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NYSE Broker Pleads Guilty to Illegal Trading

Securities: The felony charge carries a maximum 10-year prison term and fines of up to $1 million.


NEW YORK — A New York Stock Exchange floor broker pleaded guilty Tuesday in connection with an alleged scheme that netted more than $11.1 million in illicit trading gains over five years, authorities said.

In a scandal that rocked the Big Board in February, Robert Carucci, 36, of Staten Island, and seven other NYSE floor brokers were charged with exploiting their insider positions to secretly make illegal trades for their own profit.

The charges were explosive because they struck at the integrity of the nation's oldest and most prestigious securities market.

Floor brokers, whose job is to execute trades on behalf of securities firms, are generally barred by federal law from trading for their own profit. The rationale is that by being on the floor and aware of large block trades and other transactions that affect stock prices, they possess an unfair advantage over other investors.

NYSE Chairman Richard Grasso said at the time of the February charges that he did not believe such illegal trading was pervasive but that the exchange was contemplating changes to combat future abuses.

Carucci pleaded guilty in U.S. District Court in Manhattan to one felony count of illegal trading. He faces a maximum 10-year prison term and fines of up to $1 million, according to U.S. Atty. Mary Jo White.

Five of the other brokers were named in an indictment Monday that essentially repeated the illegal-trading charges brought in February. Carucci's lawyer, Nicholas Gravante Jr., said in a statement Tuesday that Carucci "recognizes he made a serious mistake in judgment. He has fully accepted responsibility and wishes to put this unfortunate situation behind him as quickly as possible."

Gravante said Carucci entered into a plea agreement with the prosecutors but is not cooperating in their continuing investigation.

Christine Beyer, another of the brokers originally charged in February, was named last week in a criminal information, meaning that she, like Carucci, had waived her right to a grand jury indictment, according to a spokesman for White.

There was no indication whether Beyer was contemplating a guilty plea. Neither she nor her attorney could be reached for comment Tuesday evening.

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