NYSE Regulation yesterday announced censures and fines for seven member specialist firms, to the tune $2.8 million total. The fines are the result of multiple trading violations that occurred between 2003 and 2006.
The firms were fined for breaking the firm quote rule, under which NYSE specialists are required to execute orders presented to them at prices that are at least as favorable as the NYSE's published bid or offer. The specialists firms also failed to honor commitments to buy or sell coming from the Intermarket Trading System. Other violations included failure to maintain written supervisory procedures, failure to display eligible limit orders and improperly executed short sales."It is critically important for firms conducting business on the floor of the New York Stock Exchange to honor the publicly displayed price quotes in the course of buying and selling," said Susan Merrill, NYSE Regulation chief of enforcement, in a release. "These commitments are essential elements of the rules that govern trading and are codified in the NYSE Rules and federal securities regulations."
Fines for individual firms were broken down as follows:
Spear, Leeds & Kellogg Specialists LLC $600,000 LaBranche & Co. LLC $600,000 Bear Wagner Specialists LLC $550,000 Banc of America Specialists, Inc. $500,000 Van der Moolen Specialists USA LLC $400,000 Kellogg Specialist Group, LLC $75,000 SIG Specialists, Inc. $75,000 TOTAL: $2,800,000
NYSE notes that the violations occurred prior to the launch of the hybrid market, which the regulator expects will limit future occurrences of similar transgressions. -Cory Levine, Wall Street & Technology