Piper fined over naked short sales
Last update: July 11, 2007 – 7:58 PM
Piper Jaffray Companies, the Minneapolis-based investment firm, was fined $150,000 in the New York Stock Exchange's seventh enforcement action involving short sales since new rules took effect in 2005.
The firm agreed to the fine without admitting or denying wrongdoing in the case, an NYSE disciplinary panel said on the exchange's website. Rob Litt, a spokesman for the company, said the firm had no comment.
The NYSE has levied at least $1.9 million in fines tied to so-called naked short sales, or bets that a stock will decline that are placed without properly arranging to buy the underlying securities.
Daiwa Securities Group Inc. and J.P. Morgan Chase & Co. were each fined $400,000 last year for violations of the regulations, which require brokerages to track sales of borrowed shares.
Piper Jaffray failed to comply with the rules from Jan. 3, 2005, to May 31, 2005, the NYSE said. The firm sold borrowed shares during the period without locating replacements, and in other cases failed to cover short sales in a timely manner, the NYSE said.
Piper has since updated its systems to prevent similar violations, the exchange said.
Shares of Piper Jaffray fell $1.08 to close at $53.92.
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