More from WSJ article:
Fate of Individual Traders
One of the main issues that the SEC and the Wall Street securities firms are
tussling over is the fate of the individual traders. The SEC is seeking 30-day,
90-day and, in some cases, lifetime suspensions for individual traders, these
people say. But Wall Street firms have been battling such suspensions, rguing that
it would be career-killing, these people say. In addition, it appears that Wall
Street firms would hold out for the SEC not
to name any individual traders as part of an accord with the commission,these
people say.
The SEC's two-year probe into Nasdaq dealers resulted in the publication of a
157-page supplemental report that shed light on trading practices in the Nasdaq
Stock Market. The so-called 21(a) report, chock full of conversations among
Nasdaq traders, both to one another and in sworn testimony, offered instances of
traders coordinating their price quotations in a bid to fix prices on Nasdaq.
In one tape transcript, one trader holding a position in a stock in spring 1994,
Parametric Technology, asked another to move up his bid -- what he will pay for
it -- to 1/4 point above the selling price. At one point in the conversation
between the two traders, the second trader admitted to "goosing [the stock],
cuz." To which the first trader replied: "Thank you."
In another tape transcript, two traders unwittingly predicted what many traders
say is the result of the SEC's investigation and the remedies it is forcing on the
National Association of Securities Dealers. "It's the end of your profits," one
trader laments to another, explaining that publicity about wide Nasdaq trading
spreads forced his firm to narrow them. "If you make
600 a month, you gonna make 400 a month."
The talks with the SEC come just two years after two dozen securities firms
agreed to random taping of conversations on over-the-counter trading desks and
stepped up monitoring of these conversations as part of an accord with the
Justice Department. |
