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Strategies & Market Trends : The Final Frontier - Online Remote Trading
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To: TFF who wrote (11680)6/23/2006 9:24:37 AM
From: TFF   of 12617
 
NYSE PRO BREAKS RANKS TO TESTIFY ON FRONT-RUNNING ORDERS

By RODDY BOYD


June 22, 2006 -- The New York Stock Exchange's fortress of silence was breached yesterday when a Big Board clerk described long-running illegal trading by the most respected names at the corner of Wall and Broad streets.
Assistant U.S. Attorney Lauren Goldberg woke up Courtroom 23-A in the Moynihan Courthouse when Van Der Moolen specialist Joseph Virga took the stand and dropped the dime on his former colleagues, Michael Stern and Michael Hayward.

"The specialists told me to execute improper trades," the 32-year-old Virga testified.

Appearing nervous at the start, Virga soon settled down, calmly describing how he lied to NYSE investigators who questioned him in April 2003 about suspect trades.

"I was scared of the whole situation," he said.

Virga then testified that he decided in June to come clean and tell the truth to the Big Board about the front-running scheme. That was also the month that Virga said he signed his nonprosecution agreement with the feds.

Virga's testimony will likely prove daunting for the Stern and Hayward defense teams.

The clerk - describing how he stood "between six inches and one foot from them all day" - was methodically walked through an example of the front-running by Goldberg.

Covering an eight-second stretch of trading in Duke Energy stock on Oct. 28, 2002, Virga testified how Stern ignored his duty to match existing buyers and sellers to grab a quick nickel-per-share profit on 2,500 shares.
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