Monthly Disciplinary Actions - February 2006

On appeal, the NYSE Board of Directors reversed the decision of the hearing panel and imposed the penalty agreed to by the parties.

• During the year 2002, the firm permitted deposits for its special reserve bank account for the exclusive benefit of customers to be made by creating an overdraft in an operating account, inaccurately coded non-customer accounts and proprietary accounts of introducing brokers, failed to supervise its five Floor clerks and its qualifying Floor member, did not ensure that its customer trial balance was accurate, failed to maintain formal reconciliations and account balances for some of the firm’s affiliates, did not identify the beneficial owners of certain prime broker accounts, did not ensure that its prime broker accounts maintained the minimum net equity, failed to have procedures to determine whether securities were available prior to effecting short sales in its prime broker accounts or that the firm could borrow the securities for delivery by the settlement date, failed to have policies and procedures that allowed the firm to accurately calculate customers’ day trading margin requirements and submitted inaccurate account type indicators.

The NYSE imposed a penalty of a censure and a $100,000 fine.  The firm consented to the penalty.

• An NYSE hearing panel found that during August and September 2002, the member firm failed to properly allocate certain credits in its proprietary account for introducing brokers, failed to properly calculate its Customer Reserve Formula computations and Net Capital computations, filed an inaccurate FOCUS report, and failed to provide for appropriate supervisory systems and procedures with respect to these activities.   

The NYSE imposed a penalty of a censure and a $60,000 fine.  The firm consented to the penalty.

• An NYSE hearing panel found that during the period from February to July 2002, Punturieri engaged in conduct inconsistent with just and equitable principles of trade in violation of NYSE Rule 476(a)(6) and caused violations of NYSE Rules 78 and 476(a)(8) by engaging in “parking” transactions with a third party that involved no beneficial change in ownership and by engaging in off-market-priced trades.  Punturieri was directed to enter certain trades with a third party into the member firm’s trade data systems in a manner that caused the member firm’s books and records to be inaccurate in violation of NYSE Rule 440 and Rules 17a-3 and 17a-4 under the 1934 Act.

The NYSE imposed a penalty of a censure, a four-month bar, concurrent two-year bar from functioning as a registered securities trader, $10,000 fine and an undertaking to cooperation with the NYSE.  Punturieri consented to the penalty. 

• An NYSE hearing panel found that from February to July 2002, Scheideler engaged in “parking” transactions with a third party that involved no beneficial change in ownership and in off-market-priced trading.   Scheideler also entered certain trades with a third party into the member firm’s trade-data systems in a manner that caused the member firm’s books and records to be inaccurate.

• An NYSE hearing panel found that during the period February to July 2002, George engaged in conduct inconsistent with just and equitable principles of trade in violation of NYSE Rule 476(a)(6) and caused violations of NYSE Rules 78 and 476(a)(8) by engaging in “parking” transactions with a third party that involved no beneficial change in ownership, and by engaging in off-market-priced trades.  George was directed to enter certain trades with a third party into the member firm’s trade data systems in a manner that caused the member firm’s books and records to be inaccurate in violation of NYSE Rule 440 and Rules 17a-3 and 17a-4 under the 1934 Act.
• In addition, George caused a violation of NYSE Rule 345(a) by performing duties customarily performed by a registered representative without first being registered with, qualified by and found acceptable to the NYSE.

The NYSE imposed a penalty of a censure, eighteen-month bar and an undertaking to cooperate with the NYSE. 

• An NYSE hearing panel found that during December 2003, Barningham failed to disclose her prior criminal history on employment application submitted to her member organization employer.
• In addition, Barningham failed to comply with or respond to one or more written requests by the NYSE for information and failed to comply with or respond to a request by the NYSE to provide testimony concerning one or more matters that occurred prior to the termination of her status as a non-registered employee of a member organization. 

The NYSE imposed a penalty on Barningham of a censure and a three-year bar.

• An NYSE hearing panel found that, during April 2004, in connection with his employment with a member firm organization, Lefauve failed to disclose a prior criminal conviction on an employment application that he submitted.
• In addition, Lefauve failed to timely comply with NYSE requests that he submit a written explanation regarding why he failed to disclose his prior criminal conviction on his employment application.

The NYSE imposed a penalty on Lefauve of a censure and a one year and nine months bar.  Lefauve consented to the penalty.

• An NYSE hearing panel found that Stocker failed to comply with or respond to NYSE requests for information and testimony regarding certain matters which occurred prior to the termination of his employment with a member organization.

The NYSE imposed a penalty on Stocker of a censure and a bar until he complies with the NYSE's request, the bar to become permanent if he does not comply within three months.

• An NYSE hearing panel found that in June 2004, Rosenkranz failed to disclose on an employment application submitted to her member firm employer, one or more prior criminal matters, including a criminal conviction that rendered her subject to a statutory disqualification.

The NYSE imposed a penalty of a censure and a twelve-month bar.  Rosenkranz consented to the penalty.

• An NYSE hearing panel found that Fleischman failed to comply with a NYSE request to appear and testify regarding certain matters which occurred prior to the termination of his employment with a member organization.

The NYSE imposed a penalty on Fleischman of a censure and a bar until he complies with the NYSE's request, the bar to become permanent if he does not comply within three months.