HRZG - part 1
MEMBER FIRM: HERZOG, HEINE, GEDULD, INC.
BD NUMBER: 2186
NASD Member Firm: HERZOG, HEINE, GEDULD, INC.
BD Number: 2186
12/15/98 SUMMARY INFORMATION
12/15/98: 11/04/98 NASD ARBITRATION
SUBJECT OF AN NASD ARBITRATION. THE ARBITRATION INVOLVED A PUBLIC CUSTOMER
AND WAS FILED BECAUSE OF THE FOLLOWING DISPUTE(S): ACCOUNT RELATED-BREACH OF
CONTRACT; EXECUTIONS-FAILURE TO EXECUTE; BRCH OF FIDUCIARY DT; OTHER. THE
AWARD INCLUDED: ACTUAL/COMPENSATORY DAMAGES, AMOUNT ASKED BY
CUSTOMER-$24,000.00; PUNITIVE/EXEMPLARY DAMAGES, AMOUNT ASKED BY
CUSTOMER-$0.00; OTHER COSTS, AMOUNT ASKED BY CUSTOMER-$0.00; INTEREST, AMOUNT
ASKED BY CUSTOMER-$0.00; OTHER MONETARY RELIEF, AMOUNT ASKED BY
CUSTOMER-$0.00; REGULAR INJUNCTIVE RELIEF, AMOUNT ASKED BY CUSTOMER-. RELIEF
REQUESTS HAVE BEEN DENIED IN FULL. [NASD ARBITRATION CASE NO. 97-05316]
12/15/98: 7/20/98 NASD CENSURE AND FINE
ACCEPTANCE, WAIVER AND CONSENT; HERZOG, HEINE, GEDULD, INC. WAS CENSURED AND
FINED $10,000 BY THE NASD, AND AGREED TO AN UNDERTAKING TO REVISE THE FIRM'S
WRITTEN SUPERVISORY PROCEDURES RELATING TO FIRM QUOTE COMPLIANCE IN A MANNER
NOT UNACCEPTABLE TO THE STAFF. THE REVISED PROCEDURES SHOULD BE SUBMITTED
WITHIN 60 CALENDAR DAYS OF THE ACCEPTANCE OF THIS AWC BY THE NAC. THE NASD
ALLEGED THAT THE FOLLOWING VIOLATIONS OCCURRED: FIRM FAILED TO EXECUTE 85
PREFERENCED SELECTNET ORDERS WHICH WERE PRESENTED TO THE FIRM AT THE FIRM'S
PUBLISHED BID OR PUBLISHED OFFER IN AN AMOUNT EQUAL TO OR LESS THAN ITS
PUBLISHED QUOTATION SIZE, AND, THEREFORE, FAILED TO HONOR ITS PUBLISHED
QUOTATION. THIS CONDUCT CONSTITUTES SEPARATE AND DISTINCT VIOLATIONS OF SEC
RULE 11Ac1-1, NASD CONDUCT RULE 3320 AND NASD MARKETPLACE RULE 4613(b). [NASD
COMPLAINT NO. CMS980064 AWC]hk
12/15/98: 1/30/98 NASD FINE
ACCEPTANCE, WAIVER AND CONSENT; HERZOG, HEINE, GEDULD, INC. WAS FINED
$2,200.OO BY THE NASD. THE NASD ALLEGED THAT THE FIRM VIOLATED NASD
MARKETPLACE RULE 6130 FOR EXECUTING 11 SHORT SALE TRANSACTIONS WITHOUT
IDENTIFYING THE TRANSACTIONS AS SHORT SALE IN ITS REPORTING TO THE AUTOMATED
1
CONFIRMATION TRANSACTION SERVICE.***$2,200 PAID ON 4/10/98, INVOICE NO.
