Fret not for the financial future of Richard Harriton, who resigned from

Bear Stearns


last year when federal regulators charged him with securities fraud. He's still on the Bear Stearns gravy train as a consultant to the New York investment bank, even though the behavior of the unit he ran essentially cost the firm $38 million in government fines.


Securities and Exchange Commission

has brought fraud charges against Harriton for his role in Bear Stearns' relationship with the

A.R. Baron

brokerage, a firm that was closed by regulators in 1996 and later saw several of its executives indicted by the Manhattan district attorney. Bear Stearns was A.R. Baron's clearing broker.

The SEC is seeking to ban Harriton from the securities industry for some period of time. Harriton's consulting deal with Bear Stearns, however, is evidence of his continued interest in working in the industry, says Judith Starr, the SEC's lead attorney on the case. Harriton is fighting the charges and has maintained his innocence.

Starr says the government plans to raise Harriton's consulting work for Bear Stearns and other securities firms as an issue at the trial, which was originally scheduled to begin next week but was postponed until May.

Harriton's lawyers cited his consulting job as they successfully urged a judge to move some proceedings in his upcoming trial from Washington, D.C., to New York so Harriton could personally attend the trial and continue working for Bear Stearns.

"To attend the hearing, Mr. Harriton will need to schedule as much of his consulting services as possible before and after the hearing in order to maintain his employment," his attorneys argued in SEC documents obtained by


"That's one of the things that will come out in trial," Starr says. "The court will look at whether it is likely that violations may be repeated." She has included Harriton's consulting contract with Bear Stearns on a list of exhibits the SEC plans to introduce during the trial.

Harriton stepped down as the longtime head of Bear's clearing operations in August when the company agreed to a $38 million settlement with the SEC, but he decided to fight charges from the agency against him personally.

At the time, his lawyer, Howard Wilson, issued a statement saying it was best for Harriton to relinquish the title of clearing head after 20 years because of the SEC action against him, and the settlement with Bear Stearns itself.

"Harriton's resignation will allow him to more effectively fight the charges and to demonstrate, as Bear Stearns had already concluded, that he has not done anything improper," Wilson said in that statement.

Wilson could not be reached for comment on Harriton's consulting deal. In the past, Wilson has said he will make any comments he has about Harriton's case during the court proceedings.

A Bear Stearns spokeswoman refused to comment on Harriton's consulting agreement with the company.

The Bear Stearns settlement and the pending case against Harriton both stem from work Bear Stearns did when it cleared trades for the now-defunct "boiler room" brokerage A.R. Baron.

The SEC charged Harriton with assisting Baron's illegal activities and committing securities fraud himself. His lawyers said Harriton intends to be present personally for his trial.

"Mr. Harriton is employed no more than 60 percent of his time in New York as a consultant to Bear Stearns, and the remainder as a consultant to other New York clients," his lawyers wrote to the court.

John Moscow, who led the Baron prosecution for the Manhattan district attorney's office, says only that he hasn't seen Harriton's consultant contract with Bear Stearns.