OPTIONS<---------- Why they are Scumsucking Pigs!!!!!!! and BIG FIRM Mkt makers are losers!! ( how come noone is getting sued by the SEC or being indicted ????)
BN Morgan Stanley Fined $495,000 for Stock Manipulation (Update3)
Jan 24 2000 13:13
Morgan Stanley Fined $495,000 for Stock Manipulation (Update3)
(Adds details about accused traders in sixth paragraph;
comment from Slaine's attorney in final paragraph.)
She said Morgan Stanley is ``gratified' that the fine was
reduced. The firm has 30 days to appeal the decision to the
Securities and Exchange Commission. The conduct at issue involved
Morgan Stanley & Co. before it merged with Dean Witter Discover &
Co. in 1997 to form the current brokerage.
The NASD also reduced fines against current and former Morgan
Stanley traders to a total of $15,000, from a total of $250,000,
and eliminated suspensions that had been imposed against each. Six
traders were fined today, instead of the seven that had been
penalized in April 1998.
The NASD's allegations involve an arrangement between Morgan
Stanley's program-trading and over-the-counter desks aimed at
letting the program-trading desk avoid losses when Nasdaq 100
options expired. The OTC desk would sell to the program-trading
desk the exact amount of each security necessary to close out
stock positions established to hedge investments in the options.
The sale between the desks would occur at the day's opening price.
OTC Desk
The NASD found that the OTC desk fraudulently raised the nine
stocks' quotes before the market opened in March 17 and Oct. 20,
1995, two days when Nasdaq 100 options were to expire. This
artificially pushed up the opening prices without any purchase of
stock. The firm decreased its bid for the nine stocks within
minutes of the market opening, and in some cases didn't buy any
stock at all.
``Serious sanctions must be imposed to ensure that other
employers take care to prevent similar circumstances from
arising,' the NASD's national adjudicatory council said in its 41-
page decision.
The stocks that were allegedly manipulated were Bruno's Inc.,
Molex Inc., Tele-Communications Inc., US Healthcare Inc., Dell
Computer Corp., Linear Technology Corp., Sybase Inc., Vanguard
Cellular Systems Inc., and Willamette Industries Inc. The
companies weren't accused of any wrongdoing.
The NASD also found that Morgan Stanley failed to try to
trade before ``locking' or ``crossing' the market in as many as
five stocks on the two days at issue. A locked market occurs when
the highest buying price equals the lowest selling price, and a
crossed market occurs when the buying price exceeds the selling
price.
The NASD fines were levied on six traders, including David
Robert Slaine, the former head of over-the-counter trading,
instead of the seven who were sanctioned originally. The industry
group dismissed charges against trader Robert Scott Ranzman.
``Although the individuals were fully aware of the artificial
nature of their conduct, they were not necessarily aware that it
would be viewed as illegal manipulative activity,' the decision
said.
Slaine's attorney declined comment. Slaine left the
securities industry in January 1998, the NASD decision said.
--Neil Roland in Washington (202) 624-1868/ge
THIS IS BULLSHIT !! and the public just is supposed to say ok... Baloney write your congressman and write the SEC ..This is Bullsh!t
Washington, Jan. 24 (Bloomberg) -- The National Association
of Securities Dealers reduced by half a $1 million fine that it
had imposed on Morgan Stanley Dean Witter & Co. for allegedly
manipulating the price of some stocks in the Nasdaq 100 Index.
NASD Regulation's top judicial panel, while lowering the fine
to $495,000, upheld the thrust of a lower committee's finding
against the second largest brokerage in the U.S. The panel found
that Morgan Stanley fraudulently raised quotes on nine stocks in
1995 when the options on the Nasdaq 100 index were set to expire,
allowing the firm to avoid losses.
New York-based Morgan Stanley, which has 12,600 brokers, said
it might appeal today's decision.
``We are disappointed with the NASD's findings,' Morgan
Stanley spokeswoman Jeanmarie McFadden said. ``We strongly
disagree that the trading activity, which occurred back in 1995,
was inappropriate in any way.' |
