Julian Petroleum Corporation (nicknamed "Julian Pete") was a

Los Angeles Los Angeles ( ; es, Los Ángeles, link=no , ), often referred to by its initials L.A., is the largest city in the state of California and the second most populous city in the United States after New York City, as well as one of the world' ...

based oil company. It collapsed in 1927 amid large-scale fraud, taking over $150 million from 40,000 investors.

Background

Julian Petroleum was started by Courtney Chauncey ("C.C.") Julian in 1923. C.C. Julian had been successful the previous year in drilling for oil in

Santa Fe Springs, California Santa Fe Springs (''Santa Fe'', Spanish for "Holy Faith") is a city in Los Angeles County, California, United States. It is one of the Gateway Cities of southeast Los Angeles County. The population was 16,223 at the 2010 census, down from 17,43 ...

. The company sought out investors with colorful advertising such as: "Widows and Orphans, This Is No Investment for You! ... My appeal is addressed to people who can legitimately afford to take a chance." However, the California Corporations Commission began investigating the company for fraudulent sales promotions.

Downfall

In 1925, C.C. Julian sold his interest in the company for $500,000 to Sheridan C. (S.C.) Lewis and Jacob Berman (alias Jack Bennett). The following year the company merged with California-Eastern Oil Company. An audit revealed the company had issued 4,200,000 unauthorized shares of stock and on May 5, 1927, the

Los Angeles Stock Exchange The Los Angeles Oil Exchange was a regional stock exchange in Los Angeles, California. Founded in 1899, in 1900 the name was changed to the Los Angeles Stock Exchange. In 1956, it merged into the Pacific Coast Stock Exchange. History The Los Ange ...

halted trading in Julian Petroleum. The company had created financial pools from 400 prominent local businessmen, including

Cecil B. DeMille Cecil Blount DeMille (; August 12, 1881January 21, 1959) was an American film director, producer and actor. Between 1914 and 1958, he made 70 features, both silent and sound films. He is acknowledged as a founding father of the American cine ...

and

Louis B. Mayer Louis Burt Mayer (; born Lazar Meir; July 12, 1882 or 1884 or 1885 – October 29, 1957) was a Canadian-American film producer and co-founder of Metro-Goldwyn-Mayer studios (MGM) in 1924. Under Mayer's management, MGM became the film industr ...

, to support the over-issuance of stock. The funds were loaned to Julian Pete for short terms at high interest rates. A number of these investors were charged with violating state usury law but either the charges were dropped or they were acquitted.

Aftermath

S.C. Lewis, Jacob Berman and stockbroker Ed Rosenberg were acquitted in May 1928 on charges involving the Julian Pete fraud. However, District Attorney

Asa Keyes Asa Keyes (August 9, 1877 – October 18, 1934) was district attorney of Los Angeles County, California from June 1923 until 1928, when he was found guilty of accepting a bribe from the Julian Petroleum Company and was sentenced to five years' im ...

was charged with accepting about $100,000 in bribes from Julian Petroleum officials in connection with the acquittal of the accused officials. He was found guilty in February 1929 and sentenced to one to 14 years in prison. He served 19 months before being pardoned by Governor

James Rolph James "Sunny Jim" Rolph Jr. (August 23, 1869 – June 2, 1934) was an American politician. A member of the Republican Party, he was elected to a single term as the 27th governor of California from January 6, 1931, until his death on June ...

Buron Fitts Buron Rogers Fitts (March 22, 1895 – March 29, 1973) was the 29th lieutenant governor of California, from 1927 to 1928, and Los Angeles County district attorney thereafter until 1940. Early life Born in Belcherville, Texas, Fitts received h ...

, who was the lieutenant governor, resigned in 1928 and was elected

Los Angeles County Los Angeles County, officially the County of Los Angeles, and sometimes abbreviated as L.A. County, is the most populous county in the United States and in the U.S. state of California, with 9,861,224 residents estimated as of 2022. It is the ...

District Attorney and appointed prosecutor in the trial of Asa Keyes.My First Forty Years In California Politics 1922 - 1962 by Robert V. Keitny - Oral History Program University of California Los Angeles
/ref> S.C. Lewis and Jacob Berman were convicted in November 1928 and were sentenced to seven years in prison on charges relating to the sale of nearly $1 million in gold bonds of the Lewis Oil Company. C.C. Julian faced charges in 1931 in

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of conspiracy to defraud investors of $3.5 million. He then jumped bail and fled to

Shanghai, China Shanghai (; , , Standard Mandarin pronunciation: ) is one of the four direct-administered municipalities of the People's Republic of China (PRC). The city is located on the southern estuary of the Yangtze River, with the Huangpu River flowin ...

, where he committed suicide in March 1934. Financier Motley H. Flint was shot and killed in July 1930 in a courtroom by machinist Frank D. Keaton. Keaton said that he lost $35,000 in Julian Pete stock and blamed Flint. Flint was formerly a vice-president of the Pacific Southwest Trust and Savings Bank and had been indicted several times, but the charges were dismissed or he was acquitted. He was awaiting trial on another indictment when he was killed.

Background

Downfall

Aftermath

References

Further reading