To: Sir Auric Goldfinger who wrote (8981 ) 7/27/2000 5:25:15 PM From: StockDung Read Replies (1) | Respond to of 10354 NASD's securities watchdog to open Long Island office By Greg Cresci NEW YORK (Reuters) - Boiler rooms beware. Some 50 stock market cops are coming to your front yard. Boiler rooms, or brokerage firms that push speculative and sometimes ficticious investments, thrive on New York's Long Island. That's precisely where the securities industry's self-regulatory body, the National Association of Securities Dealers (NASD), will open its newest office. The move involves transferring about 40 people from the NASD's current district office of 200 in Manhattan to Long Island, a suburb of New York City, where many brokerages are located, Mary Alice Brophy, head of member regulation at the NASD, said. ``There is a concentration of approximately 150 firms located on Long Island, so this lets us be closer to the firms because one of our tasks is getting out and examining them,'' Brophy said. Boiler rooms, sometimes called bucket shops, were the subject of a popular film titled ``Boiler Room'' released earlier this year which told the story of manipulative stock-pushers at a fictitious Long Island firm called J.T. Marlin. The story reflected true events involving now defunct Long Island brokerage Stratton Oakmont, which has come to symbolize stock fraud of the type the NASD will fight at its new office. Stratton Oakmont principals have pleaded guilty to stock fraud. ``I think that the NASD is taking a step in the right direction to develop a regulatory presence in an area where there have been problems,'' said Bradley Skolnick, president of the North American Securities Administrators Association, a Washington, D.C.-based group of state securities regulators. The new NASD office, located in Jericho, N.Y., is due to open in mid-September and will initially employ about 40 people, with ten more to be hired as necessary, Brophy said. The staff includes examiners who will review books and ledgers of brokerage firms in the area, an enforcement lawyer or two, and various others dedicated to keeping the securities business orderly and free from fraud. ``Long Island, unfortunately, has become a fertile breeding ground for boiler room activities over the past decade or so,'' Skolnick said. ``I'm sure there are some reputable firms on Long Island. However, we've seen a disturbing number of boiler room operations originate in that area.'' So are the days of Long Island boiler rooms coming to an end? Probably not, given the allure of quick profits and the number of gullible investors willing to hand their money over to unsavory brokers pursuing them. But the NASD plans to make life more difficult for such hucksters. ``I would say if you're running a boiler room in any part of the country, you ought to be worried because we're getting better and better at dealing with the problems that arise in situations like that,'' Brophy said. 16:49 07-27-00