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American Morning
Minding Your Business: Handcuffs on Wall Street
Aired November 19, 2003 - 07:54 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
JACK CAFFERTY, CNN ANCHOR: It doesn't do an investor's heart good when the top business story on a Tuesday morning is pictures of guys on Wall Street being led out of buildings in handcuffs. Andy Serwer is here with that.
ANDY SERWER, "FORTUNE" MAGAZINE: Yes, that's right, Jack. First it was mutual fund managers, Wall Street analysts, corporate executives -- now foreign exchange traders. We've got some really dramatic footage here.
It's pretty interesting, like Jack was saying, sweeping and dramatic raids yesterday, 48 people arrested. These are people who are trading currencies for wealthy individuals in companies on Wall Street. This happened in midtown, this happened in downtown Manhattan, also out in Connecticut.
"The Wall Street Journal" is reporting that J.P. Morgan and UBS are involved. They describe FBI agents pouring into offices and saying, drop the phones and put your hands up.
What happened here, Jack? Basically bogus trades, people trying to enrich themselves or enrich their clients for kickbacks, or enrich their investment banks and ripping off customers. It's all three. There is going to be a press conference at 11:00 a.m. U.S. attorney, James Comie (ph), will be outlining the charges.
CAFFERTY: You know, it's interesting, we have all these agencies that are charged with regulating the securities industries, the investment firms, et cetera, but it seems that law enforcement is the one that finally puts an end to a lot of this stuff. You wonder where the supervision is before it gets to this point.
SERWER: I think that's a very good point.
CAFFERTY: Yes. What about the markets today? We've had a lot of declines.
SERWER: Yes, four straight down, seven out of eight days down. Also, yesterday, the dollar was the culprit. You can see that, 86 on the Dow, about a percentage point and a half on the Nasdaq. Futures are mixed this had morning.
And one thing that is benefiting from all of this worry, of course, is the gold market. And, you know, gold has just been on a tear. It was $320 an ounce, topping $400 an ounce just the other day. Great news for gold investors, bad news for the rest of us, because, of course, gold does well in times of uncertainty and in times of fear, Jack. So, while some people are making out on this, the rest of us are not doing well by this barometer.
CAFFERTY: It's also traditionally an inflation indicater, but this time, I don't think that's part of the equation.
SERWER: No, absolutely not. It has nothing to do with inflation, which is pretty much benign in debt at this point. It's all about foreign affairs' worry, and worry about the economy and the dollar.
CAFFERTY: Thanks, Andy.
SERWER: OK.
TO ORDER A VIDEO OF THIS TRANSCRIPT, PLEASE CALL 800-CNN-NEWS OR USE OUR SECURE ONLINE ORDER FORM LOCATED AT www.fdch.com.
Aired November 19, 2003 - 07:54 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
JACK CAFFERTY, CNN ANCHOR: It doesn't do an investor's heart good when the top business story on a Tuesday morning is pictures of guys on Wall Street being led out of buildings in handcuffs. Andy Serwer is here with that.
ANDY SERWER, "FORTUNE" MAGAZINE: Yes, that's right, Jack. First it was mutual fund managers, Wall Street analysts, corporate executives -- now foreign exchange traders. We've got some really dramatic footage here.
It's pretty interesting, like Jack was saying, sweeping and dramatic raids yesterday, 48 people arrested. These are people who are trading currencies for wealthy individuals in companies on Wall Street. This happened in midtown, this happened in downtown Manhattan, also out in Connecticut.
"The Wall Street Journal" is reporting that J.P. Morgan and UBS are involved. They describe FBI agents pouring into offices and saying, drop the phones and put your hands up.
What happened here, Jack? Basically bogus trades, people trying to enrich themselves or enrich their clients for kickbacks, or enrich their investment banks and ripping off customers. It's all three. There is going to be a press conference at 11:00 a.m. U.S. attorney, James Comie (ph), will be outlining the charges.
CAFFERTY: You know, it's interesting, we have all these agencies that are charged with regulating the securities industries, the investment firms, et cetera, but it seems that law enforcement is the one that finally puts an end to a lot of this stuff. You wonder where the supervision is before it gets to this point.
SERWER: I think that's a very good point.
CAFFERTY: Yes. What about the markets today? We've had a lot of declines.
SERWER: Yes, four straight down, seven out of eight days down. Also, yesterday, the dollar was the culprit. You can see that, 86 on the Dow, about a percentage point and a half on the Nasdaq. Futures are mixed this had morning.
And one thing that is benefiting from all of this worry, of course, is the gold market. And, you know, gold has just been on a tear. It was $320 an ounce, topping $400 an ounce just the other day. Great news for gold investors, bad news for the rest of us, because, of course, gold does well in times of uncertainty and in times of fear, Jack. So, while some people are making out on this, the rest of us are not doing well by this barometer.
CAFFERTY: It's also traditionally an inflation indicater, but this time, I don't think that's part of the equation.
SERWER: No, absolutely not. It has nothing to do with inflation, which is pretty much benign in debt at this point. It's all about foreign affairs' worry, and worry about the economy and the dollar.
CAFFERTY: Thanks, Andy.
SERWER: OK.
TO ORDER A VIDEO OF THIS TRANSCRIPT, PLEASE CALL 800-CNN-NEWS OR USE OUR SECURE ONLINE ORDER FORM LOCATED AT www.fdch.com.
