[On the record] Information Memo
New York Stock Exchange, Inc.
20 Broad Street
New York, NY 10005
Member Firm Regulation
Number 05-67
September 14, 2005
I call your attention to #3...and the brokers kept on selling for 2wks later
ATTENTION: CHIEF FINANCIAL OFFICERS, CHIEF OPERATIONAL
OFFICERS, AND CASHIERING DEPARTMENT
TO: ALL MEMBERS AND MEMBER ORGANIZATIONS
SUBJECT: SUPERVISION OF TRADING - BANCORP INTERNATIONAL
GROUP
On August 31, 2005 the Securities and Exchange Commission temporarily suspended
trading in shares of Bancorp International Group, Inc. (Pink Sheets - Symbol: BCIT)
because it appeared that a significant amount of the shares being traded were
counterfeit. The suspension, which began at 9:30 am (See Securities Exchange Act of
1934 Release # 52363), is scheduled to terminate at 11:59 pm on September 14, 2005,
and trading may resume on Thursday, September 15. Furthermore, The Depository
Trust Company (“DTCC”) issued a special alert regarding BCIT on August 16, which
included a notice that DTCC had discontinued all services relating to BCIT, other than
custody services, as of August 11.1 Based on these releases and other information
released by the company, member organizations should consider the following with
regard to BCIT shares:
1) Physical share certificates deposited by a customer should be scrutinized for
authenticity. In addition, at a minimum, the shares should be checked against the
outstanding shares recognized by the transfer agent. Firms are reminded of their
obligation to "know your customer" under NYSE Rules and to obtain and verify
customer information under Section 326 of the USA PATRIOT Act.
2) Any transactions should be undertaken with the knowledge that settlement is
uncertain given that NSCC will not net obligations through the CNS system and that all
trades will need to be settled broker-to-broker.
3) Any sales should be effected only to the extent the member organization is confident
that delivery can be made.
4) Member organizations are reminded of their responsibilities to comply with the sales
practices requirements applicable to “penny stocks” under Securities Exchange Act
Rules 15g-1 thru 15g-9, and with the requirements of Securities Exchange Act Rule
15c2-11.
1 See The Depository Trust Company, B #8418 dated August 16, 2005.
2
Additionally, the New York Stock Exchange has confirmed the position of the Securities
and Exchange Commission staff relative to the application of SEA Rule 15c3-3(m)
Completion of Sell Orders on Behalf of Customers and SEA Rule 15c3-3(d)(2)
Requirement to Reduce Securities to Possession or Control. SEA Rule 15c3-3 requires
member organizations to take prompt steps to buy-in securities to obtain physical
possession or control under paragraph (d)(2) and to complete customer sell orders
under paragraph (m). It is the position of the SEC staff that such buy-in requirements
related to BCIT are temporarily suspended until further notice.
Any questions regarding this Information Memo should be directed to William Wollman
at 212 656-8496 or Rosemarie Fanelli at 212 656-5839.
___________________________
William J. Wollman
Vice President
Member Firm Regulation
Message 23493105 |
