Monthly Disciplinary Actions - December 2008

• An NYSE hearing officer found that between December 2003 and July 2004 the Firm’s Equity Finance Group (EFG) trading desk violated Firm guidelines and certain NYSE Rules in connection with implementing a trading strategy, and the Firm also failed to reasonably supervise certain activities of its New York EFG trading desk. Specifically, the Firm’s EFG trading desk failed to maintain its independence in the conduct of certain over-the-counter stock transactions involving American Depository Receipts in which its affiliate, Goldman Sachs International (GSI), was the counterparty. In certain of these contemporaneous transactions, GSI directed GS&Co. with respect to, among other things, the number of shares to trade, the GS&Co. account in which the transactions should be booked and the interdealer broker to use in their execution. In some instances, the Firm also failed to maintain adequate order tickets of the transactions and to report the trades to the NYSE as required by NYSE rules. In connection with that conduct and these activities, the Firm failed reasonably to supervise or control certain activities of its EFG by failing to establish procedures reasonably designed to: detect and prevent improper trades between affiliates, monitor certain trading activities conducted by the New York EFG trading desk, make and preserve certain books and records, and ensure compliance with the uptick rule and certain NYSE reporting requirements.  

The NYSE imposed a penalty of a censure and $600,000 fine to be paid in equal shares to NYSE and FINRA. Goldman, Sachs & Co. consented to the penalty.

• An NYSE hearing officer found that between 2004 and March 2006, Hagis, an NYSE Floor clerk, drew offensive sexual images and electronically transmitted those images to a female Floor broker, via the the Broker Booth Support System during the trading day.

The NYSE imposed a penalty of a censure and $7,500 fine and successful completion of sexual harassment training. Hagis consented to the penalty.

• This matter primarily involves books and records and supervisory deficiencies caused by the Respondent and disclosed in the referrals and FinOp examinations conducted of Partners, Traders, and Vtrader in 2005 and/or 2006. 
• For the 2005 Partners Referral and 2006 Partners Exam Report, Respondent caused violations relating to inaccurate net capital computations and/or methodology, the inaccurate and untimely submission of FOCUS Reports, the failure to properly retain/store certain books and records and the failure to reasonably supervise Partners’ associated persons to ensure compliance in connection with the foregoing violations.
• For the 2005 Traders Referral and 2006 Traders Exam Report, Respondent caused violations relating to inaccurate net capital computations and/or methodology, the inaccurate and untimely submission of FOCUS Reports, and the failure to reasonably supervise Traders’ associated persons to ensure compliance in connection with the foregoing violations.
• For the 2006 Vtrader Exam Report, Respondent caused violations relating to inaccurate net capital computations and/or methodology, the failure to preserve certain business e-mails and instant messages, the failure to implement policies and procedures to prevent the misuse of material nonpublic information, and the failure to reasonably supervise Vtrader’s associated persons to ensure compliance in connection with the foregoing violations. 

NYSE ARCA Equities and NYSE ARCA Options imposed a penalty of a censure and $20,000 fine. Additionally, within 90 days of this Decision, Kurlan must re-take the Financial and Operations Principal Qualification Examination (“Series 27”). Kurlan cannot act or serve as a Financial and Operations Principal for any OTP or ETP holder after 90 days beyond the date of this Decision unless he has passed the Series 27 examination and is properly approved and registered. 

• This matter primarily involves books and records and supervisory deficiencies caused by the Respondent and disclosed in the referrals and FinOp examinations conducted of Partners, Traders, and Vtrader in 2005 and/or 2006. 
• For the 2005 Partners Referral and 2006 Partners Exam Report, Respondent caused violations relating to inaccurate net capital computations and/or methodology, the inaccurate and untimely submission of FOCUS Reports, the failure to properly retain/store certain books and records and the failure to reasonably supervise Partners’ associated persons to ensure compliance in connection with the foregoing violations.
• For the 2005 Traders Referral and 2006 Traders Exam Report, Respondent caused violations relating to inaccurate net capital computations and/or methodology, the inaccurate and untimely submission of FOCUS Reports, and the failure to reasonably supervise Traders’ associated persons to ensure compliance in connection with the foregoing violations.
• For the 2006 Vtrader Exam Report, Respondent caused violations relating to inaccurate net capital computations and/or methodology, the failure to preserve certain business e-mails and instant messages, the failure to implement policies and procedures to prevent the misuse of material nonpublic information, and the failure to reasonably supervise Vtrader’s associated persons to ensure compliance in connection with the foregoing violations. 

NYSE ARCA Equities and NYSE ARCA Options imposed a penalty of a censure and $20,000 fine. Additionally, within 90 days of this Decision, Kurlan must re-take the Financial and Operations Principal Qualification Examination (“Series 27”). Kurlan cannot act or serve as a Financial and Operations Principal for any OTP or ETP holder after 90 days beyond the date of this Decision unless he has passed the Series 27 examination and is properly approved and registered.