Customers yawn at fraud charges

There's no need to pay much attention to allegations of fraud inthe futures markets, because the people who matter most, thecustomers, don't seem to care.

Wishful thinking? Perhaps. But Barry J. Lind, president of thefutures discount trading firm Lind-Waldock & Co., says a survey hisfirm recently conducted indicates that the futures scandal has hadlittle effect on public customers of the futures markets.

Only 1 percent of the nearly 1,100 people who responded to theLind-Waldock poll said they have quit trading because of the allegedimproprieties. And 78 percent said they have been "well-served bythe current open-outcry system" of trading.

"There's no question that the survey shows that although openoutcry is not perfect, the public believes in the system," Lind said.

Public investors may believe in the markets, but they don't haveas much confidence in the way the exchanges manage their business. Afull 63 percent of those responding said they do not think theexchanges do a satisfactory job of policing themselves.

Customers may not be satisifed with the exchanges'self-policing, but they don't want the government to play market cop,either. Only 38 percent of those polled called for more governmentregulation.

Despite the generally upbeat response, a residue of ill willcontinues to pervade the markets. Nearly one-third of thoseresponding answered "no" when asked if they believe "the trading pitsat the exchanges generally operate with honesty and efficiency."

Lind thinks the high negative response to that answer may be anaberration. "The way we asked the question brought out a lot of otherconcerns," such as customer dissatisfaction with getting tradeconfirmation quickly when the markets are active, he said.

The survey did not ask customers what they think about dualtrading, the controversial practice that is at the heart of theallegations of wrongdoing by traders who handle customer orders whilealso doing their own business.

"I didn't know whether the public has a real understanding ofwhat dual trading is," Lind said.

Dual trading is on its way out at the Merc, anyway, Lind notes,referring to recommendations of a special Merc panel. "On aphilosophical basis, I believe in dual trading, because I think itbrings liquidity . . . but if you ban dual trading in the most liquidcontracts, I think the loss of liquidity will be slight enough thatmost people won't notice."

NOT ABOARD: Richard Foley will go back to work later this weekas a brakeman for the Southern Pacific RR working out of Tucson,Ariz.

He will not be a member of the Santa Fe Pacific Corp. board ofdirectors. Not by a long shot.

Foley, who owns 131 shares of Santa Fe he obtained through anold Southern Pacific savings plan, garnered only 1 percent of thevote at Tuesday's annual meeting in his quixotic quest to get a seaton the board. And the shareholder rights program he sponsored againat the company's annual meeting did even worse than it did last year.

Just as well. The way Foley ran his campaign for a board seatand for his shareholder proposals was no way to run a railroad.

He didn't even ask the company for a list of shareholders untilApril 3, little more than three weeks before the annual meeting.Because of time constraints, he was able to mail proxy materials toonly about 600 of the company's nearly 100,000 shareholders.

Foley turned out to be the little caboose that couldn't. Hisproposal for secret balloting fetched only 7 percent of the vote,down from 29 percent last year; for cumulative voting, 5 percent,down from 28 percent. A new proposal to elect the entire board forone-year terms each year drew only a 7 percent vote.

"I guess I haven't hit a home run the first time I got up tobat," Foley said, accurately.

At Santa Fe, company managers think Foley has fouled out. "Mr.Foley's whole agenda in life is ego gratification and he gets a kickout of seeing his name in the paper," said Bob Gehrt, a companyspokesman.

FACE EAST: People who attend the panel on "The Influence ofIslamic Law on Commercial Relations with the Arab World" tonightreally will get religion.

On the agenda, the time 7:43 p.m., known as Maghreb, is setaside. Dinner will be served precisely at that time, sunset, becausethe faithful are fasting during the daytime hours during this Islamicholy month of Ramadan.

"Dinner will be served right on the spot, but they'll continuethe discussion after the main course," promised Grazie Fiji,spokewoman for the MidAmerica-Arab Chamber of Commerce, a sponsor ofthe event along with the Chicago Bar Association. Prayer ceremonieswill take place after the panel discussion ceases.