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SEC charges settled

Thursday, Nov. 7, 2002 | 11:18 a.m.

MINNEAPOLIS -- U.S. Bancorp agreed Wednesday to pay $100,000 to settle Securities and Exchange Commission charges that it failed to properly supervise a South Dakota broker who inflated the prices of a favored customer's end-of-day trades.

Thomas E. Hall, a former U.S. Bancorp broker who doubled as a Sioux Falls branch manager, sought to help the customer avoid margin calls on his accounts by artificially increasing the value of his portfolio, the SEC alleged.

"We've taken appropriate steps to enhance our policies and procedures to avoid this type of activity in the future," a U.S. Bancorp spokeswoman said.

U.S. Bancorp lacked adequate surveillance reports and had only one supervisor to oversee more than 70 branch managers such as Hall who also were brokers. It now has eight of these managers, the SEC said.

U.S. Bancorp, which had $1.7 billion in earnings last year on $171.4 billion in assets, neither admitted nor denied wrongdoing. It acquired Piper Jaffray Cos. for $730 million in May 1998, and its securities unit is called U.S. Bancorp Piper Jaffray.

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