NON BONAFIDE ORDERS that are cancelled result in FINE!!!!!!!!
Gee how appropriate since starting this thread!!!!!!!!!!!!1
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PRN NASD'S REGULATORY SANCTIONS TRADER FOR LIMIT ORDER VIOLATIONS
Jul 14 1999 8:50
WASHINGTON, July 14 /PRNewswire/ -- NASD Regulation's National
Adjudicatory Council (NAC) ordered Michael B. Jawitz to pay a $50,000 fine, be
suspended from the securities industry for one year, and then requalify as an
equities trader.
The NAC found that Jawitz engaged in deceptive conduct by entering
fictitious limit orders into his member firm's order execution system that led
to non-bona fide transactions. The NAC also found that by engaging in this
type of conduct and violating the NASD's limit order protection rule, Jawitz
abdicated his fiduciary responsibility by not protecting the customers' limit
orders. The conduct occurred in 1995 and 1996.
Initially, the Market Regulation Committee alleged that Jawitz engaged in
manipulative, deceptive, or fraudulent conduct when he placed 184 fictitious
limit orders in 30 Nasdaq(R) stocks and then canceled them. While the Market
Regulation Committee found that Jawitz placed fictitious limit orders,
violated the NASD's limit order protection rule, and caused non-bona fide
transactions to be publicly disseminated, the Market Regulation Committee,
nevertheless, dismissed the charge that Jawitz did so with the intent to
manipulate or defraud. Jawitz then appealed the other findings of the Market
Regulation Committee to the NAC. When a case is appealed or called for
review, the entire case -- along with all the findings -- is reviewed. In Story 2 / 20: 99 <GO> for list of story options. Equity T N I
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this instance, the NAC determined that Jawitz did indeed engage in deceptive
conduct and reinstated the finding.
The NAC found that Jawitz engaged in deceptive conduct and intentionally
prevented the execution of 75 customer limit orders in violation of the NASD's
limit order protection rule. According to the limit order protection rule,
brokerage firms must fill a customer's limit order before they trade the same
securities for their own account at prices equal to or better than the
customer limit order.
Jawitz entered fictitious limit orders into the firm's order execution
system at superior prices in order to avoid having to execute customer limit
orders that were already in the firm's system. The fictitious limit orders
were executed and were reported to the Nasdaq quotation tape. Although Jawitz
canceled the trades, dealers and public investors had no reason to believe
that the reported transactions did not reflect legitimate trades and
legitimate cancellations.
Investors can obtain the disciplinary record of any NASD-registered broker
or brokerage firm by calling (800) 289-9999, or by sending an e-mail through
NASD Regulation's Web Site (www.nasdr.com).
NASD Regulation oversees all U.S. stockbrokers and brokerage firms. NASD
Regulation, and The Nasdaq Stock Market, Inc., are subsidiaries of the
National Association of Securities Dealers, Inc. (NASD(R)), the largest
securities-industry self-regulatory organization in the United States.
For more information on NASD Regulation, visit the Web site www.nasdr.com.
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SOURCE NASD Regulation
-0- 07/14/99
/CONTACT: Nancy A. Condon, 202-728-8379, for NASD Regulation/
/Web site: nasdr.com
nasd.com |
