Re: but I bet the evil crooks on wallstreet loaded up - maybe I am wrong however.
You are not wrong. There was a case very similar to this reported early last week. Wall Street specialists on the NYSE will be doing jail time for frontrunning their clients.
chicagotribune.com
<SNIP>
Improper trading charged at NYSE
15 indicted `cheated markets, investors'
By Andrew Countryman, Tribune staff reporter. Tribune news services contributed to this report
Published April 13, 2005
In another black eye for scandal-tarred Wall Street, 15 former specialists at the New York Stock Exchange were indicted Tuesday, accused of improper trading that took millions from investors.
The 15 were charged with securities fraud, with federal prosecutors alleging they illegally profited between 1999 and April 2003 by conducting thousands of trades from their own accounts, rather than properly matching customers' orders.
Meanwhile, the Securities and Exchange Commission filed civil suits against the 15 and five others, alleging securities laws violations for the same activities. It also censured the NYSE itself, claiming it failed to adequately monitor and detect the improper trading.
Specialists handle trades at the NYSE, first by matching buy and sell orders, and then by making trades from their own accounts when necessary to provide liquidity.
By positioning themselves between customers' matchable buy and sell orders, prosecutors said, the specialists made illegal profits of roughly $13.5 million, while the damage for customers totaled just more than $19 million.
Several of the specialists appeared in court Tuesday in New York, pleaded not guilty and were released on bond. If convicted, each could face up to 20 years in prison and a $5 million fine.
"These defendants broke the rules repeatedly, they cheated the markets, and they cheated the investors who relied upon them," said U.S. Atty. David Kelley.
The 15 worked for the same five firms that, without admitting or denying guilt, agreed a year ago to pay nearly $242 million to settle similar allegations.
The specialists were accused of "interpositioning" and "trading ahead," in which they would trade from their own accounts for their own benefit, rather than matching customer orders as required.
<Continues.....> |
