Stockbrokers

Once high-flying broker Rooney, Pace Inc. agreed Monday to leave the securities industry after an investigation by the Securities and Exchange Commission found numerous violations in three of its public stock offerings. The firm was a major player in the business of IPOs, or initial public offerings, a segment of the brokerage industry that also included First Jersey Securities Inc., which earlier reached a settlement with the SEC over fraud charges dating back to 1984.

Screaming about higher gas prices? Jeff Grossman does it every day. He is one of the dozens of traders in brightly colored jackets who pack the floor of the New York Mercantile Exchange, one of the world's premier hubs for energy trading. The 130-year-old venue is one of the last in Manhattan where people can still shout out orders instead of them silently being processed by computers. That's given traders such as Grossman a rather unique perspective on the rising price of fuel -- especially since prices at the pump typically follow moves on the trading floor by just a few days.

The stock market has been placid for most of the day, but Peter Kenny holds his breath as the final hour of trading approaches. A professional trader at Knight Capital Group Inc. who buys and sells stocks for large investors such as mutual funds, Kenny is betting that prices will drop before trading stops so he can pick up shares at attractive prices.

Screaming about higher gas prices? Jeff Grossman does it every day. He is one of the dozens of traders in brightly colored jackets who pack the floor of the New York Mercantile Exchange, one of the world's premier hubs for energy trading. The 130-year-old venue is one of the last in Manhattan where people can still shout out orders instead of them silently being processed by computers. That's given traders such as Grossman a rather unique perspective on the rising price of fuel -- especially since prices at the pump typically follow moves on the trading floor by just a few days.

A day trader apparently upset over big financial losses opened fire on fellow investors and office workers Thursday afternoon, officials said, killing nine people and wounding 12, then eluded a manhunt for six hours before killing himself. The search for the suspect led police to a second grim discovery: Days ago, they said, the man had killed his wife and two children and left them in his apartment.

A retired stockbroker was sentenced Thursday in U.S. District Court in Los Angeles to two years in prison for defrauding an elderly multimillionaire who for years ignored stock accounts worth up to $16 million. Judge Edward Rafeedie also ordered Willard R. Walls Jr. of Huntington Beach to return $503,000 to the estate of Everett Reiten, who died last year in Wisconsin after spending much of his life in Long Beach.

Ten stockbrokers at a now-defunct securities firm were accused Wednesday in a racketeering indictment of defrauding hundreds of customers out of millions of dollars, authorities said. The brokers, who once worked for LCP Capital Corp. in Manhattan, were paid millions of dollars in cash bribes by stock promoters to pump up the prices of 14 stocks, Manhattan Dist. Atty. Robert Morgenthau said.

Federal securities regulators fined two Orange County stockbrokers for separate violations, barring one of them from the industry and suspending the other for 90 days. Tibor Robert Komoroczy of Laguna Niguel, who was barred, was accused of making trades in customers' accounts without their authorization or consent. The National Assn. of Securities Dealers also fined him $40,000 and required him to pay $168,000 in restitution.

This year, the annual convention of state securities regulators will be in keeping with the austere spirit of the 1990s. When the regulators meet in Orlando, Fla., in two weeks, there will be none of the lavish soirees, free liquor, food and entertainment that were furnished to past conferences by big Wall Street brokerages--the firms that the regulators are charged with regulating. The board of the North American Securities Administrators Assn.

Crude oil's crazy ride this year continued to test new extremes on a shortened trading day Wednesday as the price fell more than 9% to $35.35 a barrel, its lowest close in more than four years. So far, the price of oil has plunged nearly 76% after reaching a record high of $147.27 in July. Commodities traders were responding to more bad economic news Wednesday, analysts said, as government reports showed that unemployment rose and consumer spending fell.

Just after 9 a.m. Wednesday, the glass doors on the trading floor of the New York Stock Exchange burst open, and the symphony begins. "How's Cisco?" a trader shouts. "What are you saying on Goldman?" yells another. "Let's go! Let's go!" Feet shuffle, fans whoosh, televisions blare, cameras click, electronic devices chime like slot machines. No one knows what today will bring.

The Securities and Exchange Commission said Monday that it wouldn't fight a court decision that would place new restrictions on Wall Street brokers overseeing about $300 billion in clients' money. In March, a federal appeals court overturned SEC regulations permitting brokers to offer some fee-based services without adhering to stiffer customer-protection requirements other investment advisors have to follow.

Franklin Resources Inc., manager of the Franklin and Templeton mutual funds, won dismissal of a lawsuit over investors' claims that it engaged in a kickback scheme with securities brokers and charged excessive fees. Franklin made undisclosed payments to brokers to encourage them to push the funds, investors said in a complaint in federal court in Newark, N.J. The investors claimed that Franklin, which oversees $564.

Underscoring the growing clout of hedge funds, federal regulators are seeking to determine whether Wall Street stock brokerages routinely leak sensitive trading information to people running these investment vehicles.

Former Putnam Investments Chief Executive Lawrence Lasser agreed to a $75,000 fine to settle Securities and Exchange Commission allegations that he oversaw improper payments to brokers. Boston-based Putnam compensated brokers, who in return, provided "heightened visibility" in selling Putnam's mutual funds to clients, the SEC said Tuesday. Lasser knew of the arrangements with brokers and failed to adequately disclose them to Putnam's board, the SEC said.

How gloomy are stockbrokers? They're so gloomy, said Hardwick Simmons, head of retail operations for Shearson Lehman Hutton, that "the biggest confidence problem we have is with our own people, not with our investors." Simmons, the new chairman of the Securities Industry Assn., was describing the difficulty of motivating brokers to stay in touch with clients at a time when many of those clients have lost all interest in stocks.

The Securities and Exchange Commission has begun an inquiry into whether several of Wall Street's biggest investment houses are failing to weed out stockbrokers who repeatedly cheat individual investors. Seven brokerage firms confirmed Friday that they have received official letters of inquiry from the SEC, which took the action following a series of stories in The Times earlier this month on abuses in the retail brokerage industry.

Wall Street is getting a new top cop. In a big win for the securities industry, the two organizations that police stockbrokers and others in the industry have agreed to form a single self-regulatory body. The change is expected to cut costs for the financial industry, but some consumer advocates fear it could mean that abuses will go undetected. Under the plan announced Tuesday, regulators at NYSE Group Inc. and the NASD (formerly the National Assn.

Five former New York Stock Exchange specialists won't be prosecuted for making illegal trades, leaving just one case outstanding from the 15 men originally charged in the case. Michael Garcia, the U.S. attorney for New York, said in a statement that after assessing evidence in the five cases awaiting trial, "the government has concluded that the continued prosecutions in these cases are not in the interests of justice."