- Jul 25, 2002
- 10,053
- 0
- 71
They're Crooks - do you trust them ?
The more that cretain people crow about how being able to invest in the Stock Market is the means to keep Social Security solvent ,
the more Wall Street and the Money Machine proves that they are a Numbers Racket being run by theives for their own benefit.
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<Can you say GREEDY, like in Bastards>
Federal prosecutors today unsealed securities fraud charges against 15 current and former New York Stock Exchange specialists, accusing them of engaging in criminal activity on the trading floor and benefiting at the expense average investors.
Manhattan U.S. Attorney David N. Kelley said the defendants carried out patterns of fraudulent trading between 1999 and 2003, and the Securities and Exchange Commission, which filed separate civil charges, said the abuses cost investors more than $158 million.
Specialists named today were employed by five different firms -- Fleet Specialist Inc.; Bear Wagner Specialists LLC; LaBranche & Co. LLC; Spear, Leeds & Kellogg Specialists LLC; and Van der Moolen Specialists USA. The firms themselves paid $247 million last year to settle related civil charges.
Specialist traders "showed a disregard for their legal duty that was both profound and at times, profane," Mark K. Schonfeld, director of the SEC's Northeast regional office, said in a prepared statement.
In some cases, several specialists made statements explicitly denigrating public orders placed through the exchange's electronic trading system, known as the DOT. Unnamed specialists said "[Expletive] the DOTs" and "Screw the DOTs," according to an SEC news release.
Specialists have a legal obligation to match customer orders with each other and ensure that the trading system functions smoothly, government lawyers said. Instead, the traders accused today allegedly bought or sold stock for their own accounts at prices that were better than those they gave to existing public orders. That practice is known as "trading ahead," regulators said.
Specialists also used a trick known as "interpositioning," in which they bought a customer "sell" order and then sold at a higher price into an opposite "buy" order from another customer. Such moves allowed the specialists to make "guaranteed, riskless profits for their firms' proprietary accounts at the expense of customer orders," the SEC said.
Also today, securities regulators settled civil charges against the NYSE itself for failing to police and discipline the errant specialists. The exchange, which did not admit or deny wrongdoing, agreed to spend $20 million to beef up audits. The exchange also said it would start an 18-month pilot program to provide video and audio surveillance of activity related to least 20 stocks on the trading floor.
The SEC cited the exchange's "overbroad" monitoring system, which was set up to capture "only the most egregious instances" of trading violations.
Richard G. Ketchum, the exchange's chief regulatory officer, said the NYSE has strengthened its enforcement unit and installed new technology to prevent improper trading since the investigation began in 2003. NYSE's regulatory unit now reports directly to the board of directors, rather than to the exchange's chief executive, to help insulate it from pressure from NYSE member firms.
"Specialist firms have changed, as have we," Ketchum said in a news release.
The individuals indicted today face a maximum prison sentence of 10 to 20 years on each securities fraud charge, along with fines of $1 million to $5 million, prosecutors said.
"These defendants broke the rules repeatedly, they cheated the markets and they cheated the investors who relied upon them," U.S. Attorney Kelley said.
Defense lawyers for the specialists could not be reached for comment early today.
The SEC said it continues to investigate the conduct of individuals in the case.
The more that cretain people crow about how being able to invest in the Stock Market is the means to keep Social Security solvent ,
the more Wall Street and the Money Machine proves that they are a Numbers Racket being run by theives for their own benefit.
------------------------------------------------------------------------------------------------------
<Can you say GREEDY, like in Bastards>
Federal prosecutors today unsealed securities fraud charges against 15 current and former New York Stock Exchange specialists, accusing them of engaging in criminal activity on the trading floor and benefiting at the expense average investors.
Manhattan U.S. Attorney David N. Kelley said the defendants carried out patterns of fraudulent trading between 1999 and 2003, and the Securities and Exchange Commission, which filed separate civil charges, said the abuses cost investors more than $158 million.
Specialists named today were employed by five different firms -- Fleet Specialist Inc.; Bear Wagner Specialists LLC; LaBranche & Co. LLC; Spear, Leeds & Kellogg Specialists LLC; and Van der Moolen Specialists USA. The firms themselves paid $247 million last year to settle related civil charges.
Specialist traders "showed a disregard for their legal duty that was both profound and at times, profane," Mark K. Schonfeld, director of the SEC's Northeast regional office, said in a prepared statement.
In some cases, several specialists made statements explicitly denigrating public orders placed through the exchange's electronic trading system, known as the DOT. Unnamed specialists said "[Expletive] the DOTs" and "Screw the DOTs," according to an SEC news release.
Specialists have a legal obligation to match customer orders with each other and ensure that the trading system functions smoothly, government lawyers said. Instead, the traders accused today allegedly bought or sold stock for their own accounts at prices that were better than those they gave to existing public orders. That practice is known as "trading ahead," regulators said.
Specialists also used a trick known as "interpositioning," in which they bought a customer "sell" order and then sold at a higher price into an opposite "buy" order from another customer. Such moves allowed the specialists to make "guaranteed, riskless profits for their firms' proprietary accounts at the expense of customer orders," the SEC said.
Also today, securities regulators settled civil charges against the NYSE itself for failing to police and discipline the errant specialists. The exchange, which did not admit or deny wrongdoing, agreed to spend $20 million to beef up audits. The exchange also said it would start an 18-month pilot program to provide video and audio surveillance of activity related to least 20 stocks on the trading floor.
The SEC cited the exchange's "overbroad" monitoring system, which was set up to capture "only the most egregious instances" of trading violations.
Richard G. Ketchum, the exchange's chief regulatory officer, said the NYSE has strengthened its enforcement unit and installed new technology to prevent improper trading since the investigation began in 2003. NYSE's regulatory unit now reports directly to the board of directors, rather than to the exchange's chief executive, to help insulate it from pressure from NYSE member firms.
"Specialist firms have changed, as have we," Ketchum said in a news release.
The individuals indicted today face a maximum prison sentence of 10 to 20 years on each securities fraud charge, along with fines of $1 million to $5 million, prosecutors said.
"These defendants broke the rules repeatedly, they cheated the markets and they cheated the investors who relied upon them," U.S. Attorney Kelley said.
Defense lawyers for the specialists could not be reached for comment early today.
The SEC said it continues to investigate the conduct of individuals in the case.
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