Monthly Disciplinary Actions - March 2006

• Lemaitre was a senior research analyst at his member firm employer. On or about September 15, 2003, during the scope of his employment at such firm, Lemaitre obtained embargoed material information concerning the results of certain clinical trials that were performed by a company with respect to a medical device that it was developing. Prior to its official public release, Lemaitre disseminated such information in internal firm communications and in a written research report that was provided to certain customers of the firm. As a result, Lemaitre violated Exchange Rule 435(5) and engaged in conduct inconsistent with just and equitable principles of trade.

The NYSE imposed a penalty of a censure, two-month bar and a $50,000 fine.  Lemaitre consented to the penalty.

• An NYSE hearing panel found that from June 1999 through August 5, 2002, Laszlo committed sales practice and other violations in the accounts of numerous customers. During a two-day period in July 2002, Laszlo sold an over-the-counter equity on an unauthorized basis in at least 40 customer accounts.
• In addition, with regard to eight customer accounts, Laszlo committed violations variously including unauthorized and unsuitable trading, discretionary trading without written authorization, causing inaccurate information to be recorded on new account documents, omitting risks associated with investments, mismarking order tickets, and misrepresenting account values.

The NYSE imposed a penalty of a censure and a three-and-a-half-year bar.  Laszlo consented to the penalty. 

• An NYSE hearing panel found that during the period from February 2000 to July 2001, Cohen made unsuitable trades in two customer accounts for which he was authorized to exercise discretion.

The NYSE imposed a penalty of a censure and a six-month bar. Cohen consented to the penalty. 

• An NYSE hearing panel found that during the period from November 1996 through May 2001, Stevens violated NYSE Rule 352(c) in that he shared in losses from transactions in a customer’s account by making payments to that customer totaling $23,000.

• An NYSE hearing panel found that from December 1998 to June 2001, Conti effected unsuitable transactions in one customer account. Conti also exercised discretion in another customer account without written authorization, caused his member firm employer to maintain inaccurate account documents, and shared in that second customer’s losses.

The NYSE imposed a penalty of a censure and a two-month bar. Conti consented to the penalty. 

• An NYSE hearing panel found that during the period from January 1, 2002 to May 9, 2003, Sodhi misappropriated approximately $474,700 from two customer accounts at his member firm employer by means of unauthorized Letters of Authorization and unauthorized checks, and caused inaccurate information to be reflected on the firm's books and records by completing new account documents and falsely identifying a customer's residence.  

• An NYSE hearing panel found in August and September 2003, Cartwright misappropriated funds from his member firm employer on two occasions and attempted to misappropriate funds from his member firm employer. Cartwright also caused his member firm employer to maintain inaccurate books and records by creating a false commission ticket and making a false entry on a report.
• The panel also found that Cartwright did not comply with written requests by the NYSE for information.

The NYSE imposed a penalty of a censure and permanent bar. 

• An NYSE hearing panel found that in November 2003, Eades misappropriated nearly $8,000 that was to be deposited into a firm account on behalf of a trust. In addition, between November and December 2003, Eades borrowed over $80,000 from three customers without the firm’s prior approval, and never notified the firm that she obtained personal loans from clients.
• The panel also found that in July 2003, Eades entered into a loan agreement, whereby she agreed to become a partial owner of a business and share in the company’s future profits; and over the next several months, Eades loaned monies to that company and acquired an ownership interest. Eades did not obtain written approval before engaging in this outside business activity.
• In addition, on December 12, 2003, Eades made an unsuccessful bid to borrow money from two elderly customers. When the branch manager confronted Eades, inquiring whether she solicited these loans, Eades denied asking customers for money. The denial was a misstatement.

The NYSE imposed a penalty of a censure and permanent bar.  Eades consented to the penalty.

• An NYSE hearing panel found that Prim engaged in an outside business activity without making a written request and receiving the prior written consent of his member organization employer and also made misstatements to his member organization employer concerning that outside business activity.

The NYSE imposed a penalty of a censure and five-month bar. Prim consented to the penalty.

• An NYSE hearing panel found that from early 2002 through late 2003, Soden engaged in an outside business activity by helping to establish a business enterprise involved in billing for staffing and consulting on human resource matters witout the prior written consent to his member firm employer. Soden received approximately $30,000 in compensation for his services.
• In addition, Soden omitted this outside business affliation when he completed a disclosure questionnarie at his member firm employer.

• An NYSE hearing panel found that from 2000 through 2003, Wiklund posted at least 128 communications concerning securities on Internet message boards without the knowledge and approval of his member firm employer. These communications contained speculative statements concerning securities he owned at the time, which could reasonably be expected to affect investor interest.

The NYSE imposed a penalty of a censure and three-month bar. Wiklund consented to the penalty.

• An NYSE hearing panel found that, while she was employed by a member firm organization, Hernandez misappropriated funds belonging to customers and was later convicted of felony criminal charges relating to these misappropriations.
• In addition, Hernandez failed to comply with one or more written requests by the NYSE for a written statement concerning her conduct at the firm.

The NYSE imposed a penalty of a censure and permanent bar. Hernandez consented to the penalty.

• An NYSE hearing panel found that from April to July 2001, at the direction of a third party and without receiving authorization from the customers, Locklear liquidated the firm retirement accounts of two customers. The third party then siphoned off the customers’ assets by: 1) opening checkwriting accounts with the firm in the customers’ names without their knowledge; 2) causing securities and money to be transferred to the checkwriting accounts; 3) forging withdrawal requests that resulted in the issuance of several checks by the firm to one of the customers which the third party obtained with Locklear’s assistance; and 4) forging and cashing a series of checks drawn on the customers’ accounts made payable the third party and others. Locklear received a portion of the funds obtained from the customers accounts. 

