A senior index equity options trader who is under investigation by the Chicago Board Options Exchange for a customer transaction he executed in 2001, has quit Morgan Stanley in New York. The trader, Harry Silver, could not be reached for comment. Melissa Stonberg, spokeswoman at Morgan Stanley in New York, confirmed that Silver recently resigned, declining all further comment. Nancy Condon, spokeswoman at the CBOE, declined comment.
According to a U-4 filing Silver made with the National Association of Securities Dealers on March 17, Silver received a notice from CBOE staff last December noting possible rule violations in connection with a trade he executed on August 2, 2001. The trade under scrutiny involved a call option on the NASDAQ-100 index with a strike of USD44, according to the U-4 filing. Tom Holloman, spokesman at NASD, said brokers are required to report material developments, such as becoming the subject of an investigation, via a U-4 within 30 days. He could not explain why Silver's U-4 arrived after the deadline.
In a notice on December 30, 2002, the CBOE alleged that a price adjustment made on the trade violated rules, as did a submission of order tickets.
