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SEC examines Raymond James
By HELEN HUNTLEY, Times Staff Writer
© St. Petersburg Times The Securities and Exchange Commission is investigating a complaint that Raymond James & Associates Inc. failed to properly follow up on suspicions of insider trading at the company's Dallas office. Dennis Constantino, a former compliance auditor for the St. Petersburg company, told the commission his concerns about heavy trading activity in the stock of Drexler Technology Corp. When visiting Raymond James' Dallas office for an audit last year, Constantino found that Drexler executives had been corresponding by email with Raymond James brokers. "What we feared is that they were doing insider trading," Constantino told WTVT-Ch. 13, which aired a report about the investigation Tuesday. He said he also was concerned that the Dallas brokers might have been manipulating the market for the stock, trying to keep the price of Drexler shares stable when executives were selling. Constantino said he and his auditing partner reported their findings to their bosses but were told to take their concerns out of their report. When the trading continued, Constantino said he felt obligated to contact the SEC. Both he and his partner resigned from the company. Raymond James said Constantino's concerns were referred to the company's legal department, which conducted its own investigation and then hired an outside firm to do an independent investigation. "The counsel turned over the results to the SEC after concluding there were no violations," Raymond James spokesman Larry Silver said. "They expressed confidence to us that the SEC would reach the same conclusion." Silver said Raymond James has not had any customer complaints about trading in Drexler, a California company that makes optical data storage cards, including ID cards used by the Immigration and Naturalization Service, Department of Defense and others. The company is considered a potential beneficiary of the increased emphasis on security since last year's terrorist attacks. It has an "outperform" rating from Raymond James' research department. The stock, which hit a high of $30.30 in April, closed Wednesday at $15.45 per share, down $1.53. -- Helen Huntley can be reached at huntley@sptimes.com or (727) 893-8230.
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From the Times Business report
From the AP
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