WASHINGTON - Former Salomon Brothers government bond trader Thomas Murphy has agreed to pay a $300,000 civil fine and stay out of the securities business for two years in a settlement with the Securities and Exchange Commission on charges of rigging bids in three Treasury debt auctions during 1990.
The SEC announced the terms of the settlement of Thursday after it was filed in U.S. District Court for the Southern District f New York. Under the agreement, Murphy neither denied nor admitted guilt, and pledged to cooperate on ongoing federal litigation against former Salomon bond trader Paul Mozer. Murphy was a managing director and head trader at Salomon before he was fired when the company's false bidding activities came to light.
SEC officials charged Murphy with submitting false customer bids of $1 billion each in a five-year Treasury note auction on Aug. 29, 1990, and a four-year note auction on Dec. 27, 1990. He was also charged with a false bid of $1 billion in a two-year note auction on Dec. 26, 1990. In each case, Murphy was said to have made the bids without customer approval.
Under the settlement, Murphy is permanently barred from biding at Treasury debt auctions.
He is also barred from associating with any broker, dealer, underwriter, investment company, or investment adviser for two year. He may then reapply to work in the securities business in a nonsupervisory, nonproprietary job. After five years, Murphy may reapply to work in a proprietary or supervisory position.
