Word: drexel
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Dates: during 1980-1989
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...against securities traders, a federal grand jury indicted six men on criminal charges that they evaded taxes through dozens of fraudulent stock deals. The accused -- five top officers of Princeton/Newport, an investment partnership with offices in New Jersey and California, and a former trader for the Wall Street firm Drexel Burnham Lambert -- could face prison terms of up to 20 years each and fines totaling $19 million...
They allegedly used a technique called stock parking, in which an investor sells shares temporarily to someone else to hide their real ownership from Government agencies like the Internal Revenue Service. In this case, Princeton/Newport was allegedly parking stocks at Drexel so that the New Jersey firm could claim short-term tax losses on the sale. The laws against racketeering, which involves repeated crimes carried out by a person or a business, have traditionally been used against the Mafia. Bringing racketeering charges against stock swindlers is an aggressive new tactic in the war on white-collar crime...
...continue to have more applicants than openings," says a spokesman for Drexel Burnham Lambert, Inc. "After the crash, obviously, there was perhaps less of an interest in Wall Street, [but] we haven't really noticed anything...
...House subcommittee is pursuing a separate suspicion -- that Milken and other Drexel Burnham employees may have taken huge profits at the expense of the firm's customers. Congressional documents show that on several occasions partnerships involving Drexel Burnham employees bought up large stakes in the firm's new junk-bond issues, then sold them at a profit. At the same time, some of the firm's clients reportedly found that their access to the issues was sharply limited...
Frederick Joseph, Drexel Burnham's chief executive, testified last week in defense of his firm. He insisted that Drexel Burnham did not give employee partnerships preferential treatment over the firm's clients. The House panel, however, plans to continue its probe...