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May 31, 2002

A Lawmaker to Be Feared? Ask Traders

By Gregory Bresiger

Congressman John LaFalce (D-N.Y.), a member of the House Financial Services Committee, who spoke to the STA Congressional Conference, said Congress has been neglecting market structure and he hopes to do something about it.

"Congress has not been attentive to the changes in the marketplace. This neglect can no longer be neglected. It will be a priority if I become the next chairman," LaFalce said.

The New York Democrat is the ranking minority member of the committee. If Democrats retake the House after the Fall elections, which STA members were told is a distinct possibility, he is likely to become chairman.

LaFalce, like some other lawmakers, said he supports a hike in salaries for SEC officials so that their compensation is equivalent to levels at other federal agencies. That provision was enshrined in legislation for Section 31(a) relief.

But several attendees were disturbed by another matter: LaFalce's comments on market structure, which hinted at more governmental intervention.

"I've met with Dick Grasso, and Wick Simmons. I've met with the ECNs and I'll sit on a trading desk soon," he told the crowd of traders. One said that LaFalce, "is acting as though he's already running the committee."

Another pro, Arthur Pacheco of Bear Stearns, took an indirect swipe at LaFalce. Speaking from the floor just after a warmly-received pro-market speech by Rep. Richard Baker (R-LA), the veteran trading activist told him, "You're common sense approach is encouraging and refreshing, having listened to other speakers this morning."