Week In Review

As was not predicted here, the Federal Open Market Committee raised interest rates by a quarter-point, but with a neutral bias. That third shoe dropping sent the Dow Jones Industrial Average on a rocket-assisted climb back to where it was, once again playing tag with the 11,000 level, and kicked the Nasdaq composite, after some computer trouble, past 3300.

Meanwhile, Dallas Fed President Robert McTeer said the Fed’s new policy of revealing which way it’s leaning has worked only to make the market nervous and it may be dropped. Mr. McTeer voted against the June and August rate hikes as well as this one.

Three in one

Charles Schwab Corp., Ameritrade Holding Corp. and TD Waterhouse Group Inc. — which together hold more than half the nation’s online client assets — laid down the virtual epees and web-based butcher knives long enough to hold hands and form a tripartite online investment bank to wade into the boom in technology stock offerings.

Scott Ryles, 40, who quit as head of technology investment banking at Merrill Lynch & Co. Inc. a couple of weeks ago, will honcho the new IPO outfit from San Francisco. Theoretically, online clients will be able to get in on the ground floor of new public offerings brought to market by the trinity.

As Waterhouse wunderkind (quarter-over-quarter profits up 45%) president Frank Petrilli said, “In our space you compete like crazy and sometimes you cooperate like crazy.” Crazy, man.

Optional deal

Mighty market maker Knight/ Trimark Group Inc. is paying $460 million in stock (no options) for options middleman Arbitrade Holdings of Minnetonka, Minn. That will put the Jersey City, N.J., company square into the sizzling options business both here and in Britain.

Prudent probe

Remember that $2.5 billion settlement Prudential Insurance Co. of America agreed to pay 650,000 policyholders a couple of years ago? Of the thousands of employees processing the claims from cheated clients of the nation’s largest insurer, only 44, all of whom work at the Plymouth, Minn., center, say Pru bosses ordered them not to give anyone the top-compensation score. A company spokesman says the charges are groundless; a federal judge has ordered an inquiry.

Yields to burn

BT Alex. Brown, now part of Deutsche Bank AG, has agreed to pay $15.3 million, without denying or admitting anything, in a Securities and Exchange Commission investigation into yield burning, a form of overcharging and tax evasion, in the municipal bond market. The company, now out of the muni business, also consented to a finding that predecessor Alex. Brown & Sons of Baltimore had defrauded the Commonwealth of Pennsylvania in a 1994 bond sale. The fine is the biggest yet assessed in a continuing muni investigation.

Rubin, Rubin

A coalition of consumer groups, including one-man group Ralph Nader, has written the Office of Government Ethics to ask for an investigation into Robert Rubin’s accepting a top job with Citigroup only four months after he quit as Treasury secretary. Mr. Rubin said the job had nothing to do with his government work.

Etc.: Job open

Jacob Frenkel, head of the Bank of Israel since 1991, is resigning with the new year. His high interest rates are credited with lowering Israeli inflation…Malaysia is being restored to the community of nations, or at least the Dow Jones Indexes, as of Nov. 22…It’s costing every American the equivalent of a dollar a day this year to fix Y2K computer problems — a total of $100 billion — but it’s worth it, says Commerce Secretary William Daley, because everything will be hunky-dory.