Hard Words from Tom James for After-Hours Traders
WASHINGTON, D.C.—Investors angry about mounting evidence of
mutual fund trading irregularities have nothing on Raymond James
chairman and CEO Tom James. “It’s fraud, plain and
simple,” James says of the after-hours and market-timing trading
practices exposed in investigations by New York attorney general Eliot
Spitzer. “Everyone in my company has known for years that
they’ll be terminated for doing that, immediately.”
The statements, which were accompanied by some table pounding, came at
Raymond James’ annual advisor conference in Washington, D.C.
Though he speaks infrequently with the media, James on the topic of
traders who decline to play by established rules is outspoken and
clear: “These people should be thrown in jail, immediately, for a
long time.”
Other Raymond James executives addressed the practical implications of
the mutual fund scandals. The firm’s president and COO, Chet
Helck, says many of the practices coming under scrutiny are hard to
avoid. “At a certain level, you find out about these things after
they happen,” Helck said. “We tell our reps to avoid
certain funds, but we can’t always control everything that
happens in those funds.”
James seconded Helck’s statement, particularly as it applies to
market timers. “When the orders come in, it’s almost
impossible to identify them,” he says. “These guys are fast
on their feet.”
Still, James says, he isn’t worried about market-timing becoming
too prevalent. “It’s not a panacea for good results,”
he says. “It’s not really a practical thing
anyway.”
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