Fleet Securities, Inc. of New York City, a member firm, consented without admitting or denying guilt to findings of financial, operational and supervisory deficiencies.
- An NYSE hearing panel found that the firm failed to exercise reasonable supervision with respect to certain required financial reporting calculations.
- The panel found that on August 31, 2000, the firm failed to prepare accurate Net Capital and Customer Reserve computations as a result of, among other things, understating borrowed securities by 144.6 million dollars, failing to include approximately 12.5 million dollars in the Proprietary Accounts of Introducing Brokers (PAIB) reserve formula and including 16.4 million dollars of unsecured receivables as an allowable asset.
- In addition, the panel also found the firm failed to submit to the Exchange accurate account type indicators with respect to specific transactions.
The NYSE imposed a penalty of a censure and a $100, 000 fine. The firm consented to the penalty.
David A. Finnerty of Bay Head, New Jersey, a former Exchange member and specialist with a specialist firm was found guilty, after a contested hearing, of failing to cooperate in an investigation by the NYSE Division of Enforcement.
- An NYSE hearing panel unanimously found that Finnerty failed to comply with a request by the Exchange that he appear and testify in an Enforcement investigation concerning allegations that he violated federal securities laws and Exchange Rules in connection with his trading activities in three Exchange listed securities.
- The panel found that Finnerty had adequate notice of his testimony. He had testified twice before and had been advised that Enforcement reserved the right to call him back should it become necessary. Significantly, the panel also found in a regulatory investigation it is the regulator and not the Respondent that controls the scope and scheduling of the investigation.
- This disciplinary proceeding is an outgrowth of the continuing investigation by the Exchange of individual responsibility for breaching the specialists’ duty as agent to public orders, which was the focus of major enforcement actions taken in 2004 against NYSE specialist firms.
The NYSE imposed a penalty on Finnerty of a censure and bar until he complies with the Exchange’s requests, which will become a permanent bar if he does not comply within 60 days.
James Vincent Parolisi of Massapequa, New York, consented without admitting or denying guilt to a finding that he failed to cooperate in an investigation by the NYSE Division of Enforcement.
- An NYSE hearing panel found that Parolisi failed to comply with written requests by the Exchange that he appear and testify concerning allegations that he violated federal securities laws and Exchange rules in connection with his trading as specialist in three Exchange listed securities during the period 1999 through 2003, by engaging in improper trading for the firm’s dealer or proprietary account, such as interpositioning and trading ahead of executable customer orders.
- This disciplinary proceeding is an outgrowth of the continuing investigation by the Exchange of individual responsibility for breaching the specialists’ duty as agent to public orders, which was the focus of major enforcement actions taken in 2004 against NYSE specialist firms.
The NYSE imposed a penalty of a censure and permanent bar. Parolisi consented to the penalty.
Gail Perry-Mason of Grosse Pointe Park, Michigan, a registered representative, was found guilty after a contested hearing of findings that she abused the trade correction process and caused the transfer of a trade with unrealized losses between customer’s accounts.
- An NYSE hearing panel found that, during July 2000, Perry-Mason abused the trade correction process by causing the transfer, between customers’ accounts, of a trade at a price to the transferee inferior to the prevailing market price.
The NYSE imposed a penalty of a censure and $7,500 fine.
Thomas S. Lowey of San Ramon, California, a former registered representative, consented without admitting or denying guilt to findings that he engaged in sales practice misconduct in eight customer accounts and made misstatements to his member firm employer.
- An NYSE hearing panel found that, during the period of approximately 1998 through February 2002, Lowey exercised numerous discretionary trades without written authorization in the accounts of eight customers and, on two occasions, made misstatements to his member firm employer with regard to the trading.
The NYSE imposed a penalty of a censure and nine month bar. Lowey consented to the penalty.
- An NYSE hearing panel found that Keane failed to comply with written requests by the Exchange for documents and that she appear and testify concerning an allegation that she had violated the corporate credit card policy of her member firm employer.
- An NYSE hearing panel found that Hall failed to disclose on an employment application and on a Form U-4 submitted her member firm employer a misdemeanor conviction relating to the theft of funds. The conviction subjected Hall to a statutory disqualification.
The NYSE imposed a penalty on Hall of a censure and a four-year bar.
Arlen Jolfaie Sookias of Glendale, California, a former non-registered employee, consented without admitting or denying guilt to findings that he failed to disclose his criminal history to his member firm employer, among other violations.
- An NYSE hearing panel found that Sookias failed to disclose, on an employment application submitted to his member firm employer, his criminal history that included two misdemeanor convictions that subjected him to a statutory disqualification. One of the misdemeanor convictions related to theft and the other related to the filing of a false insurance claim and receiving payment based on that false claim.
- The panel also found that Sookias failed to promptly disclose his criminal history after he commenced employment with the firm.
The NYSE imposed a penalty on Sookias of a censure and an eight-year bar. Sookias consented to the penalty.
The cases, prosecuted by the NYSE Division of Enforcement, may be subject to review by the Securities and Exchange Commission and, thereafter, federal courts.
About NYSE Regulation
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.
