NASD Complaint Cites Trades by Peter Kellogg

Peter Kellogg, former proprietor of trading firm Spear Leeds & Kellogg, placed fraudulent trades that created a false appearance of activity in a stock to benefit companies owned by his children, the NASD said.

Kellogg, who sold his firm to Goldman Sachs Group Inc. for $6.5 billion in 2000, was cited for trades of Thoratec Corp., a Pleasanton, Calif.-based medical device maker, in 2001.

The NASD, formerly known as the National Assn. of Securities Dealers, said the trades between companies his family controlled were placed at prices that were unrelated to supply and demand. The NASD said Kellogg conducted “wash sales,” or trades of securities without a real change in ownership.

The allegation comes as Spear Leeds and other New York Stock Exchange floor trading companies try to settle allegations that they fleeced investors by trading ahead of their orders from 2000 to 2002. Kellogg, whose father was an NYSE chairman, has an office at Spear Leeds, although Goldman spokesman Ed Canaday said he no longer had a role in the business.

Kellogg did not return a call for comment.