Experts Say Charges of Trading Drugs for Info are Important
NEW YORK (AP) _ Allegations that cocaine was traded on Wall Street for stocks and information have implications beyond the problems of drug use by brokers and other employees, a financial expert and a prosecutor said Friday.
Federal authorities, in announcing the Thursday’s arrest of 17 Wall Street workers and two people alleged to be drug dealers, said cocaine use in the field was widespread, with purchases made in neighborhood bars and the substance being snorted in bathrooms, stairways and board rooms.
Assistant U.S. Attorney Robert Plotz said the undercover investigation would continue.
″The importance is not the quantity of the drugs but that it is going on during business hours and in the board rooms,″ Plotz said. ″The indications are that this is not an isolated example, that it is a kind of problem that is more general in the industry.″
The 17 defendants - nine of whom worked for the brokerage firm Brooks, Weinger, Robbins & Leeds - were arraigned Thursday on charges of possession and distribution of cocaine and released on bail.
Prosecutors said two others of the 19 arrested were drug dealers.
Wayne D. Robbins, 32, of Lawrence, a senior partner at Brooks, was one of those arrested.
Federal authorities charged that cocaine was used as a method of exchange in business at Brooks, which specializes in ″penny stocks,″ stocks in new companies that trade at low prices.
In one case, prosecutors said, Brooks members sold cocaine for $10,000 in stock to a principal of a company whose stock Brooks was about to offer to the public.
A lawyer for Brooks, Bert Gusrae, said the firm’s principals had ″no knowledge of any widespread drug distribution or drug network inside the firm.″
Others arrested included employees of New York Depository Trust Co., Allied Capital, and Advest Inc., all charged with dealing cocaine.
″The notion that there is some use of controlled substances on Wall Street is not shocking,″ said Michael Feldman, a partner at the large Wall Street brokerage firm of Shea & Gould.
″If the government can establish that one of the currencies that pays for exchange of information is narcotics, that would be an unusual thing.″
Drug use can be found in all aspects of society ″and that the financial industry is not immune to it is hardly surprising,″ said Feldman, the head of Shea & Gould’s criminal litigation section and a former assistant U.S. attorney.