NYSE, New York Stock Exchange

Summary

Case Note

Violated Sections 15(c)(3) and 17(a) of Exchange Act, Rules 15c3-1, 17a-3 and 17a-5 thereunder, and NYSE Arca Options Rules 4.1 and 11.16(a) by improperly calculating required net capital and creating and maintaining inaccurate records with respect to net capital computations; violated Section 17(a) of Exchange Act and Rule 17a-5 thereunder, and NYSE Arca Options Rules 4.5 and 4.11(a) by filing inaccurate FOCUS Report; violated NYSE Arca Options Rules 11.3(a) and (b) by failing to obtain and review outside brokerage account statements of associated persons, including review for possible misuse of material, non-public information, failing to document such review at least quarterly, and failing to report such accounts on 2007 Annual Compliance Form; violated Exchange Act Rule 17a-3(12)(i) by failing to document required background checks prior to hiring associated persons; violated Section 17(a)(1) of Exchange Act, Rules 17a-4(b)(4) and 17a-4(f) thereunder, and NYSE Arca Options Rule 11.16(a) by failing to retain and preserve in required format electronic communications relating to business of Firm; violated NYSE Arca Options Rules 11.11(a) and (b) by failing to disclose to Exchange in writing required details and terms of expense sharing agreement and by failing to submit to Exchange Financial Arrangement Disclosure Form; violated NYSE Arca Options Rule 11.18 by failing to establish, maintain and/or enforce appropriate written policies and procedures for supervision and control, including separate system of follow-up and review regarding (a) execution and maintenance of agreements with clearing firm, to prevent net capital violations, (b) obtaining and reviewing of associated persons’ outside brokerage account statements and reporting such accounts on Annual Compliance Form, (c) performance of background checks prior to hiring each associated person and (d) retention and review of all business electronic communications. Consent to censure and $25,000 fine.

Case Summary

Savant Trading, LLC of New York, New York, an NYSE Arca Options Trading Permit Holder, consented without admitting or denying guilt to findings of financial and operational deficiencies including net capital, books and records, and supervision.

This matter primarily involves net capital, books and records, and supervisory deficiencies disclosed during the period of review in the 2007 FINOP Report. The Firm’s violative activity included, among other matters: improper calculations of net capital; failure to obtain, review and adequately document its review of all outside brokerage account statements of certain associated persons and failure to disclose all such accounts on its 2007 Annual Compliance Form; failure to document required background checks prior to hiring certain associated persons; failure to retain and preserve certain electronic communications relating to the business of the Firm; and failure to reasonably supervise its business operations and associated persons’ activities to ensure compliance with applicable rules and regulations in the foregoing areas.

NYSE Arca imposed a penalty of a censure and $25,000 fine. Savant Trading, LLC consented to the penalty.

View Text of Disciplinary Decision (pdf)

Monthly Disciplinary Actions - March 2009