Wall Street Watchdog Takes a Bite

THE SECURITIES AND EXCHANGE COMMISSION FINALly dropped the gavel in the Salomon Brothers trading scandal. In its toughest enforcement action in the case, the SEC filed a civil lawsuit against the two former Salomon executives who allegedly engineered the 1991 scheme to submit phony bids in U.S. Treasury auctions. The government is seeking unspecified fines and court injunctions against former managing directors Paul Mozer and Thomas Murphy. Mozer and Murphy, who both contest the suit, also face possible criminal indictments. But not all of the SEC's actions had as much bite. In a settlement that some observers criticized as toothless, the federal watchdog agency fined three former top managers a combined $225,000 for their failure to provide proper supervision. John Gutfreund, chairman, was fined $100,000 and permanently barred from running a securities firm. Thomas Strauss, president, and John Meriwether, vice chairman, were both fined and suspended from Wall Street activities for three to six months.

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CREDIT: TIME Graphics by Steve Hart

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