N.Y. options probe begins
New York state Attorney General Robert Abrams has announced that his office has begun an investigation of Michael Starbuck Inc. & Associates. Mr. Starbuck's firm lost between $2 million and $3 million in investor money in the fast-paced options markets.
David Robbins, a lawyer in the securities division of the attorney general's office, says the first step of the investigation was to mail out questionnaires to the 250 investors in Mr. Starbuck's partnership. As the next step he expects to have investor interviews in Schenectady, Albany, and New York.
He suggested that investors contact him at his office at 2 World Trade Center , New York, concerning possible interviews.
In an interview, Mr. Robbins said his prime concern is returning money to the investors. According to the receiver, Steven glusband of the law firm of Sage, Gray, Todd & Sims, securities are left in the partnership which, as of mid-January, had a value of $500,000. Since then, however, he notes, the stock and bond markets have declined considerably. Thus, the securities would have lost value. Also, he said in an interview, there is a debit balance of "under $ 100,000" in the partnership's trading account. He indicated it was closer to $ 70,000 but varies daily.Shortly, he expects to make a decision on how to eliminate this debt, since the partnership is paying the broker loan rate on it. This rate is running about 20 percent.