Victims Of Improper Trading By NYSE Specialist Firms Receive Compensation

by Glen Shapiro, LawAndTax-News.com, New York

21 July 2006

The US Securities and Exchange Commission announced on Wednesday that the fund administrator has begun making distributions to compensate customers who were injured by unlawful proprietary trading conducted by seven New York Stock Exchange specialist firms.

The distribution funds include approximately $247 million in disgorgement and civil monetary penalties paid by the firms to settle charges of unlawful proprietary trading brought by the SEC. The first distribution includes payments totaling approximately $52 million.

"Today's distribution exemplifies the SEC's continuing commitment to investor restitution," explained SEC Chairman Christopher Cox, continuing:

"The substantial monetary remedies imposed in this case will compensate injured customers as well as deter future misconduct. It will also remind investors that the SEC continues to keep a close eye on market participants to ensure that markets function properly."

On March 30, 2004, and July 26, 2004, the SEC brought settled administrative proceedings against Bear Wagner Specialists LLC, Fleet Specialist, Inc. (now Banc of America Specialist, Inc.), LaBranche & Co. LLC, Spear, Leeds & Kellogg Specialists LLC, Van der Moolen Specialists USA, LLC, Performance Specialist Group LLC, and SIG Specialists, Inc.

Pursuant to the settlement orders, the firms paid over $247 million to compensate injured customers.

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