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Lazard Frères & Co., LLC of New York City, a member firm, consented without admitting or denying guilt to findings of supervisory failures that relate to its business activities on the trading floor.
- An NYSE hearing panel found that, in or about May 2001, and for some time prior to that date, the firm failed to provide reasonable supervision of its business activities on the trading floor of the Exchange.
- The firm’s failure of supervision related to the lack of adequate written procedures governing supervision of certain of the firm’s business activities on the floor, failing to evidence certain supervisory reviews and failing to evidence firm supervision or supervisory reviews of suspense account reconciliations.
The NYSE imposed a penalty of a censure and a $75, 000 fine. Lazard Frères consented to the penalty.
Former Member Firm Disciplined for Books and Records violations and other failures.
J.J. Dalessandro II, LTD of New York City, a former member firm, consented without admitting or denying guilt to findings of books-and-records, financial, operational and supervisory deficiencies. The firm has been the subject of previous Exchange disciplinary action relating to this matter for failing to produce certain documents and information pursuant to the Exchange’s written requests. (See NYSE Hearing Panel Decision 04-01).
- An NYSE hearing panel found that, during the period of January 2000 through December 2002, when it was a member organization of the Exchange, the firm failed to ensure compliance with certain Exchange rules and federal securities laws by:
- failing to maintain original order tickets;
- failing to maintain accurate and complete details of error transactions;
- improperly processing, through its error account transactions that were not to offset a transaction made in error;
- failing to conduct supervisory reviews of employee security accounts;
- failing to file Forms 600TC and to accurately file a FOCUS Report; and
- failing to maintain adequate documentation to substantiate monies received from floor brokerage work.
Ambriz Mack of Houston, Texas, a former registered representative, consented without admitting or denying guilt to findings of misappropriation and books and records violations.
- An NYSE hearing panel found that, during the period July 2002-February 2003, Mack established two fictitious accounts at the firm and, thereafter, caused the transfer of shares of an equity income fund, valued at approximately $90,978, from a customer’s account to the fictitious accounts.
The NYSE imposed a penalty of a censure and permanent bar. Mack consented to the penalty.
Patricia A. Valdez of Willis, Texas, a former non-registered employee at two member firms consented without admitting or denying guilt to findings of misappropriation and making material misstatements.
- An NYSE hearing panel found that, during the period September 2002-December 2003, Valdez misappropriated funds belonging to one of her member firm employers by taking and cashing $17,500 in gift checks from the branch where she was employed. Further, on Nov. 20, 2003, Valdez made material misstatements on her employment application to the other member firm and, on Dec. 22, 2003, she made material misstatements to staff of the firm.
The NYSE imposed a penalty of a censure and permanent bar. Valdez consented to the penalty.
Frank Joseph Ali, of New York City, New York, a former floor clerk of a member firm, consented without admitting or denying guilt to findings that he participated in an improper trading arrangement and failed to discharge his duties as a compliance officer.
- Ali also failed to reasonably discharge his duties as a compliance officer and supervisor in that he failed to prevent or halt the misconduct.
An NYSE hearing panel found that, during the period December 2000 through October 2001, Ali participated in an improper trading arrangement in which a floor broker initiated, effected and executed transactions for an account with respect to which Ali and the floor broker exercised investment discretion and with respect to which there were no customer orders.
The NYSE imposed a penalty on Ali of a censure, a five-year bar from functioning in a compliance or supervisory capacity and an undertaking that he cooperate with the Exchange and testify fully and truthfully in any Exchange disciplinary proceeding in connection with which the Division of Enforcement requests his testimony.
Ametza Iveliths Delgado of San Sebastian, Puerto Rico, a former registered representative, was found guilty of failing to cooperate in an investigation by the NYSE Division of Enforcement of allegations of sales practice misconduct.
- An NYSE hearing panel found that Delgado failed to comply with written requests by the Exchange that she appear and testify.
The NYSE imposed a penalty on Delgado of a censure and bar until she complies with the Exchange’s requests.
All cases, prosecuted by the NYSE Division of Enforcement, may be subject to review by the Securities and Exchange Commission and, thereafter, federal courts.
On 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.
