Hurwitz v. Pink (96 F.2d 605, 1938)

AUGUSTUS N. HAND, Circuit Judge.

Frank Cohen, a defendant who appeals from the decree herein, received $81,288.50 from the Underwriters Finance Corporation, and in exchange therefor delivered to it $10,000 bonds at par of the Seaboard Continental Corporation, and $300,000 bonds tpar of Tribune Bond & Mortgage Company, all of which were worthless. Out of the $81,288.50 in cash and other moneys obtained from unrelated sources securities were purchased through various brokerage houses upon the order of Cohen and were thereupon transferred by him, or his agent, to Lloyds Insurance Company of America. As a result of the diversion of assets from •Underwriters Finance Corporation, it was rendered insolvent, was thereafter adjudicated a bankrupt, and the complainant, Albert Hurwitz, was elected trustee. On August 16, 1933, the superintendent of insurance of the state of New York took over the business of Lloyds and became the official liquidator. The defendant Louis H. Pink, as such superintendent, is in possession of some of the securities purchased with the •$81,288.50 and of the proceeds of such of them as have been sold by Lloyds and later by the liquidator.

The trustee of Underwriters Finance Corporation brought the present suit against the superintendent