Brokers

It was a bad year to be an investor, but a great year to be a broker. Wall Street's five largest investment firms paid record amounts of compensation in 2007, despite the fact that three of the five firms posted quarterly losses as the result of souring investments in sub-prime mortgages. Goldman Sachs Group Inc., Morgan Stanley, Merrill Lynch & Co., Lehman Bros. Holdings Inc. and Bear Stearns Cos. shelled out $65.6 billion in compensation and benefits last year, up about 8% from last year.

Executives at French bank Societe Generale were warned about risky bets being made by rogue trader Jerome Kerviel two months ago, but Kerviel was able to quell suspicions by giving false information, authorities said Monday. Internal bank audits also flagged Kerviel's actions, "but each time he managed to explain them," prosecutor Jean Claude Marin said. Kerviel, he added, thought bank officials didn't probe too deeply because he was pulling in profits for the financial institution.

Insurance lawyer David Grais has been poring over equations in finance books to get up to speed on his new specialty: lawsuits stemming from the sub-prime mortgage debacle. With his traditional insurance practice slowing down, the 55-year-old partner at a small New York firm began segueing into sub-prime in June, after a friend predicted at lunch that it would become the next legal blockbuster. "This whole area is a new dawn" for lawyers, Grais said. First came the sub-prime mortgage boom.

As ailing Wachovia Corp. waits to see whether it will be acquired by Wells Fargo & Co. or Citigroup Inc. -- possibly with taxpayers paying the tab for hundreds of billions of dollars in bad loans -- some of the company's top brokers are preparing to depart Saturday for an all-expenses-paid cruise of the Greek Isles. The weeklong trip for up to 75 employees of brokerage A.G.

A young former Merrill Lynch analyst caught in a sprawling, $7-million insider trading scheme must serve more than three years in prison to show Wall Street that sharing valuable inside secrets will not be met with leniency, a judge said Friday. U.S. District Judge Kenneth M. Karas said he was sending Stanislav Shpigelman, 24, of Brooklyn, N.Y.

As stocks soared in the 1990s, countless Wall Street wannabes became "day traders" -- quitting their jobs and making their living by trading stocks at a furious pace. When the boom ended, so did the day-trading craze. But rising stock prices and new highs in major stock indexes have tickled investor interest, and aggressive trading by individuals is on its way back. "There's no other way to live," said Robert Earl, a 52-year-old Long Beach man who began trading full time in 2004.

An effort to consolidate industry self-regulation of U.S. securities brokers and dealers moved a step closer Sunday, the NASD said. Members of the NASD, formerly known as the National Assn. of Securities Dealers, approved bylaw changes needed to combine with NYSE Group Inc. and form one organization to regulate securities brokers and dealers. Consolidating the self-regulatory functions of the NASD and NYSE Group into one entity will help end duplication, reduce costs and make U.S.

A federal appeals court Friday overturned a rule that allowed securities brokers to avoid some requirements faced by financial planners in advising customers, saying both groups must be held to the same standards to protect investors. The 2-1 ruling by the U.S. Court of Appeals for the District of Columbia Circuit held that the Securities and Exchange Commission had overstepped its authority in adopting the rule in 2005. The Financial Planning Assn.

AT&T Inc. said it had settled with 13 data brokers it accused of fraudulently obtaining customer phone records after the brokers agreed to an undisclosed cash settlement and not to seek customer data in the future. The agreements, the result of lawsuits filed in San Antonio and San Francisco, were all reached within the last month, an AT&T spokesman said. Two other settlements are expected to be entered in the next few days.

A brokerage industry regulator said Tuesday that it had fined two Fidelity Investments broker-dealer units a total of $400,000 for allegedly misleading U.S. military personnel in sales literature promoting two mutual funds. The NASD said the alleged violations took place from January 2003 to January 2006 and concerned Fidelity's Destiny I and II funds.