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Strategies & Market Trends : VOLTAIRE'S PORCH-MODERATED -- Ignore unavailable to you. Want to Upgrade?

To: Jim Willie CB who wrote (45881)	1/7/2002 3:35:59 PM
From: Sully-	Respond to of 65232

Knight Trading Agrees to Pay $1.5 Million To Settle Allegations of Trading Violations WASHINGTON -- The regulatory arm of the National Association of Securities Dealers has ordered Knight Securities L.P. to pay $1.5 million in fines and restitution for "wide-ranging" trading violations from July 1997 to May 2001. Knight, a unit of Knight Trading Group Inc. in Jersey City, N.J., neither admitted nor denied the NASD's findings as part of the settlement. The company could not immediately be reached for comment. In a news release Monday, NASD Regulation said it found that Knight failed to honor posted quotes, promptly display limit orders and report thousands of trades timely and accurately to the NASD. The agency also determined that the Knight unit had violated rules governing so-called locked and crossed markets. Knight Trading Faces Results of NASD Probe Into Practices "Locking" a market refers to the practice of bidding for stock at its lowest offer price, while "crossing" is bidding to buy stock at prices higher than the lowest offer at the time. Both are against NASD rules and, if widely practiced, can obscure a stock's true price to investors. NASD fined Knight $700,000 for the violations. In addition, Knight was ordered to pay $800,000, plus interest, to clients of online retailer OnSale Inc. as restitution for poor execution quality in 645 orders. NASD called the sanctions against Knight the largest it has ever imposed for these types of marketplace violations. Knight, personified by high-profile Chief Executive Kenneth Pasternak, became a Wall Street emblem of the bull market, and dominated the business of handling volatile tech stocks during the late 1990s. Since then, both its stock price and its profits have tumbled. The case comes at a particularly sensitive time for the company and its founder. Mr. Pasternak last month announced plans to leave the company -- six months before his contract was due to expire in July. Knight's chief operating officer and president, Peter Hajas, will act as interim CEO after Mr. Pasternak leaves at the end of this month while the board searches for a permanent replacement. Between late 1996 and early 2000, Knight was named in 10 NASD regulatory actions, according to filings. Knight has neither admitted nor denied the allegations.