NYSE Disciplines Firms For Violations On Odd-Lot Orders

The regulatory arm of the New York Stock Exchange has levied a total of $590,000 in fines against four firms for trading violation including those related to odd-lot orders.

The firms consented to the findings without admitting or denying guilt.

Fortis Clearing Americas LLC was fined $225,000 after a NYSE hearing officer in 2007 found that it submitted some inaccurate or incomplete data from late 2006 through mid-2007 and on several occasions from 2006 through 2007 included in nonmember broker-dealer customer's odd-lot orders. Also, the firm failed to supervise and implement adequate controls relating such orders.

BNY ConvergEx Solutions LLC was fined $190,000 on NYSE findings that the firm from November 2006 through March 2009 introduced pre-opening odd-lot market orders that should have been aggregated into lots of 100 shares or more and failed to supervise and implement adequate controls relating to such orders.

E*Trade Financial Corp. (ETFC) was fined $115,000 on findings that thousands of pre-opening odd-lot market orders that could have been rounded, as well as failing to supervise and implement adequate controls.

Merrill Lynch, Pierce, Fenner & Smith Inc. was fined $60,000 on findings that the firm in October 2007, in about 581 instances, engaged in violative trades for a nonmember customer. Also, after being informed of the concerns related to odd-lot trades, it failed to reasonably supervise and implement adequate controls. Merrill is now owned by Bank of America Corp. (BAC).

-By Tess Stynes, Dow Jones Newswires; 212-416-2481; [e-mail]