ROANOKE TIMES Copyright (c) 1996, Roanoke Times DATE: Wednesday, January 10, 1996 TAG: 9601100138 SECTION: BUSINESS PAGE: B-5 EDITION: METRO DATELINE: WASHINGTON SOURCE: Associated Press
Former Kidder Peabody & Co. bond trader Joseph Jett and two of his former supervisors were charged Tuesday, as expected, in a Securities and Exchange Commission civil case arising from Kidder's 1994 bond trading scandal.
Jett, who faces securities fraud and books and records violations, will have a chance to defend himself at a hearing before an SEC administrative law judge by March. The charges arise from Jett's dismissal in April 1994, when Kidder accused him of a plot to concoct $350 million in phony bond profits to inflate his bonus and a scheme to mask $100 million in losses.
The bond trading scandal contributed to Kidder's sale to Paine Webber Group for $670 million.
The SEC intends to seek to bar Jett from the securities industry, and have him surrender ill-gotten gains, said Richard Walker, the SEC's Northeast regional director. In addition, Jett could face civil fines that Walker said could total millions of dollars.
``The potential and the exposure is very large,'' Walker said. The SEC could seek fines of up to $100,000 for each alleged violation, which potentially involves thousands of trades over several years, he added
Jett's former bosses, Edward Cerullo and Melvin Mullin, were charged with failing to supervise the trader.
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