In the _Annual Register_ for 1856, November 14th, we read, “Another fraud
connected with the transfer of shares and stock, but on a far grander
scale, and by a much more pretentious criminal, has been discovered.
“Of late some strange discrepancies had been observed in the accounts of
the Great-Northern Railway Company, and in particular that the amount
paid for dividends considerably exceeded the rateable proportion to the
capital stock. An investigation was directed. The registrar of shares,
Mr. Leopold Redpath, expressed a decided opinion that the investigation
into his department would be useless, and, on its being pressed,
absconded. The investigation developed a long-continued system of frauds
of vast amount, to the amount, it was said, of nearly £250,000.
“Mr. Leopold Redpath passed in society as a gentleman of ample means,
great taste, and possessed of the Christian virtue of charity in no
common degree. He had a house in Chester Terrace, handsomely furnished,
and a “place” at Weybridge complete with every luxury that wealth could
procure; gave good dinners with excellent wines; kept good horses and
neat carriages. He was a governor of Christ’s Hospital, the St. Ann’s
Schools, and subscribed freely to the most useful charities of London.
His appointment on the Great-Northern was worth £300 per annum; but it
was supposed that this was only of consequence to Mr. Redpath as
affording him a regular occupation and an opportunity of operating in the
share-market, in which he was known to have extensive dealings. The
directors of the railway appear to have been perfectly aware that their
servant was living far beyond his salary, but they considered him to be a
very successful speculator. Upon this splendid bubble being blown up,
Redpath fled to Paris; but, finding that the French authorities were not
inclined to protect him, he returned to London and surrendered himself.
“The mode in which this gigantic swindler had committed his frauds is
simple enough. Having charge of the books in which the stock of the
company is registered, he altered the sum standing in the name of some
_bonâ fide_ stockholder to a much larger sum, generally by placing a
figure before it, by which simple means £500 became £1,500, or £2,500, or
any larger number of thousands. The surplus stock thus _created_ Redpath
sold in the stock-market, forging the name of the supposed transferer,
transferring the sum to the account of the supposed transferee in the
register, and either attesting it himself, or causing it to be attested
by a young man, his protegé and tool, but who appears to have been free
from guilty cognizance. In some instances the fraud was but the more
direct course of making a fictitious entry of stock, and then selling it.
By these processes the number of shareholders and the amount of stock on
the company’s register became greatly magnified, while, as the _bonâ
fide_ holders of stock remained credited with their proper investments,
there was no occasion for suspicion on their part. How Redpath dealt
with subsequent transfers of the fictitious stock does not appear. The
prisoner was subjected to repeated examination before the police
magistrates, when this prodigious falsification was thoroughly sifted,
and the prisoner was finally committed for trial at the Central Criminal
Court in the following year. It is said that the value of the leases,
furniture, and articles of taste in Redpath’s house in Chester Terrace is
estimated at £30,000, and at Weybridge at a still larger sum. It is also
said that Redpath and Robson, whose forged transfer of Crystal Palace
shares has been recorded in this chronicle, were formerly fellow clerks.
“Lionel Redpath was tried, January 16th, 1857, at the Central Criminal
Court, and, being found guilty, was sentenced to transportation for life.
At the same time a junior clerk in his office, Charles Kent, was also
charged as his partner in the crime. It appeared that Kent had acted on
many occasions as attesting witness to the forged transfers which Redpath
had employed to carry out his ends; but, as no guilty knowledge on the
part of the former was shown, he was acquitted.
“The railway company at first attempted to repudiate the forged stock
which Redpath had put into circulation, but pressing remonstrances, not
unaccompanied by threats, having been made by the Committee of the Stock
Exchange, they consented to acknowledge it. Then came the question by
whom the loss was to be borne; a question which was not solved until
after considerable litigation. The directors asserted that it ought to
be paid out of the current income of the year, and so it was ultimately
decided. This led to a further question between the guaranteed
shareholders and the rest of the company. For the diminution of the
year’s earnings caused by taking up the fictitious stock being so great
as to render it impossible to satisfy the guaranteed dividends out of the
residue, it was contended on the part of the holders of those shares
that, by the provisions of the deed of settlement, the deficiency ought
to be made up out of the next year’s profits, so that the guarantee that
they should receive their specified dividends was not clogged with the
condition in case a sufficient amount of earnings in each year was made
to pay them. This dispute led to a Chancery suit, the decree in which
was in favour of the holders of the guaranteed shares.”