FBI Sting Nets 48 Arrests on Wall Street

Yahoo News via Reuters ^ | 11/18/03 | By Hugh Bronstein and Greg Cresci

[Wolfstar]

NEW YORK (Reuters) - Federal Bureau of Investigation agents arrested 48 Wall Street foreign exchange brokers on Tuesday in what appeared to be a sting operation targeting several well-known firms.

FBI officers swarmed on Two World Financial Center late on Tuesday afternoon and led out men in business suits, taking them away in vans and cars. Some of the men covered their heads with overcoats while others bowed their heads to hide from television cameras and photographers.

FBI agents began arresting brokers at the tony office building in downtown Manhattan shortly after 3 p.m. and for about two hours led out handcuffed people dressed in business attire.

"It's currency fraud, securities fraud," said one agent at the scene of the arrests. "It's been a long investigation. The arrests have been ongoing today."

The FBI sources said the Wall Street traders will be charged with swindling retail investors of an undisclosed amount of cash over the past year. One source said those arrested would be charged with money laundering and fraud.

NBC reported the defendants scammed retail investors into thinking they were buying multimillion-dollar foreign exchange trades when it is not possible for those types of investors to participate in such deals.

A Reuters reporter on the 36th floor of Two World Financial Center witnessed FBI agents removing about 10 boxes from one company's office.

A spokesman for the FBI declined comment but said the agency will hold a briefing on Wednesday. A spokesman for the U.S. Attorney and the Treasury Department also declined comment.

Among those arrested were three brokers at the inter-dealer brokerage ICAP (IAP.L), which operates at a different location, according to another source.

The unexpected operation came at a time when America's financial markets have been hit by scandal after scandal. Corporate wrongdoing by companies like Enron, which went bankrupt in 2001, sparked a massive accounting scandal that rocked investor confidence and unearthed irregularities at other companies.

Since then Wall Street equity research companies have been targeted by prosecutors for inflating stocks during the Internet boom of the late 1990s. More recently the mutual fund industry has been investigated on charges of price gouging.

Until Tuesday the foreign exchange market, which boasts top companies, millionaires and banks as their primary clients, has remained untouched by scandal.

The names of other companies involved remained unclear, but sources told Reuters at least four companies were targeted. Sources said none of the companies targeted were household names outside of the securities industry but are well known and regarded in the Wall Street community.

[Blue Screen of Death]

Oh please let this be directly linked to George Soros...

Tubebender... you give us light on dark nights. You give us shelter from cold winds. You find a cold beer when we thought we were out. You are a true believer. Thank you for that lovely thought.

[steveegg]

Interesting financial development ping. I'll leave it to you and the other gurus to decipher this one.

[steveegg]

Oh please let this be directly linked to George Soros...

That boy's going to get what's coming to him sooner or later, and that's coming to sooner.

[Miss Marple]

Hey, Dave! Arrests in foreign currency and exchange! Dare we hope it is Soros?

[Mo1]

Any chance Robert Rubin was one of them arrested?

[Senator Pardek]

Serious question - have you noticed an increased presence of NG/cops on the streets of Manhattan lately?

[WoofDog123]

"NBC reported the defendants scammed retail investors into thinking they were buying multimillion-dollar foreign exchange trades when it is not possible for those types of investors to participate in such deals."

Or maybe they had to be accredited investors to participate and they were not.

[NYC GOP Chick]

Actually, I've been kind of distracted lately and haven't really noticed. Then again, I did notice more than usual at their usual hangout spot on Broadway between Pine & Cedar Streets. But they've been so omnipresent since 9/11 that I don't really notice them anymore.

[Woodman]

I'll come back and take a gander later when I see some names. right now it sounds to me like the guys who play in the Singapore options market yet try to convince their "retail" customers they are really in the spot market. FX is not a securities market and doesn't have the same rules.

Maybe ChiComs? I don't think it would be Soros but you never know.

[michigander]

Or maybe they had to be accredited investors to participate and they were not.

May be?

[StriperSniper]

maybe they had to be accredited investors

Or at the least had the proper risk disclosure paperwork, along the lines of an option agreement. And those have to be cleared also to make sure the type of investment is suitable for the client. Not sure on the details, but along those lines.

[elli1]

I wonder if this is tied into raid on Soros' Moscow hq? The reports have been confusing, but one of the initial ones mentioned boxes of stuff being toted out...

[Afronaut]

I wonder how Ken Lay did on the Par threes today?

[Senator Pardek]

Har - I'm heading down to Astor Place Hair Stylists on Saturday, and I don't wanna get blown up!

Aside from that - they've been playing EBS drills on the radio daily for the last two weeks :(

[oceanview]

none. I was in Times Square Saturday night, the crowds were unreal. I kept thinking, even a "simple" attack right here could kill as many people as the WTC. And its so easy to drive a truck into that area. Forget the police, not that they are doing a bad job, but the idea that a terror attack is going to be thwarted by a police officer on foot patrol is just not going to happen, not from what I see in NYC, its just not practical. we have to get them at the source.

[NYC GOP Chick]

Astor Place Hair Stylists? For real? Isn't that kind of...how shall I put it...metrosexual? ;)

[fight_truth_decay]

Three brokers at the inter-dealer brokerage ICAP were arrested in New York on Tuesday..among the 48.

[Senator Pardek]

Listen sister - that place was cool before the term "metrosexual" ever existed - and a metrosexual would never get his hair cut for under $200 (let alone the $20 I spend there).

See ya at the next NYC Freep!

[NYC GOP Chick]

See ya at the next NYC Freep!

I'll believe *that* when I finally see it, brotha! As for Astor Place Hair, I thought that was more for mohawks and other non-conservative hair stylings...

[oceanview]

and multicolors, don't forget the multicolors. far out man.