The New York Stock Exchange (NYSE) fined 15 Wall Street firms a total of $10.4 million for violating rules governing delivery of prospectuses and other information to investors.Citigroup Global Markets was fined $2.25 million for failing to deliver trade confirmation documents in more than a million consumer transactions.
Lehman Brothers and DeutscheBank were each fined $1.25 million, while UBS Securities was fined $800,000, NYSE said.
Other firms that were fined included Bear Stearns & Co.; Credit Suisse Securities (USA) LLC ; Banc of America Securities LLC; Goldman Sachs & Co.; JP Morgan Securities; and Wachovia Capital Markets LLC.
Overall, the NYSE's regulation arm censured and fined 14 member firms and one former member firm for violations including failure to ensure delivery of prospectuses to customers who purchased securities and mutual funds, failure to deliver product descriptions to customers who purchased exchange traded funds, and failure to establish and maintain appropriate procedures of supervision and control with respect to these activities.
The fines ranged from $375,000 to $2.25 million.
"When you are evaluating an investment, access to appropriate disclosure documents, including an accurate description of the risk involved, is extremely important," said Richard G. Ketchum, chief executive officer, NYSE Regulation. "During the time in question, these firms did not have adequate controls in place to carry out their responsibilities to their customers."
Most of the violations occurred from July 1, 2003 to Oct. 31, 2004, though some continued through 2005.
The exchange flagged some firms for failing to set up and maintain supervision and control procedures.
NYSE said numerous firms, such as Keefe, Bruyette & Woods, Inc., couldn't specify when certain violations began occurring because the companies were unable to locate records. Some firms relied upon outside vendors to deliver documents to customers, or instructed issuers' financial printers to send prospectuses to customers. But the exchange underlined that while firms may contract with outside vendors for the provision of securities related services, compliance with the federal securities laws and NYSE rules is the sole responsibility of the firms and may not be assigned or delegated to others.The New York Stock Exchange (NYSE) fined 15 Wall Street firms a total of $10.4 million for violating rules governing delivery of prospectuses and other information to investors... Melanie Rodier has worked as a print and broadcast journalist for over 10 years, covering business and finance, general news, and film trade news. Prior to joining Wall Street & Technology in April 2007, Melanie lived in Paris, where she worked for the International Herald ... View Full Bio