98-MS-306***[NASD COMPLAINT NO. CMS970077 AWC] jm
12/15/98: 8/11/97 NASD CENSURE AND FINE
ACCEPTANCE, WAIVER AND CONSENT; HERZOG, HEINE, GEDULD, INC. WAS CENSURED AND
FINED $11,000.00 BY THE NASD. THE NASD ALLEGED THAT THE FIRM VIOLATED NASD
CONDUCT RULES 2110, IM-2110-2, 3010 AND MARKETPLACE RULE 6130(d) FOR THE
FOLLOWING ACTIVITY: THE FIRM FAILED TO CONTEMPORANEOUSLY EXECUTE THREE
CUSTOMER LIMIT ORDERS; IMPROPERLY REPORTED 48 TRANSACTIONS THROUGH THE
AUTOMATED CONFIRMATION TRANSACTION SERVICE (ACT); AND FAILED TO ESTABLISH,
MAINTAIN AND ENFORCE WRITTEN SUPERVISORY PROCEDURES WITH RESPECT TO ITS LIMIT
ORDER ACTIVITY.***$11,000.00 PAID ON 10/31/97, INVOICE NO. 97-MS- 794***[NASD
COMPLAINT NO. CMS960214(A) AWC]hk
12/15/98: 7/25/97 NASD ARBITRATION
SUBJECT OF AN NASD ARBITRATION. THE ARBITRATION INVOLVED A PUBLIC CUSTOMER
AND WAS FILED BECAUSE OF THE FOLLOWING DISPUTE(S): UNAUTHORIZED TRADING;
ACCOUNT RELATED-MARGIN CALLS; OTHER. THE AWARD INCLUDED: ACTUAL/COMPENSATORY
DAMAGES, AMOUNT ASKED BY CUSTOMER-$1,062.50; PUNITIVE/EXEMPLARY DAMAGES,
AMOUNT ASKED BY CUSTOMER-$1,250.00; OTHER COSTS, AMOUNT ASKED BY
CUSTOMER-$42.53; ATTORNEY'S FEES, AMOUNT ASKED BY CUSTOMER-$1,196.00. RELIEF
REQUESTS HAVE BEEN DENIED IN FULL. [NASD ARBITRATION CASE NO. 97-03104]
12/15/98: 7/11/97 NASD FINE
ACCEPTANCE, WAIVER AND CONSENT; HERZOG, HEINE, GEDULD, INC. WAS FINED
$2,500.00 BY THE NASD. THE NASD ALLEGED THAT HERZOG, HEINE, GEDULD, INC
VIOLATED CONDUCT RULE 2110 FOR CANCELLING SIX CUSTOMERS TRANSACTIONS WHICH HAD
BEEN EXECUTED THROUGH ITS AUTOMATED EXECUTION SERVICE ("AUTO-EX") BECAUSE OF
ITS MISTAKEN BELIEF THAT THE TRANSACTION HAS BEEN ERRONEOUSLY
EXECUTED***$2,500.00 PAID ON 8/22/97, INVOICE #97-MS-692***[NASD DOCKET/CASE
NO. CMS 970002(A) AWC]
12/15/98: 6/10/97 NASD FINE
ACCEPTANCE, WAIVER AND CONSENT; HERZOG, HEINE, GEDULD, INC. WAS FINED
$5,000.00 WITH A REQUIREMENT TO SCHEDULE A COMPLIANCE CONFERENCE WITH NASD
REGULATION. THE NASD ALLEGES THAT THE FIRM VIOLATED MARKETPLACE RULE 4613(d)
FOR ENTERING QUOTATIONS INTO THE NASDAQ SYSTEM THAT EXCEEDED THE PARAMETERS
2
FOR MAXIMUM ALLOWABLE SPREADS IN FIVE SECURITIES ON FIVE DAYS. ***$5,000.00
PAID ON 7/28/97, INVOICE #97-MS-540***[NASD COMPLAINT NO. CMS 960050 AWC]
12/15/98: 4/23/97 NASD FINE
ACCEPTANCE, WAIVER AND CONSENT; HERZOG, HEINE, GEDULD, INC WAS FINED
$15,000.00 BY THE NASD. THE NASD ALLEGED THAT THE FIRM ENTERED QUOTATIONS IN
