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To: S.C. Barnard who wrote (531)	7/10/1998 9:07:00 AM
From: JBH	Respond to of 655

Here it is: Thursday July 9 5:30 AM EDT SEC prepares Wall Street charges - WSJ NEW YORK (Reuters) - The Securities and Exchange Commission has told Wall Street securities firms it is preparing civil charges against more than 100 traders and nearly three dozen firms in connection with alleged price manipulation on the Nasdaq Stock Market, the Wall Street Journal reported Thursday. In conjunction with that move, the nearly three dozen Wall Street securities firms have begun preliminary discussions with the SEC as part of an effort to reach an industry-wide settlement over disciplinary cases stemming from trading violations on Nasdaq, people familiar with the situation told the Journal. The SEC's case is an outgrowth of a two-year investigation that the SEC and Justice Department launched in 1994 into Nasdaq dealers. The probe yielded thousands of hours of taped conversations between Nasdaq traders upon which the SEC has built its cases, according to the newspaper. The settlement talks, if successful, are likely to result in Wall Street paying its first set of fines to settle regulators' allegations of trading violations on the Nasdaq market. Among the firms that the SEC has held settlement discussions with are Merrill Lynch & Co., the biggest U.S. brokerage firm; Morgan Stanley Dean Witter & Co.; PaineWebber Inc.; UBS Securities Inc., a unit of Union Bank of Switzerland, and Charles Schwab & Co.'s Mayer & Schweitzer Inc. unit, the paper reported.

To: S.C. Barnard who wrote (531)	7/10/1998 9:11:00 AM
From: JBH	Read Replies (2) \| Respond to of 655

More from WSJ article: Fate of Individual Traders One of the main issues that the SEC and the Wall Street securities firms are tussling over is the fate of the individual traders. The SEC is seeking 30-day, 90-day and, in some cases, lifetime suspensions for individual traders, these people say. But Wall Street firms have been battling such suspensions, rguing that it would be career-killing, these people say. In addition, it appears that Wall Street firms would hold out for the SEC not to name any individual traders as part of an accord with the commission,these people say. The SEC's two-year probe into Nasdaq dealers resulted in the publication of a 157-page supplemental report that shed light on trading practices in the Nasdaq Stock Market. The so-called 21(a) report, chock full of conversations among Nasdaq traders, both to one another and in sworn testimony, offered instances of traders coordinating their price quotations in a bid to fix prices on Nasdaq. In one tape transcript, one trader holding a position in a stock in spring 1994, Parametric Technology, asked another to move up his bid -- what he will pay for it -- to 1/4 point above the selling price. At one point in the conversation between the two traders, the second trader admitted to "goosing [the stock], cuz." To which the first trader replied: "Thank you." In another tape transcript, two traders unwittingly predicted what many traders say is the result of the SEC's investigation and the remedies it is forcing on the National Association of Securities Dealers. "It's the end of your profits," one trader laments to another, explaining that publicity about wide Nasdaq trading spreads forced his firm to narrow them. "If you make 600 a month, you gonna make 400 a month." The talks with the SEC come just two years after two dozen securities firms agreed to random taping of conversations on over-the-counter trading desks and stepped up monitoring of these conversations as part of an accord with the Justice Department.