FIRM KNEW BOND TRADER INFLATED PROFITS, SEC TOLD.Byline: Ken Kohn Bloomberg Business News Joseph Jett Joseph Jett was a former government bond trader at Kidder, Peabody & Co., who was responsible for a large trading fraud involving US Treasury bond strips. After the scheme was discovered in 1995, his employer reversed over $300 million in trading profits that Jett had fraudulently , the former bond trader accused of falsely inflating Kidder, Peabody & Co.'s profits by $350 million, told government lawyers that his superiors were always aware of his trading strategy In finance, a trading strategy (see also trading system) is a predefined set of rules to apply. Usually, this refers to a means used to replicate an option in order to give it an arbitrage free value in the sense that the cost of buying some financial assets to give the same . Jett, testifying in a civil case brought by the Securities and Exchange Commission, disputed the agency's allegations that he kept his former bosses in the dark. ``I never concealed anything,'' he said during the administrative hearing administrative hearing n. a hearing before any governmental agency or before an administrative law judge. Such hearings can range from simple arguments to what amounts to a trial. There is no jury, but the agency or the administrative law judge will make a ruling. . The SEC accused Jett, 38, of fraud not only for concealing his trading but also for taking advantage of a faulty computer system to rack up profits, earning him bonuses of $11 million. Regulators want to ban Jett from the securities industry for life and to have him surrender the bonuses. Kidder fired Jett in April 1994 for the alleged scheme. General Electric Co., its parent company, took a $210 million charge against first-quarter earnings that year to reflect the alleged false profits "False Profits" is an episode of , the fifth episode of the third season. Plot Voyager discovers replicator technology on a pre-warp planet, which is very unusual. Chakotay and Paris beam down to the planet to investigate. . The scandal, coupled with unrelated bond losses, led GE to sell most of Kidder to PaineWebber Group Inc. last year. The SEC's current administrative law administrative law, law governing the powers and processes of administrative agencies. The term is sometimes used also of law (i.e., rules, regulations) developed by agencies in the course of their operation. proceedings represent the first prosecution of Jett. Reports by the SEC and Gary Lynch, a former SEC enforcement chief who investigated on GE's behalf, found that Jett exploited Kidder's computers in trading U.S. Treasury U.S. Treasury Created in 1798, the United States Department of the Treasury is the government (Cabinet) department responsible for issuing all Treasury bonds, notes and bills. Some of the government branches operating under the U.S. Treasury umbrella include the IRS, U.S. bonds and securities representing the bonds' principal and interest payments. The computers recognized his trades as profitable even though they weren't real, their reports said. |
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