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In the charging document, the Exchange alleges that, from approximately August 2000 through December 2001, Furino participated in a fraudulent scheme with an individual who engaged in day trading through the facilities of a non-member broker-dealer. Through this scheme, Furino communicated confidential information concerning his employer’s large customer orders to the trader to enable the trader to use the information to improperly trade ahead of those large customer orders. After trading ahead of the large customer orders, the trader, often with the help of Furino, would enter an order through Furino’s employer to liquidate his position. As a result of this misconduct, the trader profited from the short-term price changes that resulted from the subsequent execution of the large customer order while the customer of Furino’s employer received an inferior price compared to that received by the trader. The Exchange alleges that, in exchange for the confidential information, the trader compensated Furino with cash payments that were not disclosed to Furino’s employer.
The charges levied by the Exchange against Furino include Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5, promulgated thereunder, as well as Exchange Rules 476(a)(5), 476(a)(6) and 476(a)(7).
About NYSE RegulationOn December 17, 2003, the SEC approved a new governance structure for the NYSE. Under the new design, the NYSE Board of Directors is comprised solely of independent directors, except for the chief executive officer, who have no affiliation with any regulated member firm. A new position of chief regulatory officer was created and reports directly to the board of directors through a new Regulatory Oversight Committee. As a result, NYSE Regulation is insulated from potential influence from NYSE members and member firms, operates separately from the business side and is independent in its decision-making.
NYSE Regulation plays a critical role in monitoring and regulating the activities of its members, member firms and listed companies, as well as enforcing compliance with NYSE rules and federal securities laws. Nearly 400 of the largest securities firms in America are members of the New York Stock Exchange. These firms service 92 million customer accounts, or 90 percent of the total public customer accounts handled by broker-dealers, with total assets of over $3 trillion. They operate from 19,000 branch offices around the world and employ 146,000 registered personnel. Nearly 700 employees, or more than 40 percent of the Exchange’s staff, work for NYSE Regulation, which consists of four divisions: Market Surveillance, Member Firm Regulation and Enforcement and Listed Company Compliance.
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