictments Against Thomas Hayes, Raymond Anderson, Promoters of "Blue Sky" Fisheries Product Company, Oct. 12, 1925

Bills of Indictment Against Fisheries Product Officers. . . Attempt Will be Made to Extradite Officers of Defunct Company

Bills of indictment charging false pretense and conspiracy to cheat and defraud were returned last week by the Brunswick County grand jury against Thomas H. Hayes and Raymond J. Anderson of New York, president and vice president, respectively, of the Fisheries Product Company, a “blue sky” corporation formed at Wilmington in 1918, which wen to the wall last year after selling $7.9 million worth of stock.

The return of the bills was made known in a telegram from Solicitor Woodus Kellum to Attorney General Dennis G. Brummitt, who is ringing the criminal action.

Steps will be taken immediately, it is anticipated, to extradite Hayes and Anderson from New York and to bring them to trial in Brunswick County. The state, through Attorney General Brummitt, Solicitor Kellum and J.C.B. Eringhause of Elizabeth City, expects to make a vigorous fight for conviction.

The actions follow an extended investigation conducted into the operations of Hayes and Anderson by Mr. Brummitt in pursuance of a resolution adopted by the last general assembly. The resolution asked merely that the attorney general submit the evidence collected to the solicitor, but he and Governor McLean, following conferences, decided to take prompt steps to prosecute and to employe special counsel to assist. To that end, Mr. Eringhause, a leading attorney of eastern North Carolina, was designated.

The Fisheries Products Company is now in receivership and no hope has been held out that the thousands of stock purchasers throughout the Carolinas will realize anything from the liquidation of what assets are left.

Total stock investments in the company from the date of its organization to its failure have been estimated at more than $7 million, most of the money coming from two states.

From the front page of The Robesonian, Lumberton, N.C., Monday, Oct. 12, 1925. While the newspaper spelled the attorney’s name J.C.B. Eringhause, this is actually John Christoph Blucher Eringhaus, who would become governor of North Carolina. If you’d like more information on him, NCpedia has information at www.npedia.org/biography/ehringhaus-john-christoph

“Blue sky” investments in 1925 generally referred to highly speculative investments and outright fraud with “nothing behind them but the blue sky.” They sold more than $7 million in stocks that were inflated by hype, fraud, or speculation. When people talk about blue-sky investments today, the investments/stocks may include pump-and-dump schemes and market manipulation. Blue-Sky Laws have made investment fraud a little less blatant than it was in 1925, although an investment may, in fact, still turn out to be based on hype.

newspapers.digitalnc.org/lccn/sn84026483/1925-10-12/ed-1/seq-1/