• An NYSE hearing panel found that Mersereau misappropriated customer funds by endorsing, without authorization, a customer’s check that was taken from the branch office by her friend and deposited the proceeds into her personal bank account.

The NYSE imposed a penalty of a censure and permanent bar. Mersereau consented to the penalty.

• An NYSE hearing panel found that from July 1, 2003 to July 29, 2004 Oliveros misappropriated approximately $149,700 from three customer accounts at his member firm employer and transferred these funds into a fourth customer's account and withdrew money from this account by using an ATM card he fraudulently obtained.

The NYSE imposed a penalty of a censure and permanent bar. Oliveros consented to the penalty.

• An NYSE hearing panel found that Simpson engaged in conduct inconsistent with just and equitable principles of trade in that she failed to disclose her prior criminal history to her member firm employer on her employment application submitted in March 2004.

The NYSE imposed a penalty of a censure and a six-month bar. Simpson consented to the penalty.

• An NYSE hearing panel found that Becerra engaged in conduct inconsistent with just and equitable principles of trade in that he failed to disclose his prior misdemeanor conviction on his employment application submitted to his member firm employer.

The NYSE imposed a penalty of a censure and a two-year bar. Becerra consented to the penalty.

• An NYSE hearing panel found that in June 2004, Redman failed to disclose his criminal history on his application for employment submitted to his member firm employer.
• In addition, Redman failed to comply with written requests by the NYSE for testimony and information.

The NYSE imposed a penalty of a censure and a permanent bar.

• An NYSE hearing panel found that Turner failed to comply with NYSE requests for information and testimony, impersonated a customer of a member firm in order to cause an account to be transferred to him and then lied about the impersonation to a compliance officer.

The NYSE imposed a penalty of a censure and a permanent bar. Turner consented to the penalty.

• An NYSE hearing panel found that Murray failed to comply with one or more written requests by the NYSE for information with respect to activities that occurred while he was an employee of a member firm.

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

• An NYSE hearing panel found that Kelchner failed to timely comply with NYSE requests for information concerning matters that occurred prior to the termination of his status as a registered employee of a member organization.

The NYSE imposed a penalty of a censure and three-month bar to begin following the conclusion of his statutory disqualification period. Kelchner consented to the penalty.

• An NYSE hearing panel found that, during an investigation into misappropriation of firm funds by Fisher, he failed to comply with a written request by the NYSE that he provide information and testimony regarding matters that occurred during his employment with a former member firm organization. 

The NYSE imposed a penalty on Fisher of a censure and a permanent bar. Fisher consented to the penalty.

• An NYSE hearing panel found that Breaux failed to comply with one or more written requests by the NYSE that she provide a written detailed explanation concerning one or more matters that occurred prior to the termination of her status as a non-registered employee of a member firm organization. 

The NYSE imposed a penalty on Breaux of a censure and a permanent bar. Breaux consented to the penalty.

• Coghlan, who specialized in the area of retirement planning, essentially conducting seminars for employees of various corporations, distributed or made available marketing materials that had not been approved by his firm's marketing and legal departments prior to dissemination at a seminar.

The NYSE imposed a penalty of a censure and a $25,000 fine, which was reduced from the penalty of a censure and a $50,000 fine that Coghlan had consented to.

• An NYSE hearing panel found that from August 2001 through September 2002, Venditti failed to adequately supervise two employees and to prevent them from, on numerous occasions, disseminating unapproved electronic communications consisting of market letters and sales literature to multiple firm customers.   Certain of these communications violated Section 5(b)(1) of the Securities Act of 1933. Venditti failed to detect that the employees were sending out such electronic communications without complying with firm policies requiring supervisory pre-use review and approval.
• In addition, the panel found Venditti permitted one of the employees above, who during most of the relevant period above was unregistered, to perform duties customarily performed by a registered representative.

The NYSE imposed a penalty of a censure, one-month supervisory bar and a conditional requirement to retake and pass the Series 9 and 10 examinations. Venditti consented to the penalty.

• An NYSE hearing panel found that during the period August 2001 through September 2002, on numerous occasions, Tamai permitted the head of his member firm’s Derivative Sales Desk to disseminate unapproved electronic communications consisting of market letters and sales literature to multiple firm customers. Certain of these communications violated Section 5(b)(1) of the Securities Act of 1933. Tamai failed to ensure that the head of that sales desk submitted such communications to a qualified supervisor for pre‑use review and approval as required by the Exchange’s rules and the firm’s policies and procedures.

The NYSE imposed a penalty of a censure, a supervisory bar of three months and upon re-employment in a supervisory capacity a requirement to retake and pass the Series 9 and 10 examinations.

Without admitting or denying guilt, Carlson consented to findings of sales practice violations in that between May 2001 and April 2002, he exercised discretion in the accounts of at least 12 customers by failing to contact them prior to placing shares of new issue preferred stock or convertible preferred stock in their accounts. In addition, Carlson engaged in conduct inconsistent with just and equitable principles of trade in that he transferred all or some of those new issue shares to at least 17 other customer accounts using error trade forms.

On appeal, the NYSE Board of Directors reversed the decision of the hearing panel, which imposed an eight-month bar, and reinstated the original penalty agreed to by the parties of a censure and a ten-month bar.