Each day, Benzinga takes a look back at a notable market-related moment that occurred on this date.
What Happened? On this day in 2000, members of all five New York City Mafia crime families were indicted for allegedly participating in a securities fraud scheme.
Where The Market Was: The Dow closed at 10,687.95. The S&P 500 traded at 1,470.54.
What Else Was Going On In The World? In 2000, Hillary Clinton was elected to the U.S. Senate. Tiger Woods became the youngest PGA golfer to win a major. The average cost of a new car was $24,750.
Massive Fraud Bust: On June 14, 2000, the FBI and SEC conducted the largest securities fraud bust in history, indicting 120 people, including Mafia members, securities dealers and even the treasurer of New York City’s police detectives pension fund on charges ranging from racketeering to securities fraud to solicitation to commit murder.
The accusations stemmed from an investigation codenamed Operation Uptick, in which authorities said participants manipulated the trading activity of 19 microcap stocks and defrauded investors out of $50 million.
The list of 120 indictments included 11 alleged members of Mafia families, 57 licensed and unlicensed stockbrokers, 12 stock promoters, 30 officers or company insiders, two accountants, an attorney, an investment advisor and a hedge fund manager.
The plot was a typical pump-and-dump scheme that involved bribing brokers to sell shares of penny stocks to unsuspecting investors, many of whom were senior citizens.
The FBI called brokerage center DMN Capital Investments “fraud central,” and had secretly recorded more than 1,000 hours of incriminating conversations inside its offices.
