Monthly Disciplinary Actions - April 2008

• An NYSE hearing officer found that from January through August 2003, a former registered representative on the Firm’s equities trading desk made numerous post-execution account name and designation changes to customer orders without obtaining prior supervisory approval. Former RR was able to do so because the Firm did not implement and enforce its policies and procedures that required supervisory review and approval of post-execution account name and designation changes on orders. Furthermore, the Firm’s failure to supervise post-execution account name and designation changes enabled the RR to cause the Firm to make and maintain inaccurate books and records relating to customer orders. Finally, the Firm did not have adequate policies and procedures concerning supervisory review of instant messages (“IMs”) during the relevant period. 

• During the time period January 2002 through June 2005, certain traders in the Firm’s Fixed Income, Currencies and Commodities Division (“FICC Traders”) inadvertently mislabeled certain proprietary orders sent to the NYSE for execution. The FICC Traders did not identify such proprietary orders in listed equity securities as orders subject to Section 11(a)(1)(G) of the Securities Exchange Act of 1934 (“Exchange Act”), commonly referred to as “G” orders, which would require the Firm to yield to non-member customers on the NYSE Floor. As a result of mislabeling these orders, the Firm violated Section 11(a)(1) of the Exchange Act and Rule 11a1-1(T) thereunder and NYSE Rules 90 and 410(b). The Firm also failed to submit accurate account type indicators for comparison and/or settlement for some of those orders in violation of NYSE Rule 132.30 and failed to reasonably supervise certain aspects of the proprietary trading activities of the employees involved so as to prevent mislabeling of orders in listed equity securities. 
• Additionally, during the time period January 2006 through August 2007, certain proprietary orders in listed equity securities entered by Covered Fixed Income Traders and sent to the NYSE for execution were inadvertently mislabeled due to a computer programming problem at the Firm. 

The NYSE imposed a penalty of censure and $225,000 fine. Goldman consented to the penalty.

• Since 1988, the NYSE has required member organizations to report their program trading on a daily basis via a Daily Program Trading Report (DPTR). These reports must include all program trades executed on the NYSE and any other market. NYSE Information Memo 03-9 requires that member organizations submit DPTRs no later than the close of business on the second business day (“T+2”) following the reportable activity, pursuant to NYSE Rule 476(a)(11). The DPTR must include the details of each transaction, such as the number of shares and the dollar value of the shares in the baskets. For CS2 transactions, NYSE Information Memo 03-9 requires that member organizations submit by T+2 detail reports (breakdowns of symbols and the corresponding number of shares for each CS2 basket) and DPTRs.
• An NYSE hearing officer found that during the relevant period, Dresdner had 30 DPTR submissions that were not received on time by the NYSE and filed 52 DPTRs with inaccurate information. In addition, for CS2 transactions, Dresdner failed to submit to the NYSE seven DPTRs and four detail reports.

The NYSE imposed a penalty of censure and a $45,000 fine. Dresdner consented to the penalty.

• An NYSE hearing officer found that Gliozzo violated NYSE Rule 476(a)(7) by initiating inappropriate physical contact while on the NYSE Trading Floor. Specifically, on April 24, 2007, Gliozzo, after a verbal confrontation that involved an employment dispute initiated by a Floor Broker with the Firm, grabbed the Floor Broker’s neck/shoulder area from behind and stopped him as the Floor Broker tried to walk away. Gliozzo believed that the Floor Broker was attempting to leave the Floor with his Floor broker badge and certain other of the Firm’s property.

The NYSE imposed a penalty of censure and a $7,500 fine. Gliozzo consented to the penalty.

• An NYSE hearing officer found that during the period of November 2001 through July 2005 Wolf caused violations of NYSE Rule 472(a)(1) when he operated certain unauthorized websites that advertised investment products and disseminated emails to prospective Firm customers, without the prior approval of his member firm employer. One of the emails Wolf disseminated also contained three attachments of sales literature, which had also not been approved by his member firm employer.

• An NYSE hearing officer found that the Firm, during the period of January 2003 through December 2005, violated various NYSE Rules and federal securities laws with respect to the Firm’s handling of error account transactions and erroneous reports. In addition, the Firm violated NYSE Rule 342 by failing to reasonably supervise and implement adequate supervisory procedures, including a separate system of follow-up and review, reasonably designed to achieve compliance with NYSE rules and federal securities laws pertaining to the processing and documentation of error account transactions and erroneous reports.

The NYSE imposed a penalty of censure and $60,000 fine. W.J. Bonfanti, Inc. n/k/a WJB Capital Group, Inc consented to the penalty.