The SEC today charged 20 former New York Stock Exchange specialists with trading ahead of customers and other unlawful trading activities. The SEC also reached a settlement with the NYSE over charges the exchange didn't adequately police the specialists. The former specialists - four from Fleet Specialist, now known as Banc of America Specialist; two from Bear Wagner Specialists; one from LaBranche & Co.; five from Spear Leeds & Kellogg Specialists; and eight from Van der Moolen Specialists USA - face sanctions that could include including reimbursing investors for losses plus penalties and bans from the industry.
The NYSE settlement includes an audit of the Big Board's regulatory program every two years and a pilot program for video and audio surveillance of the exchange floor for at least 18 months in at least 20 stocks.
Separately, the NYSE charged 17 of the former specialists with securities fraud violations. The other three had been censured and permanently barred by the exchange for failing to appear and testify in connection with the NYSE investigation into trading ahead of customer orders.