The Securities and Exchange Commission and the Office of the Comptroller of the Currency have each fined a former senior portfolio manager at First National Bank of Chicago $15,000 for overstating the price of government-backed securities derivatives.
Michael P. Traba, who in 1994 managed two proprietary money market funds, sold the derivatives at inflated prices to trust accounts he controlled, said Jane Jarcho, an assistant regional director at the SEC. If he had sold them at a fair price, the funds' net asset value - that is, the price of one share -- would have fallen below $1.
Money market funds traditionally trade at $1 a share, and the case involving Mr. Traba was one of several in the mid-1990s in which bank-managed money market funds came close to "breaking the buck." Some banking companies were forced to pony up money to cover losses.
Mr. Traba, who neither admitted nor denied liability, has been barred from working for a broker, dealer, investment company, or insured depository institution. He left the subsidiary of First Chicago Corp. in 1994; the company has since been acquired by Bank One Corp. Mr. Traba's lawyer did not return a phone call.
First Chicago, which also did not admit liability, previously paid $30,000 to settle charges by the OCC that it had failed to supervise Mr. Traba. -- Cheryl Winokur