Ex-NYSE Floor Clerk Charged With Fraud
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A former floor clerk at the New York Stock Exchange was charged with alerting a day trader to large purchase or sell orders being made by institutional clients of the clerk’s employer, brokerage firm Lawrence Helfant LLC.
Prosecutors in Brooklyn, N.Y., said Frank Furino, 48, of Port Washington, N.Y., was paid cash bribes for alerting the day trader to the orders and by delaying the execution of those trades to give the day trader time to trade ahead of those orders. The scheme earned more than $300,000 in illicit profits, prosecutors said.
“Furino betrayed his own firm’s clients by stealing valuable, confidential information and selling it to a corrupt stock trader,” government Attorney Roslynn R. Mauskopf said in a statement that described a “front-running” scheme.
Mr. Furino, a Helfant employee from 1997 until he was fired last month, was indicted on charges of conspiracy and securities fraud. He was also sued yesterday by the Securities and Exchange Commission, which said in its complaint that the day trader paid Mr. Furino between $2,500 and $10,000 a month for his tips, most of which were made in 2000 and 2001.
The day trader, who also placed trades with Helfant, wasn’t identified in the criminal indictment or the SEC’s civil complaint. The criminal indictment refers to the day trader as an unindicted co-conspirator.
Peter Driscoll, Mr. Furino’s lawyer at Driscoll & Redlich in New York, didn’t return a call seeking comment.
Helfant was acquired by New York brokerage firm Jefferies Group in 2001. Neither company was accused of wrongdoing. A spokesman for Jefferies, Tom Tarrant, didn’t immediately return a phone call seeking comment.
The stock exchange began an enforcement action yesterday against Mr. Furino for possible violations of stock exchange rules and federal securities laws, according to a statement on the exchange’s Web site.
Mr. Furino faces up to 10 years in prison if convicted of any of the nine securities fraud counts and a maximum of five years in prison if convicted of the single conspiracy count, prosecutors said.
