The New York Stock Exchange filed disciplinary actions Tuesday against Wedbush Morgan Securities for failing to submit accurate trading data, making misstatements to regulators and refusing to cooperate with an investigation.
The charges came as the stock exchange's regulators fined another 20 U.S. securities firms a combined $5.85 million for inaccuracies and systemic problems in reporting "blue sheet" trading data to regulators. Blue sheets are part of investigations into insider trading, market manipulation and other potential violations.
Los Angeles-based Wedbush Morgan made "false written statements to the NYSE concerning the extent of (its) blue sheet system deficiencies," the exchange said in an announcement of the disciplinary actions. Regulators also claim Wedbush continued to submit inaccurate blue sheets to the NYSE claiming the deficiencies had been corrected.
Ed Wedbush, founder and president of Wedbush Morgan Securities, said his company did nothing wrong and planned to contest the allegations. He said regulators refused to recognize an endemic technical problem in its data provider, Thomson BETA Systems, a unit of Thomson Financial.
"We contend these are absolutely false accusations," said Wedbush. "When we are wrong, we'll settle and pay the penalty. But where we are right, we aren't going to do that."
The case ultimately will be heard by a three-judge exchange hearing panel.
The New York exchange has come under fire in the past year by the Securities and Exchange Commission for ignoring violations by its members that shortchanged investors. The SEC issued a report last year stating that 2.2 billion shares were improperly traded over the past three years, costing investors $155 million.
Of the 20 firms nationwide, six were fined $500,000 each, including Merrill Lynch; Pierce, Fenner & Smith Inc.; Neuberger Berman LLC; NF Clearing Inc.; UBS Securities LLC; and Wachovia Capital Markets LLC. Another five firms were fined $300,000 each and the remaining nine owe $150,000 each.
For reprint and licensing requests for this article, CLICK HERE.
Stories You May Also Be Interested In
- Investors Vote for Governance Reform at Cheesecake Factory
- Avery Pays $500,000 to Settle SEC Case
- Booming Bank's Parent Prepares For Public Debut
- NYSE, SEC Fine Bear Stearns
- Medical Test Firm Under Grand Jury Investigation
- Regulators Beat Around Wedbush
- IndyMac Kicked Off NYSE
- City National Pays $750,000 to End Federal Money-Laundering Investigation