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Strategies & Market Trends : The Epic American Credit and Bond Bubble Laboratory -- Ignore unavailable to you. Want to Upgrade?

To: Paul Kern who wrote (60047)	5/1/2006 5:14:25 PM
From: shades	Respond to of 110194

Judge Denies Motion To Dismiss Charges In Specialist Case (philster says they are all crooks - Grace says philster is nutz) By Chad Bray Of DOW JONES NEWSWIRES NEW YORK (Dow Jones)--A federal judge on Monday denied a motion to dismiss the majority of allegations against seven former specialists at Van der Moolen Specialists USA in connection with improper trading at the New York Stock Exchange. In an order issued Monday, U.S. District Judge Sidney H. Stein said he found that the government's indictment sufficiently alleges a scheme to defraud and a course of business that operates as a fraud by the former specialists. "By allegedly taking positions as specialists who are required by NYSE rules to match customer orders whenever possible and instead trading for their own accounts to profit at the expense of existing public orders, defendants can properly be found to have tended to deprive their public customers through fraud or stealth," the judge said. The case against the former Van der Moolen specialists is set to go to trial later this month and is the first of several criminal prosecutions related to NYSE specialists allegedly trading ahead of clients for their own accounts. Van der Moolen Specialists USA is a unit of Van der Moolen Holding NV (VDM). However, Judge Stein did agree with arguments by the former specialists that the government failed to demonstrate they violated federal securities laws regarding alleged untrue statements or omissions of material facts. "Neither the indictment nor the governments' response to defendants' motion for a bill of particulars identifies any statements whatsoever made by defendants, let alone any that were rendered misleading by virtue of defendants' omissions," the judge said. The government had argued that the defendants, by virtue of their position as specialists, owed a fiduciary duty of "best execution" to their customers and were required to disclose that they were improperly trading stocks to and from their own accounts ahead of executable public orders, the judge said. In 2005, federal prosecutors filed criminal charges against 15 former floor specialists at five of the Big Board's seven specialist firms, alleging they engaged in fraudulent and improper trading from about 1999 to April 2003. The government said the specialists systematically violated NYSE rules by trading ahead of investor orders and by "interpositioning" trades for their firms' accounts between open investor orders. -Chad Bray; Dow Jones Newswires; 212-227-2017; chad.bray@dowjones.com (END) Dow Jones Newswires May 01, 2006 17:09 ET (21:09 GMT) Copyright (c) 2006 Dow Jones & Company, Inc.- - 05 09 PM EDT 05-01-06