Broker-Dealer Litigation - Greenberg Traurig LLP

firm also consented to findings that it violated NYSE Rule 123C itself, based on both entry of
orders in situations where a market imbalance was not found to exist, and cancellation of orders
after the cut-off time for cancellations. In resolution of all violations, the firm consented to a
censure, a $22,500 fine, and an undertaking to enhance its procedures and controls governing the
entry, cancellation, and supervision of MOC and LOC orders.
Matter of Credit Suisse Securities (USA) LLC, NYSE Hearing Panel Decision 11-NYSE-5; 2011
NYSE Disc. Action LEXIS 5 (Sept. 14, 2011).
In a settled disciplinary proceeding, consented to by respondent without admitting or
denying the allegations, respondent was found to have violated NYSE Rule 342 by failing to
reasonably supervise and implement adequate controls for compliance with NYSE rules
regarding entry and cancellation of Market-on-Close (“MOC”) and Limit-on-Close (“LOC”)
orders. Specifically, while the NYSE acknowledged that the firm had policies and procedures
reasonably designed to ensure compliance with NYSE rules relating to entry, modification or
cancellation of MOC and LOC orders, including reasonable policies and procedures for
conducting a follow-up and review, the firm failed to prevent the entry or cancelation of MOC
and LOC orders after certain mandated cut-off times due to technical issues within the firm’s
order entry systems. Respondent was also found to have violated NYSE Rule 123C in
connection with the entry and cancelation of such orders in 94 transactions. As a resolution of
both the failure to supervise and the order handling charges, the firm consented to a censure and
a $50,000 fine.
In re Lombardi & Co., Inc., NYSE Hearing Panel Decision 2011-4; 2011 NYSE Disc. Action
LEXIS 4 (May 25, 2011).
In a settled disciplinary proceeding, consented to by respondent without admitting or
denying the allegations, respondent was found to have violated NYSE Rule 342 in two respects.
In certain areas, it failed to follow its supervisory procedures, and in other areas it failed to
maintain adequate written supervisory procedures in other areas. Specifically, the firm’s failure
to follow its procedures was connected to violations in the areas of registration and licensing,
notification of NYSE of terminations of employment and return of identification badges,
evidencing supervisory review of employees trading, and maintaining adequate books and
records of employees’ forms U-4. In addition, NYSE found that the firm lacked adequate
procedures dealing with review and resolution of “d/k’ed” trades, reporting and/or identification
of manual trades or crosses, monitoring and preventing publishing quotations that lock or cross
markets, preventing acceptance of sub-penny orders, and maintenance of a separate error account
for errors of executions on other market centers. As a result, the firm consented to a censure and
a $12,500 fine.
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