Fired trader demands Kidder release funds

May 06, 1994|By New York Times News Service

Joseph Jett, the dismissed Kidder, Peabody & Co. managing director, asserted his innocence in court filings yesterday and demanded that the firm release nearly $5 million frozen in his accounts.

Kidder has refused to release the money since accusing Mr. Jett last month of creating $350 million in phantom trades to conceal trading losses and to inflate his 1993 bonus of $9 million.

"Mr. Jett vehemently denies any wrongdoing," his lawyers said in papers filed with the New York Supreme Court and the National Association of Securities Dealers.

Kenneth E. Warner, Jett's lead lawyer, said that Kidder had acted "lawlessly" in seizing his client's personal account, which contains $4.8 million, and refusing to release $130,000 from a second account.

The filings were Mr. Jett's first public assertion of innocence since he was stripped of his job as a managing director and chief of Kidder's government trading desk.

The allegation that Mr. Jett manufactured profits for two years has rocked Kidder and brought investigators from the Securities and Exchange Commission and the U.S. attorney's office in Manhattan to the firm's headquarters.

Although yesterday's court filing does not detail Mr. Jett's defense against the accusations by Kidder, the outline of his strategy is surfacing. Lawyers familiar with the case suggested that Mr. Jett would claim that his trading activities were known to his supervisors at Kidder and that they did not object to the practices.

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