NASDAQ NATIONAL MARKET SYSTEM SECURITIES THAT EXCEEDED THE PARAMETERS FOR
MAXIMUM ALLOWABLE SPREADS.***$15,000.00 PAID ON 6/11/97, INVOICE
#97-MS-421***[NASD COMPLAINT NO. CMS960186 AWC]hk
12/15/98: 4/23/97 NASD FINE
ACCEPTANCE, WAIVER AND CONSENT; HERZOG, HEINE, GEDULD, INC. WAS FINED
$8,000.00 BY THE NASD. THE NASD ALLEGED THAT THE FIRM VIOLATED MARKETPLACE
RULE 4613(e) FOR ENTERING OR MAINTAINING QUOTATIONS IN THE NASDAQ STOCK
MARKET, DURING NORMAL BUSINESS HOURS, WHICH CAUSED A LOCKED AND/OR CROSSED
MARKET CONDITION TO OCCUR IN FIVE SECURITIES.***$8,000 PAID ON 6/11/97,
INVOICE #97-MS-436***[NASD COMPLAINT NO. CMS 960205AWC]
12/15/98: 2/21/97 NASD ARBITRATION
SUBJECT OF AN NASD ARBITRATION. THE ARBITRATION INVOLVED A PUBLIC CUSTOMER
AND WAS FILED BECAUSE OF THE FOLLOWING DISPUTE(S): UNAUTHORIZED TRADING;
MISREPRESENTATION; OMISSION OF FACTS; OTHER. THE AWARD INCLUDED:
ACTUAL/COMPENSATORY DAMAGES, AMOUNT ASKED BY CUSTOMER-$8,550.00;
PUNITIVE/EXEMPLARY DAMAGES, AMOUNT ASKED BY CUSTOMER-$75,000.00; OTHER COSTS,
AMOUNT ASKED BY CUSTOMER-$5,650.00; INTEREST, AMOUNT ASKED BY CUSTOMER-$0.00.
RELIEF REQUESTS HAVE BEEN DENIED IN FULL. [NASD ARBITRATION CASE NO.
96-03496]
12/15/98: 1/27/97 NASD FINE
ACCEPTANCE, WAIVER AND CONSENT; HERZOG, HEINE, GEDULD, INC. WAS FINED
$1,000.00 BY THE NASD. THE NASD ALLEGES THAT THE FIRM VIOLATED CONDUCT RULE
2110 AND IM-2110-2 FOR FAILING TO PROTECT A 300 SHARE LIMIT ORDER AT THE TIME
IT WAS OBLIGATED TO DO SO.***$1,000.00 PAID ON 3/27/97, INVOICE
#97-MS-130***[NASD COMPLAINT NO. CMS960121 AWC]hk
12/15/98: 7/15/96 NASD FINE
3
ACCEPTANCE, WAIVER AND CONSENT; HERZOG, HEINE, GEDULD, INC. WAS FINED $6,000
BY THE NASD. THE NASD ALLEGED PART V, SECTION 2(d) OF SCHEDULE D TO THE
ASSOCIATION'S BY-LAWS IN THAT ON NUMEROUS OCCASIONS, FIRM ENTERED QUOTATIONS
INTO THE NASDAQ SYSTEM THAT EXCEEDED THE PARAMETERS FOR THE MAXIMUM ALLOWABLE
SPREADS.*** $6,000.00 FULLY PAID AS OF 9/10/96, INVOICE #96-MS-592***[NASD
COMPLAINT NO. CMS960037]hk
12/15/98: 6/04/96 NASD ARBITRATION
SUBJECT OF AN NASD ARBITRATION AWARD. THE ARBITRATION INVOLVED A PUBLIC
CUSTOMER AND WAS FILED BECAUSE OF THE FOLLOWING DISPUTE(S):
EXECUTIONS-EXECUTION PRICE; EXECUTIONS-FAILURE TO EXECUTE. THE AWARD
INCLUDED: ACTUAL/COMPENSATORY DAMAGES, AMOUNT ASKED BY CUSTOMER-$9,375.00,
AMOUNT AWARDED TO CUSTOMER-$9,375.00 JOINTLY AND SEVERALLY; OTHER MONETARY
RELIEF, AMOUNT ASKED BY CUSTOMER-$150.00, AMOUNT AWARDED TO CUSTOMER-$150.00
