Qdrop
04-12-2005, 08:54 AM
http://www.msnbc.msn.com/id/7474242/
U.S. prosecutors to indict NYSE traders
Report: Feds allege exchange specialists cheated clients
The Associated Press
Updated: 9:03 a.m. ET April 12, 2005
NEW YORK - Several former New York Stock Exchange traders who oversaw stock auctions on the floor are expected to be indicted on charges that they traded to benefit their firms at the expense of their customers, The Wall Street Journal reported Tuesday.
The newspaper, citing unidentified people familiar with the matter, also said the Securities and Exchange Commission is expected to file and settle civil charges against the New York Stock Exchange for allegedly not properly policing floor traders.
The Journal said the settlement will require the NYSE to set aside $20 million over several years to beef up the exchange’s market-surveillance and regulatory programs.
An NYSE spokesman declined comment to the newspaper.
The criminal probe of the NYSE traders by federal prosecutors grew out of a civil case against specialist firms that employ the traders, the Journal said. Their job is to keep trading orderly by handling trades for customers.
Last year, NYSE specialist firms paid a total of $247 million to settle charges that their employees interfered with customer orders so they could trade their firm’s own money, taking advantage of their knowledge of which way the market was moving.
Specialists match buy and sell orders for customers of the stocks they oversee and use their firm’s money to buy shares when nobody else wants to buy and to sell shares from their own inventory when nobody else wants to sell.
The SEC also is expected to file civil securities-fraud charges against more than a dozen former specialists, including onetime employees of four of the Big Board’s five major specialist firms, The Journal said.
U.S. prosecutors to indict NYSE traders
Report: Feds allege exchange specialists cheated clients
The Associated Press
Updated: 9:03 a.m. ET April 12, 2005
NEW YORK - Several former New York Stock Exchange traders who oversaw stock auctions on the floor are expected to be indicted on charges that they traded to benefit their firms at the expense of their customers, The Wall Street Journal reported Tuesday.
The newspaper, citing unidentified people familiar with the matter, also said the Securities and Exchange Commission is expected to file and settle civil charges against the New York Stock Exchange for allegedly not properly policing floor traders.
The Journal said the settlement will require the NYSE to set aside $20 million over several years to beef up the exchange’s market-surveillance and regulatory programs.
An NYSE spokesman declined comment to the newspaper.
The criminal probe of the NYSE traders by federal prosecutors grew out of a civil case against specialist firms that employ the traders, the Journal said. Their job is to keep trading orderly by handling trades for customers.
Last year, NYSE specialist firms paid a total of $247 million to settle charges that their employees interfered with customer orders so they could trade their firm’s own money, taking advantage of their knowledge of which way the market was moving.
Specialists match buy and sell orders for customers of the stocks they oversee and use their firm’s money to buy shares when nobody else wants to buy and to sell shares from their own inventory when nobody else wants to sell.
The SEC also is expected to file civil securities-fraud charges against more than a dozen former specialists, including onetime employees of four of the Big Board’s five major specialist firms, The Journal said.