NEW YORK – The New York Stock Exchange’s five largest “specialist” firms tentatively agreed to pay a total of about $240 million to settle civil charges that they failed to supervise traders whostepped ahead of customer orders on the Big Board floor, a person familiar with the matter said last night.
The agreement in principle, reached with the Securities and Exchange Commission and the NYSE’s enforcement arm, would represent the stiffest-ever fine involving Big Board specialists, or auctioneers overseeing the buying and selling of shares on the Big Board floor. The deal, which would require final approval of SEC commissioners, still could unravel amid eleventh-hour jockeying by specialists and regulators. – DOW JONES
State is suing Pimco parent
NEWARK, N.J. – The New Jersey attorney general’s office filed suit yesterday against the parent corporation of the Pimco mutual fund group, charging that it defrauded investors by allowing a major client to make improper trades worth more than $4 billion.
The lawsuit, filed in Superior Court in Essex County, alleges that Allianz Dresdner Asset Management of America allowed hedge fund operator Canary Capital Partners LLC and some affiliates to engage in more than 200 such transactions in Pimco funds over an 18-month period from late 2001 through May 2003.
In exchange for the access, Canary made large investments in funds that generated substantial fees and other income for the defendants, the lawsuit alleges. – AP
Fidelity cuts fees
Faced with stiff competition from other online brokers, Fidelity Investments moved yesterday to once again cut fees for online equity trades, eliminating its penny-per-share charge for active traders.
Fidelity, which cut online fees last fall, will now charge a flat $8 rate for online equity trades for customers who make at least 120 trades per year and have combined household assets of $30,000 or have $1 million in total assets with the firm. Fidelity previously charged $8, plus 1 cent per share over 1,000 shares. – STAFF
Production on rise
WASHINGTON – Big-industry production rebounded in January, rising by a strong 0.8 percent, an encouraging sign that the industrial sector’s recovery is on track.
The increase in output at the nation’s factories, mines and utilities came after industrial production was flat in December, the Federal Reserve reported yesterday. – AP
Confidence drops
Investor confidence has declined in February because of concerns about U.S. budget and trade deficits and worries over possibly higher inflation as the economy grows, according to an index compiled by State Street Associates, a unit of State Street Corp.
The survey, which tracks the buying patterns of institutional investors, shows that confidence has been dipping since December 2003, the report said. – STAFF
Bank selects agency
Eastern Bank tapped Wenham ad agency Mullen to handle its advertising. Industry sources estimate billing at about $5 million a year.
Mullen is developing a campaign that will play up the Boston- based bank’s local roots using the tagline “This is our territory.”
That’s no doubt a reaction to consolidation in the local banking industry, including Bank of America’s planned arrival in the region. – STAFF
