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Get The Mob Off Wall Street


Editorials

GET THE MOB OFF WALL STREET

Organized crime is infiltrating the small-cap stock market, and neither the National Association of Securities Dealers nor the authorities are taking it as seriously as they should. As many as two dozen small brokerages are involved, people are being threatened and beaten, investors are being cheated, and companies seeking to raise capital are being exploited. A piece of America's capital markets is being corrupted, and unless this is stopped quickly, it's likely to spread (page 92).

So far, Mob activities seem confined to stocks traded in the over-the-counter "bulletin board" and NASDAQ small-cap markets. Issues on the big exchanges appear free of exploitation. Yet criminals have gained control of brokerage firms that make markets in hundreds of stocks. Sometimes they run stocks up, sell them off to unsuspecting investors, and later short the shares. They use intimidation to create artificially wide spreads between bid and ask prices to make profits.

NASDAQ, the Securities & Exchange Commission, and law enforcement agencies appear to be treating Mob infiltration as a minor affair. Corrupting Wall Street threatens the capital markets of America and its economic health. It's time to act.


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