PRE-MERGER SALOMON TRADING RAISES QUESTIONS.Byline: Neil Roland Bloomberg News Salomon Inc.'s stock and options prices soared, while trading volume Trading volume The number of shares transacted every day. As there is a seller for every buyer, one can think of the trading volume as half of the number of shares transacted. That is, if A sells 100 shares to B, the volume is 100 shares. rose as much as fivefold fivefold Adjective 1. having five times as many or as much 2. composed of five parts Adverb by five times as many or as much Adj. 1. , in the days before Wednesday's announcement that the brokerage agreed to be acquired by Travelers Group Inc. The unusual trading activity suggests regulators will want to find out if insider-trading laws were broken, analysts said. ``I'm highly confident that the SEC and the exchanges will be looking at this,'' said John Sturc, a former Securities and Exchange Commission attorney who prosecuted Michael Milken Michael Milken As an executive at Drexel Burnham Lambert Inc. during the 1980s, Milken used high-yield junk bonds for financing and corporate takeovers. While his personal wealth was enormous, he spent two years in prison after pleading guilty to charges of securities fraud. and Ivan Boesky Ivan Frederick Boesky (born March 6, 1937, in Detroit) was notable for his prominent role in a Wall Street insider trading scandal that occurred in the United States in the mid-1980s. Boesky was born to a Russian-Jewish family. on securities fraud charges during the 1980s. ``Their surveillance would definitely pick it up.'' Salomon's share price rose 9.8 percent and its options prices tripled in the days before Wednesday's announcement that the brokerage agreed to be acquired by Travelers for about $9 billion in stock, trading data show. Salomon's stock trades on the New York Stock Exchange New York Stock Exchange (NYSE) World's largest marketplace for securities. The exchange began as an informal meeting of 24 men in 1792 on what is now Wall Street in New York City. , and its call options, in which the investor bets that the price of the stock will rise, trade on the Philadelphia Stock Exchange Philadelphia Stock Exchange (PHLX) A securities exchange trading American and European foreign currency options on spot exchange rates. . Spokesmen for the SEC and the New York New York, state, United States New York, Middle Atlantic state of the United States. It is bordered by Vermont, Massachusetts, Connecticut, and the Atlantic Ocean (E), New Jersey and Pennsylvania (S), Lakes Erie and Ontario and the Canadian province of and Philadelphia exchanges declined to say whether they are investigating trading in Salomon's stock. ``Any significant price or volume activity in equities or options in advance of an announcement is the kind of thing our surveillance and the exchanges' surveillance would likely pick up,'' said SEC enforcement director William McLucas. In Salomon's case, the heaviest trading before the announcement came Tuesday, after CNBC CNBC Center for the Neural Basis of Cognition (artificial intelligence) CNBC Consumer News and Business Channel CNBC Congress of National Black Churches, Inc. reported rumors of the pending acquisition announcement. Price and volume already were rising Monday, though. Similar speculation occurred before the April 7 announcement that Bankers Trust New York Corp. would acquire securities firm Alex. Brown Inc. The price and trading volume in Alex. Brown shares began rising as early as April 3. New York-based Salomon's common stock rose to 71-1/2 Tuesday from 65-1/8 Friday. Travelers and Salomon announced their agreement Wednesday morning, creating the second-largest U.S. brokerage and a financial services powerhouse. The price increase followed four days during which Salomon's stock price was generally flat, slipping to 65-1/8 from 65-5/8. The stock closed Thursday at 76-1/8, down -1/8. On Monday, 1.69 million shares changed hands, more than double Friday's 725,000, and on Tuesday trading soared to 3.75 million shares. |
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