WASHINGTON -- Rep, Edward Markey has urged the SEC to punish securities firms that retaliate against whistle-blowers following a report that Merrill Lynch & Co. laid off a municipal bond trader who reported.excessive markups of bonds and other abuses to firm officials.
"These reports, if true, raise disturbing questions about the treatment of whistleblowers at securities firms and about the efficacy of broker-dealer internal controls, Supervisory policies and securities industry self-regulation," the Massachusetts Democrat told Securities and Exchange Commission chairman Arthur Levitt in a letter.
Markey. who chairs the House Energy and Commerce Committee's subcommittee on telecommunications and finance. asked Levitt to provide the subcommittee with information about whistle-blower complaints and protections after learning about Merrill's layoff of Raymond C. Quinn, a trader in the firm's Dallas office.
Quinn would not comment on the matter, but his attorney, Jonathan Lagemann, said yesterday that Quinn, who was in charge of selling municipal bonds to retail investors in the Dallas region, was laid off in-late 1993 after he complained about trading abuses.
Quinn, Lagemann said, told Merrill officials that one trader in his office was selling tax-exempt bonds to retail investors at a markup of more than 5% over the market price. Quinn also said he heard that a trader made a political contribution to an elected official and was then reimbursed by being allowed to buy bonds "off his desk" at a discount for $2300 below the firm's cost.
Lagemann Said Quinn was laid off "even though he was the most profitable man in the office," grossing $23 million and netting $1.5 million for the firm from retail trading in Dallas in 1993.
Quinn, who filed a complaint with the National Association of Securities Dealers, is now working at Barre & Co. in Dallas.
Jim Wiggins, a spokesman for Merrill Lynch, said Friday that Quinn's termination had nothing to do with the claims he raised. Wiggins said Quinn was let go as part of a general layoff of seven people and was not replaced. Wiggins said Merrill "encourages whistle blowers" to report abuses through a confidential 800 number.
