Broker seeks justice after 5 years in limbo

Downfall: Joseph Jett was fired by Kidder Peabody in 1994 after being accused of booking bogus profits. He is still trying to clear his name.

May 27, 1999|By Bill Atkinson | Bill Atkinson,SUN STAFF

Joseph Jett had everything. He was a rising star on Wall Street at Kidder Peabody & Co., had millions in the bank and drove fast cars.

But over the past five years, Jett has concluded that you have nothing if you don't have your good name.

Restoring it has become his life's mission.

"I have got to get my named cleared," Jett, 41, said in an interview yesterday before an appearance at the central Enoch Pratt Free Library to plug his new book, "Black and White on Wall Street."

In April 1994, Jett, a 36-year old managing partner at Kidder, was fired after being accused of booking $350 million in bogus profits from bond trades, allegedly so that he could get millions of dollars in bonuses.

Jett maintained his innocence, and in 1996, an arbitration panel of the National Association of Securities Dealers rejected $82 million in claims that Kidder had filed against him.

In July, he was cleared of fraud by a Securities and Exchange Commission administrative law judge. The judge said Jett had an "intent to defraud," however, and fined him $8.4 million and barred him from associating with any brokerage firm. Jett is appealing the ruling.

Jett said the experience has taught him a few things about life on Wall Street and, more important, about himself.

On Wall Street, sometimes even friends won't testify on your behalf. "When people align against you, they can be willing to withhold the truth no matter what," Jett said.

Kidder lawyers, using the threat of the loss of huge bonuses, coerced Jett's former co-workers to "change their stories" and back the company against him, Jett said.

"Money would be taken from them as it has been taken from me" had they sided with him, Jett said. "You just learn that the reality of the world is that money comes first."

He said he has learned to face his own "arrogance."

"Whether you are innocent or not, when something huge happens to you, it normally means there is a character flaw in the hero," he said.

While the company was investigating his bond transactions, Jett said, he was relaxing on the golf course trying to bring his score down. "A more prudent, less arrogant man would have been taking steps to protect himself," he said.

He was also in a power struggle with his boss, Edward Cerullo, who Jett claims tried to get him fired, first for allegedly sexually harassing a female co-worker and then for alleged fraud.

"I would have worked at the firm for nothing if I could have gotten that man's job," Jett said. "I wanted him so bad. It was my own outrage at having lived through what Cerullo was subjecting me to."

While writing the book, Jett said, he realized he had had other conflicts during his career, and he wondered whether it was because of his race or his personality.

"I feel that race was not the issue" at Kidder, he said. "This was about power. This was about a group of ambitious men fighting for control of a company."

The SEC has yet to hear Jett's appeal of the administrative judge's order nearly a year ago.

"It is a pocket veto on my life," he said. "They are able to stop me from acting professionally simply by never making decisions."

"They have no justification for the persecution of me," he said. "What they are doing to me is denying justice by simply delaying justice."

After Jett was fired from Kidder, his assets were frozen and he held jobs including furniture hauler, personal trainer and roofer.

Prohibited from managing money for others, Jett bought and sold securities in his own account. After the Wall Street Journal noted in 1995 that he had achieved a double-digit return on his money, Jett's lawyers received several calls from people who wanted him to manage their money.

Because the SEC has not considered his appeal in almost a year, Jett said, he might file a lawsuit against the regulatory agency.

"They have taken five years of my life," Jett said. "I need to say to the Wall Street community: `I never was in jail, and I was found innocent.' "

Pub Date: 5/27/99

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