Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

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

To: StockDung who wrote (92051)	7/29/2005 8:25:32 AM
From: scion	Read Replies (1) \| Respond to of 122087

More grist for the Treasury anti-money laundering mill...

To: StockDung who wrote (92051)	7/29/2005 9:20:31 AM
From: scion	Read Replies (2) \| Respond to of 122087

Former Merrill Compliance Officer Pleads Guilty in Squawk-Box Case By KARA SCANNELL Staff Reporter of THE WALL STREET JOURNAL July 29, 2005; Page C3 NEW YORK -- A former Merrill Lynch & Co. Inc. rules-compliance officer pleaded guilty to persuading a subordinate to withhold information from a grand jury investigating abusive trading based on "squawk-box" information. The plea is the first in an investigation by the U.S. attorney's office in Brooklyn and securities regulators into trading practices through Wall Street's internal communications systems, or squawk boxes, used to disseminate confidential information about client orders. Investigators are looking into whether information about pending large orders was passed to short-term speculators known as day traders, so they could trade ahead of the orders for a quick profit, an illegal practice known as "front-running." They also are investigating whether brokers in return were paid outsize commissions. Benjamin Grimaldi, 46 years old, pleaded guilty in U.S. District Court in Brooklyn to conspiracy to tamper with a witness and is cooperating with authorities. He and his lawyer declined to comment. Mr. Grimaldi worked in Merrill Lynch's Garden City, N.Y., office from 2000 until he was terminated this month. A second former employee, Timothy O'Connell, was charged this year with witness tampering. He resigned in February. At a hearing this month, his lawyer told a judge she was trying to work out a plea deal. Investigators also are examining trading practices at Citigroup Inc.'s Salomon Smith Barney unit and Lehman Brothers Holdings Inc. A spokeswoman for Lehman declined to comment. A Salomon spokeswoman said the firm cooperates fully with any regulatory inquiry and is vigilant about respecting client confidentiality. At least one former Salomon stockbroker, Ralph Casbarro, has been fired in connection with providing squawk-box information, according to records from the National Association of Securities Dealers first reported on by TheStreet.com. He couldn't be located to comment. According to NASD records, he said "management knew and gave blessing." In his plea, Mr. Grimaldi admitted he persuaded a trading assistant to withhold information when questioned by an investigator and in testimony before a federal grand jury. The assistant, identified as Jane Doe, resigned this year. "Merrill Lynch expects all employees to cooperate fully in any investigation," the firm said in a statement. "We also have a strict policy that prohibits the release of proprietary information and will work to make sure that anyone who violates that policy will be held accountable." Write to Kara Scannell at kara.scannell@wsj.com