|  | | 2006 News and Press Releases | | |
HEADLINE NEWS:
Senator Has Questions for NASD
Gretchen Morgenson
The New York Times. December 1, 2006
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EXCERPT: Charles E. Grassley, the Iowa Republican and departing chairman of the Senate Finance Committee, has asked NASD, the securities industry’s largest self-regulatory organization, to describe in detail how it identifies and tracks possible insider trading among its members. Mr. Grassley’s staff is investigating the Securities and Exchange Commission’s handling of an insider-trading case involving a prominent hedge fund. The questions being asked of NASD indicate that Congressional scrutiny of the nation’s market regulators is growing. Insider trading appears to be a growing problem for regulators. In August, The New York Times reported that an analysis of the nation’s biggest mergers during the last year found abnormal trading in the securities of 41 percent of the companies in the days and weeks before the deals became public. Those buying shares during these periods of unusual trading generated gains of as much as 40 percent. “This oversight effort is about making sure the watchdogs are getting the job done,” Mr. Grassley said in a statement. “It’s about maintaining public confidence in the system by making sure the average Joe investor is on equal footing with big shots on Wall Street.” Mr. Grassley sent his request to Mary L. Schapiro, the chairwoman and chief executive of NASD, in a letter on Tuesday — the same day that NASD announced that it was merging its oversight operations with those of the New York Stock Exchange. He asked that NASD respond to his questions about its regulatory approach by Dec. 18. The letter from the senator parallels his September request that the Government Accountability Office investigate how the S.E.C. polices the financial markets and pursues insider-trading cases. The G.A.O. agreed last month to conduct a broad review of S.E.C. enforcement practices and those of its office of compliance, inspection and examination, which oversees money managers. The G.A.O. has until June 2007 to issue the report. |
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