10 Brokerages to Pay $473,000 in Settlement
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Brokerage units of Deutsche Bank, Merrill Lynch and Goldman Sachs were among 10 firms settling regulators’ charges they violated a market rule that’s supposed to provide an orderly start to trading of initial public offering shares.
The firms agreed to pay a total of $473,000 to settle charges by the regulatory branch of the National Association of Securities Dealers. Deutsche Bank’s NDB Capital Markets was fined $250,000, NASD Regulation said. Nine other market makers agreed to pay $10,000 to $61,000 in penalties.
The cases involve rules about how to resolve pre-trading price quotes that cause “locked” or “crossed” markets in particular stocks--where a firm offers to sell stock for the same price or less than other brokers will pay to buy shares.
Locked and crossed markets can stall or disrupt trading because Nasdaq dealers’ computerized trading systems often shut down automatically when they find those conditions, said Stephen Luparello, NASD Regulation’s executive vice president.
The cases announced Monday came from a review of quotes for IPO stocks from March 1, 1999, to June 15, 1999, NASD Regulation said.
In settling the cases, the firms neither admitted nor denied the allegations.
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