Traders Magazine, September 2003
Knight * Knight Trading Group is going to win a pending arbitration and will be cleared of all charges of front running, a source who is a party to the arbitration told Traders Magazine. "The NASD and the SEC are going to clear Knight of all the charges. They are finding nothing," the source said. He also predicted that the arbitration would end late this year or early in 2004. Knight CEO Thomas Joyce, at an analyst meeting earlier this year, would only say that the firm continues "to work with regulators" on front-running charges brought by a former executive. Robert Stellato, the former head of Knight's institutional trading desk, alleged that Knight officials executed orders for their own accounts before filling client orders. He also contended that Knight officials were informed of these illegal practices, which could potentially cost clients trading profits. NASD and SEC officials don't comment on pending arbitrations.
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