The New York Stock Exchange’s fortress of silence was officially breached yesterday when a Big Board clerk described long-running illegal trading by the most respected names at the corner of Wall and Broad streets.
Assistant U.S. Attorney Lauren Goldberg finally woke up Courtroom 23-A in the Moynihan Courthouse when Van Der Moolen specialist Joseph Virga took the stand and dropped the dime on his former colleagues, Michael Stern and Michael Hayward.
“The specialists told me to execute improper trades,” the 32-year old Virga testified.
Appearing nervous at the start, Virga soon gained his composure, calmly describing how he lied to NYSE investigators who questioned him in April 2003 about suspect trades.
“I was scared of the whole situation,” he told the court.
Virga then testified that he decided in June to come clean and tell the truth to the Big Board about the front-running scheme. That was also the month that Virga said he signed his nonprosecution agreement with the feds.
Virga’s testimony will likely prove daunting for the Stern and Hayward defense teams.
The veteran clerk – describing how he stood “between six inches and one foot from them all day” – was methodically walked through an example of the front-running by Goldberg.
Covering an eight-second stretch of trading in the stock of Duke Energy stock on Oct. 28, 2002, Virga testified how Stern deliberately ignored his duty to match existing buyers and sellers to grab a quick – and entirely risk-free – nickel-pershare profit on 2,500 shares.
As initially reported in The Post last week, Virga admitted that NYSE specialists made use of the socalled “freeze button,” which temporarily halted trading in a heavily traded stock to unfairly position themselves in front of public orders.