Hall of Shame: NYSE Regulation Releases October Rulings

Cory Levine, Wall Street & Technology

NYSE Regulation today released its monthly roundup of disciplinary actions. Some notable firms made the hit list this month as a result of technology failures, and one can only wonder how these violations got past the firms' various regulatory checks. All totaled six firms and nine individuals were fined. Here are the highlights, or should we say lowlights:- Pioneer Capital was fined $200,000 for multiple NYSE Direct+ orders that were in violation of NYSE rules and policies, failure to conduct due diligence on customer orders, and failure to reasonably supervise and control activity occurring on its SuperDOT connection.

- SunGard Global Execution Services failed to supervise customer orders placed over the firm's electronic access systems. During a period lasting from 2003 to 2005 the firm had 142 improper entries of market-on-close and limit-on-close orders, and five improper cancellations. Also, for a six-month period in 2003, SunGard GES failed to maintain records of orders placed on its electronic systems. For these violations, NYSE doled out a fine of $200,000.

- Among the litany of business-related violations for which NYSE Regulation penalized Direct Brokerage, the firm failed to maintain various records, including e-mail communications in the appropriate format and for the required retention period. Direct Brokerage was fined $150,000

- Bernard Herold & Co. received a $50,000 fine for failure to preserve electronic communications in a non-rewritable, non-erasable format.

- CIBC World Markets was fined $200,000 for failure to supervise and control its stock loan business to ensure that transactions were effected at market prices, and also its electronic communications to ensure review of Bloomberg messages in connection with stock loaning activity.