Gerard T. Hayes, Robert A. Johnson, Scott G. Hunt, Frank A. Delaney IV and Thomas J. Murphy Jr., former NYSE trading specialists accused of making illegal trades, have had their cases dropped by U.S. attorney Michael J. Garcia. An appearance on LX.TV is rumored to be in the works.
Cases Dropped Against 5 Traders [NY Times]
NYSE
There’s a kind of unreality to all this, since former NYSE boss Dick Grasso is appealing the ruling ordering him to pay back millions to the NYSE. But we cannot help but imagine that the lawyers from the attorney general’s office were smiling as they told Grasso that he could take his sweet time selling everything he owns to pay the bill.
New York Attorney General Eliot Spitzer is willing to give Dick Grasso plenty of time to sell assets to come up with the cash to pay back the disputed multimillion-dollar paycheck that got him ousted from the helm of the New York Stock Exchange.
But Spitzer doesn’t want to wait to firm up what the total payout will be, Avi Schick, a deputy for the attorney general, said at a hearing in state court in Manhattan yesterday.
Schick said he understands it may take a while for Grasso to sell assets, which include several homes and more than a dozen cars, to help round up the $112 million the attorney general tallied the former Big Board head must return to the exchange.
No Rush {New York Post]
- Posted in:
Banks
20 Years Of Failing To Report Short Positions Gets Morgan Stanley A $500K Fine
By John CarneyNot even sure if this counts as a slap on the wrist. It’s more like a little kiss on the palm.
The New York Stock Exchange on Wednesday said it fined Morgan Stanley (MS.N: Quote, Profile, Research) $500,000 and censured the firm for failing to report short interest positions in hundreds of securities for as long as 20 years.
Morgan Stanley failed to report to the NYSE positions in preferred securities and affiliates’ equity securities for an unknown but “significant” number of years, and other equity securities since 2004, the regulator said.
The firm also failed to report similar positions to the American Stock Exchange, and since 1986 failed to report some positions in equity securities to the NASD, the NYSE said.
In addition, Morgan Stanley failed to adequately supervise its process for reporting short positions, the NYSE said.
NYSE fines Morgan Stanley $500,000 [Reuters]
If you’ve read the transcripts or seen even a day of testimony of the government’s prosecution of an exchange floor trader, you know how complex these trials can be. Much of what goes on is an attempt to educate the jury about the habits and dialect of specialists, and some of it is so obscure that at least one judge announced that he had lost his way amidst the jargon.
So it was a bit surprising when the jury in the trial of Bank of America specialist Dave Finnerty came back with a verdict after just one day. Similar trials have seen juries spend days deliberating the charges. The guilty verdict in Finnerty’s trial came back so quickly that even the judge overseeing the case voiced concern.
Quick verdicts can cut both ways. They can mean that the defendant was really, really obviously guilty. Or they can mean the jury didn’t understand the charges or consider all the evidence. Now it’s up to an appeals court to decide which way this one went.
Trader Floored [New York Post]
Both Eliot Spitzer and Dick Grasso are saying they won’t settle the case after yesterdays summary judgment opinion came down from State Supreme Court judge Charles Ramos. Charlie Gasparino reported this morning on CNBC that he’d spoken with Grasso, who told him that this was looking like a heavyweight title fight—a champion will be declared. We prefer the Terrordome analogy: two men enter, one man leaves. Meanwhile, Jim Cramer told CNBC that Spitzer has also ruled out a settlement. This thing isn’t going away, and its only going to get messier from here. We can’t wait.
Eliot Spitzer won the first substantive round in the New York Attorney General’s lawsuit against former NYSE head Richard Grasso today. State Supreme Court Justice Charles Ramos ruled that Grasso must return part of $58 million in “deferred compensation” he received as part of his controversial $198 million compensation package from the then exchange.
Ramos also shot down Grasso’s claims for damages against the exchange and a defamation claim against the current NYSE chairman.
Of course, all of this is at the summary judgment stage, and open to appeal at some point. And you know Grasso’s not exactly opposed to appealing Ramos’ judgments. He’s already got three in front of the state appeals court.
(And, by the way, in New York the “State Supreme Court” is actually the lower court. It makes them lower court judges feel better if they get to call themselves Supreme.)
The opinion hasn’t yet been published but we probably won’t read it even when it is. Unless, you know, there are some juicy, mean or funny bits.
Grasso Must Return Part of $190 Million Pay Package, Judge Says [Bloomberg]
Credit Suisse is fielding nine less souls on the floor on the New York Stock Exchange, Bloomberg reports this morning. Seven staffers have been let go and two moved elsewhere within the bank as more trades are made electronically.
Of course, it’s not just Credit Suisse traders who are being made redundant by the recent push into electronic trading. They’re just the ones talking to Bloomberg reporters. In the interest of getting a fuller picture of how electronic trading is changing the NYSE, we’d like to hear more about this. Who else has recently cut or is planning on cutting its staff on the floor of the Big Board? Send your thoughts to tips (at) dealbreaker (dot) com.
Credit Suisse Cuts NYSE Staff by Almost a Third, People Say [Bloomberg]
- Use the Bloomberg command
NH BLG_DEALBREAKER <GO>
to access Dealbreaker
