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Pastimes : Whodunit? Two Stockbrokers Murdered in Jersey; No Clues -- Ignore unavailable to you. Want to Upgrade?

To: Janice Shell who wrote (956)	1/9/2000 2:08:00 AM
From: Jeffrey S. Mitchell	Read Replies (1) \| Respond to of 1156

Anyone recognize any familiar names here... ----- Big bust on the NYSE Officials nab 8 traders and a brokerage in alleged trading scam February 25, 1998: 9:01 p.m. ET NEW YORK (CNNfn) - U.S. officials on Wednesday charged eight New York Stock Exchange traders, a Manhattan brokerage and two of its executives in the first bust ever for illegal trading from the floor of the big board. Capping an effort spanning four government agencies, the complaint claims the brokerage, Oakford Corp. of Manhattan, agreed with the traders to buy or sell on accounts open to the brokerage and share with it profits and losses on the accounts. Authorities said the illegal scheme netted profits of $11 million in trades going all the way back to 1993. Floor traders are in the sensitive, and perhaps tempting, position of knowing what trades will be carried out before most investors do. In the Securities Act of 1934, Congress prohibited any such proprietary trading because it could undermine confidence in the markets. "This is believed to be the first time that criminal charges have been brought against national exchange members," said Mary Jo White, U.S. Attorney for the Southern district of New York. The round-up brought together that office with the Securities and Exchange Commission, the Internal Revenue Service, and the Federal Bureau of Investigation. But officials said the alleged falsification of records and violation of trust of the exchange were the most serious infractions. Both civil and criminal charges have been filed. "Out of personal greed, the defendants and the others charged today flagrantly and repeatedly disregarded the interests of their customers and fellow members," White added. For its part, the NYSE suspended the eight brokers and the member firms headed by four of those brokers. The firms are R.M. Carucci Corp., Oakwood Securities Inc., D'Alessio Securities Inc. and Touchdown Securities Inc. "This is a violation of the trust that all members have in each other here," said Richard Grasso, president and chief executive officer of the NYSE. The U.S. Attorney's Office identified the brokers as Christine Beyer, Robert Carucci, Thomas Cavallino, John D'Alessio, Michael Frayler, Edward Lueger, Mark Savarese, and John Savarese. If convicted, they each face a maximum of 25 years in prison, $2.25 million in fines, or twice the amount of the gain or loss from the offenses. Oakford faces fines of $18 million. Oakford owners William Killeen and Thomas Bock, apparently linchpins in the alleged scam, were charged with conspiracy to engage in illegal trading and falsifying the books and records of Oakford and other member firms of the NYSE. Separately, Bock and Killeen were charged in a 17-count indictment for conspiring with two traders, Gerald Petrillo and Richard Solomon, to defraud the IRS. In what it called a "soft dollar kickback scheme", the U.S. Attorney said Boch and Killeen agreed to pay personal expenses to obtain securities brokerage business. And according to the allegations in the IRS-related indictment, the two used the Oakford shell to pay their personal expenses, such as vacations, mortgage payments and four Mercedes-Benz cars. The move is a black eye for the Big Board, which has spent more than $1 billion in the last decade on technology for market trading and surveillance. The stock exchange said it did not catch on to the alleged scheme earlier because the non-member firm generated false customer orders and the NYSE does not examine Nasdaq brokers. In a wily twist, the accounts to which the trades were diverted were opened in the name of a corporation, controlled by Solomon, with pre-existing tax losses. So any profits from the transactions allowed the investors to dodge any federal tax bite - and then divvy up the gains. Mark Marchi, a clerk on the floor of the NYSE, was charged in a separate criminal complaint, with one count of conspiracy to engage in illegal securities transactions and to falsify books and records. fn.com - Jeff