Blue Chip Publicity For an (Alleged) Racketeering Enterprise
Manhattan District Attorney Robert Morgenthau today announced the indictment of sixteen people--including the owners--at a defunct brokerage firm called Joseph Stevens & Co., which was also indicted. Morgenthau said that these people ran a racketeering enterprise from 2001 through 2005 that raked in $6.2 million in illegal commissions.
That's small potatoes by Madoff era standards, though the scope was serious enough:
During that period, the defendants defrauded 800 victims in more than 5,000 trades valued at $151,286,804.44. By manipulating the market value of carefully selected stocks, the defendants generated more than $6.2 million in unlawful, undisclosed commissions, in violation of New York law and the trust of their customers.Now, by any chance does the name "Joseph Stevens" sound familiar? It may. For quite a few years, at precisely the time the crimes were allegedly being committed, these alleged racketeers have presented a legitimate front with the aid of the financial media.
Thus we had Donald Selkin, head of equity research at the firm (and not accused of any wrongdoing), chatting it up with CNNfn back in 2004. A quick Google shows a host of financial publications similarly chewing the fat with Selkin as recently as last year (see this and this).
Selkin is now with National Securities, which boasted recently: "Frequently quoted in financial media including Bloomberg, CNN/FN, and CBSMarketwatch websites, Newsday, Quick Nikkei News, and Asia Market News, Mr. Selkin has provided CNBC’s 'Fair Market Report' for the past twenty-six years." What a guy. Earns his keep, to be sure.
Richard Suttmeier, who was chief market strategist at Stevens (and also not accused of nuthin'), was also all over the media.
Hey, these two gents didn't do anything wrong--and neither did the financial media that, unknowingly, buffed up the image of a firm at the same time that it was allegedly ripping off people. Happens all the time, I suspect. No big deal, unless you were one of those 800 victims.
© 2009 Gary Weiss. All rights reserved.