Knight Announces Agreement in Principle With Staffs of SEC and NASD
07 Julho 2004 - 8:00AM
PR Newswire (US)
Knight Announces Agreement in Principle With Staffs of SEC and NASD
JERSEY CITY, N.J., July 7 /PRNewswire-FirstCall/ -- Knight Trading
Group, Inc. (NASDAQ:NITE) today announced that its wholly owned
subsidiary, Knight Securities, L.P. (KSLP) had reached an agreement
in principle with the staffs of the U.S. Securities and Exchange
Commission (SEC) and NASD to settle investigations in connection
with specific institutional trade activity, conduct and supervision
that occurred in 1999 through 2001; and books and records, document
production and record-keeping deficiencies. The agreement in
principle is subject to the drafting of settlement papers and final
approval by the SEC and NASD. The agreement in principle involves
Knight Securities, L.P., an over-the-counter trading subsidiary
renamed Knight Equity Markets, L.P., effective September 1, 2003.
Knight Equity Markets, L.P. is a subsidiary of Knight Trading
Group, Inc. (Knight). Under the terms of the agreement in
principle, KSLP would disgorge approximately $41 million in
institutional trading profits, and pay $13 million in interest and
$25 million in penalties. The SEC and NASD would then determine how
the funds would be distributed. KSLP expects the proposed
settlement to take the form of an administrative order, in which
KSLP would neither admit nor deny the findings. Knight will take a
pre-tax charge of approximately $79 million in the second quarter,
which ended June 30, 2004, relating to the agreement in principle.
"Knight understands that we have a responsibility to our clients to
provide superior trade execution services and to serve as a trusted
business partner who values the importance of client
relationships," said Thomas M. Joyce, Chief Executive Officer and
President of Knight Trading Group. "The agreement in principle
announced today demonstrates the management team of Knight that
arrived after May 2002, together with our employees, is committed
to resolving the regulatory inquiries we inherited. We believe that
the agreement in principle is an important next step in closing the
chapter on these issues. We will continue to pursue our
client-focused strategies to build Knight's business platform and
future prospects." The findings concerning KSLP will include
violations of the antifraud provisions of Section 15(c)(1) of the
Securities Exchange Act of 1934 (Exchange Act) and associated
rules. The findings will also include violations of the SEC books
and records rules (Rules 17a-3 and 17a-4 under the Exchange Act) in
connection with the retention of e-mails and order tickets and the
use of trade modifiers; violations of NASD rules concerning the
production of books and records (NASD Rule 8210); failures to
supervise under Exchange Act Section 15(b)(4)(E) and NASD Rule
3010; and violations of NASD rules (including just and equitable
principles of trade (NASD Rule 2110)) in connection with the use of
trade modifiers and the filing of NASD Form U5 notices for certain
former employees. KSLP would neither admit nor deny the findings.
The agreement in principle is subject to the drafting of settlement
papers and final approval by the SEC and NASD. The proposed
settlement would resolve the matters for which Knight Securities,
L.P. received Wells Notices from the staffs of the Division of
Enforcement of the SEC and from NASD's Department of Market
Regulation. Knight previously announced the receipt of the Wells
Notices on March 4, 2004. The agreement in principle does not
address the Wells Notices received by four former employees of
KSLP. The agreement in principle also does not address the private
arbitration claim against KSLP made by a former KSLP employee
relating to his employment and termination, as Knight originally
disclosed in its Form 10-Q for the quarter ending June 30, 2002,
and as updated in subsequent securities filings. Knight continues
to defend against the private arbitration claim. * * * Knight is
focused on meeting the needs of institutional and broker-dealer
clients by providing comprehensive trade execution services in
equities and derivatives. A leading execution specialist, Knight
offers capital commitment and access to a deep pool of liquidity
across the depth and breadth of the equity market. Knight also
operates an asset management business for institutions and high net
worth individuals. To be a valued partner, Knight strives to
provide superior client service and will continue to tailor its
offering to meet the needs of its clients. More information about
Knight can be obtained at http://www.knighttradinggroup.com/.
Certain statements contained herein constitute "forward-looking
statements" within the meaning of the Private Securities Litigation
Reform Act of 1995. These forward-looking statements are based on
current expectations, estimates and projections about the Company's
industry, management's beliefs and certain assumptions made by
management. Readers are cautioned that any such forward-looking
statements are not guarantees of future performance and are subject
to certain risks, uncertainties and assumptions that are difficult
to predict. Since such statements involve risks and uncertainties,
the actual results and performance of the Company may turn out to
be materially different from the results expressed or implied by
such forward-looking statements. Given these uncertainties, readers
are cautioned not to place undue reliance on such forward-looking
statements. Unless otherwise required by law, the Company also
disclaims any obligation to update its view of any such risks or
uncertainties or to announce publicly the result of any revisions
to the forward-looking statements made herein; however, readers
should carefully review reports or documents the Company files from
time to time with the Securities and Exchange Commission.
DATASOURCE: Knight Trading Group, Inc. CONTACT: Margaret Wyrwas,
Senior Managing Director, Corporate Communications & Investor
Relations of Knight Trading Group, Inc., +1-201-557-6954, Web site:
http://www.knighttradinggroup.com/
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