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To: TJG who wrote (2234)	7/10/1998 12:51:00 AM
From: Mike Boiko	Respond to of 7039

SEC prepares charges against about 100 traders By Nancy Waitz WASHINGTON (Reuters) - The Securities and Exchange Commission is preparing civil charges against about 100 traders and dozens of brokerage houses, alleging they colluded to fix prices on the Nasdaq stock market, sources familiar with the case said Thursday. The civil charges and discussion of a possible settlement stem from the SEC's 1994 investigation of price-fixing that has already seen firms settle with the Justice Department in 1996 and a group of investors in 1997. "The process could take some time as SEC only started calling a couple of weeks ago," said one Wall Street source. The SEC declined to discuss the matter. "I can't comment," SEC Chairman Arthur Levitt told Reuters when asked if the regulatory agency was preparing charges. Settlement talks, if successful, were likely to result in Wall Street paying its first set of fines to settle regulators' allegations of trading violations on the Nasdaq market, the Wall Street Journal said in Thursday editions. Firms that settled the 1997 $910 million class-action lawsuit, a record antitrust settlement in a civil lawsuit, declined to comment on the matter. They included major brokerage houses, Goldman Sachs & Co., PaineWebber, Prudential Securities Inc. and Merrill Lynch & Co. "Collectively it's a big issue for the Street, because you're talking about the possible suspension of 100 traders," another source at a major Wall Street firm said. "It's really detrimental to a trader's career to be suspended, so we'd much rather pay a fine," the source said. A 1994 an academic study tipped regulators to irregularities in the Nasdaq market that were costing investors more money than similar stock trades on other exchanges. SEC and the Justice Department followed the Vanderbilt University study with their own investigation that yielded thousands of hours of taped conversations between Nasdaq traders. In July 1996, the Justice Department settled with 24 major securities firms over charges that they violated antitrust laws by fixing prices on the Nasdaq stock market. Under the Justice settlement, brokerage firms were required to regularly tape and monitor part of their Nasdaq traders' conversations. Then in 1997, 31 firms settled the class-action suit. Vanderbilt University Professor William Christie, who co-authored the original study, said the current investigation was likely to concentrate on late trade reporting and market makers not honoring their posted quotes. "Some high-priced lawyers have been sitting with their headphones on for the last couple of years," he said. Among the firms that the SEC has held settlement discussions with are Merrill Lynch, Morgan Stanley Dean Witter Co., PaineWebber, UBS Securities Inc., a unit of Union Bank of Switzerland, and Charles Schwab & Co.'s Mayer & Schweitzer Inc. unit, the Wall Street Journal reported.