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Strategies & Market Trends : Anthony @ Equity Investigations, Dear Anthony, -- Ignore unavailable to you. Want to Upgrade?

To: Anthony@Pacific who wrote (56111)	5/12/2000 3:36:00 PM
From: Tassi	Read Replies (1) \| Respond to of 122087

So, Tony habibi WhatZ Up!! is this a yes or NO " Are you short or long" on CEGE SCLN...I did not get any reply ...So spite it out big man

To: Anthony@Pacific who wrote (56111)	5/13/2000 12:01:00 AM
From: Jack Hartmann	Read Replies (1) \| Respond to of 122087

Wall Street Slept as Investors Were Fleeced of Millions Never has anyone put that tongue-in-cheek advice to use more brazenly than did Carnegie Investment Management, which obtained millions of shares in Mattel Inc. by promising to pay more than the market price. It got the shares, but it didn't pay for them. Carnegie did that through a tender offer that seemed to be on the up and up. Word of the tender was distributed by the Depository Trust Corporation, the backbone of the country's share-trading network, which also allowed its facilities to be used to collect the shares from tendering investors. They wound up in an account at PaineWebber. Then the people behind the tender, brothers named Jeffrey and Hubert Leach, borrowed $10 million against the value of the stock they had not paid for. They used the money for what their broker described as "day trading" in technology stocks. But that trading did not go well, and Mattel's stock price also slid. There were margin calls, and PaineWebber sold some of the Mattel stock to cover losses in the account. Carnegie filed for bankruptcy. "What really gets me is that I didn't do anything wrong," says Stuart Scolnik, a 34-year-old Miami man who tendered 22,000 Mattel shares to Carnegie, expecting to receive $346,500. "Nobody gave me even a little bit of a heads-up." He isn't alone. All told, Carnegie took in more than two million Mattel shares, many of them from institutional investors. A few were paid for, but most weren't. Investors are out their shares, with nothing to show for it. They are likely to get far less than they are owed when Carnegie's bankruptcy is wrapped up. The tender offer was made last November, and that is when Carnegie got the shares and began to borrow money on them. It was able to string complaining shareholders along until March 24, when it filed for bankruptcy. None of this could have happened if Wall Street institutions took the slimmest precautions in handling mini-tender offers, so called because they are for less than 5 percent of a company's stock and therefore need not be registered with the Securities and Exchange Commission. Depository Trust charged Carnegie a fee of $2,700 for publicizing its offer to banks and brokerage firms across the country, and PaineWebber allowed tendered shares to be sent to one of its accounts, which it administered because PaineWebber was the clearing broker for First Colonial Securities, the brokerage firm Carnegie used. Nobody admits to any responsibility. The shares were delivered "free and clear" to PaineWebber through Depository Trust, which PaineWebber figured meant there was no reason to think a tender offer was involved. First Colonial's broker on the Carnegie account said Jeffrey Leach told him payment was being made, but did not say how. A lawyer for Mr. Leach declined to comment. At Depository Trust, a spokesman says his firm followed its own rules, which were approved by the S.E.C., and did nothing wrong. He says officials are considering proposing changes in the rules so that Depository Trust would not handle tender offers unless precautions were taken to assure that those who tendered would get paid. That should have been done long ago. Now the Wall Street institutions involved should step up and reimburse the investors who have suffered because precautions were not taken. So far, there are no volunteers. nytimes.com ********** Bizarre. Learn something new everyday. Jack