Wednesday, April 13, 2005

More on Yesterday's Indictments of Fifteen Specialists

Yesterday fifteen specialists were indicted. (here)  The SEC also "instituted administrative and cease-and-desist proceedings against 20 former New York Stock Exchange specialists for fraudulent and other improper trading practices." (here)

Interestingly the alleged improper trades were to enrich their firms. And also of interest is that most are no longer with the firms. Many of the individuals indicted are middle-level career people (they range in ages from 36-57).  The government  will probably try to show profits to these individuals premised on increased bonuses or perks they received from the companies they were employed with.  (see more here and here)

But why so many?  Yes, the question is why are so many facing these charges?  Was this just a way of practice in the industry that the government is finally enforcing? Was the firm pressure to perform so intense that these individuals were forced to engage in this conduct?  If it were 1 or 2 individuals being indicted it is easy to call it rogue employees not following the firm directives.  But when you have so many engaged in this alleged misconduct, one has to wonder the sociological environment surrounding this alleged conduct.


Fraud, Prosecutions, Securities | Permalink

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