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).