JOINTLY AND SEVERALLY; OTHER MONETARY RELIEF, AMOUNT ASKED BY CUSTOMER-$0.00,
AMOUNT AWARDED TO CUSTOMER-$0.00 JOINTLY AND SEVERALLY. [NASD ARBITRATION
CASE NO. 96-02289]
12/15/98: 3/15/96 NASD FINE
ACCEPTANCE, WAIVER AND CONSENT; FINED $6,500.00 BY THE NASD. THE NASD ALLEGED
VIOLATIONS OF PART V, SECTION 2(D) OF SCHEDULE TO THE ASSOCIATION'S BY-LAWS IN
THAT THE FIRM ENTERED QUOTATIONS INTO THE NASDAQ SYSTEM THAT EXCEEDED THE
PARAMETERS FOR MAXIMUM ALLOWABLE SPREADS.***$6,500.00 PAID ON 4/16/96, INVOICE
#96-MS-245***[NASD COMPLAINT NO. CMS950123]hk
12/15/98: 9/25/95 NASD FINE
ACCEPTANCE, WAIVER AND CONSENT; HERZOG, HEINE, GEDULD, INC. WAS FINED
$1,000.00 BY THE NASD. THE NASD ALLEGED VIOLATIONS OF RULE 11AC1-1C OF THE
SECURITIES EXCHANGE ACT OF 1934, PART V, SECTION 2B OF SCHEDULE D OF THE
ASSOCIATION'S BY-LAWS AND ARTICLE III, SECTIONS 1 AND 6 OF THE ASSOCIATION'S
RULES OF FAIR PRACTICE BY FAILING TO HONOR THE QUOTATIONS IT CAUSED TO BE
DISSEMINATED THROUGH THE NASDAQ SYSTEM (BACKING AWAY).***$1,000.00 PAID ON
10/19/95 INVOICE #95-MS-661***[NASD COMPLAINT NO. CMS950048]
12/15/98: 6/02/95 NASD FINE
ACCEPTANCE, WAIVER AND CONSENT; FINED $2,000.00 FOR VIOLATIONS OF PART 5,
SECTION 2(b) OF SCHEDULE D TO THE ASSOCIATION'S BY-LAWS, AND RULE 11Ac1-1(c)
4
OF THE SECURITIES ACT OF 1934 IN THAT THE FIRM FAILED TO HONOR THE QUOTATIONS
IT CAUSED TO BE DISSEMINATED THROUGH THE NASDAQ SYSTEM.***$2,000.00 PAID ON
7/18/95, INVOICE #95-MS.409***[NASD COMPLAINT NO. CMS940115]hk
12/15/98: 4/19/94 NASD FINE
ACCEPTANCE, WAIVER AND CONSENT; HERZOG, HEINE, GEDULD, INC. WAS FINED $750.00
BY THE NASD. THE NASD ALLEGE VIOLATIONS OF ARTICLE III, SECTION 1 OF THE RULES
OF FAIR PRACTICE IN THAT HERZOG UPDATED QUOTATIONS IN THE BULLETIN BOARD
SYSTEM OUTSIDE THE ALLOWABLE TIME FOR UPDATING FOREIGN OR ADR SECURITIES ON
THE BULLETIN BOARD.***$750 PAID ON 5/10/94, INVOICE #94-MS-313*** [NASD
COMPLAINT NO. CMS940003]hk
12/15/98: 3/09/94 NASD FINE
ACCEPTANCE, WAIVER AND CONSENT; FINED $4,000 FOR VIOLATIONS OF PART V, SECTION
2(d) OF SCHEDULE C FOR ENTERING NASDAQ QUOTATIONS CONCERNING EXCESS SPREADS.
[NASD COMPLAINT NO. CMS930082-AWC]
12/15/98: 1/10/94 NASD ARBITRATION
SUBJECT OF AN NASD ARBITRATION. THE ARBITRATION INVOLVED A PUBLIC CUSTOMER
AND WAS FILED BECAUSE OF THE FOLLOWING DISPUTE(S): MISREPRESENTATION. THE
AWARD INCLUDED: ACTUAL/COMPENSATORY DAMAGES, AMOUNT ASKED BY
CUSTOMER-$93,800.00; ACTUAL/COMPENSATORY DAMAGES, AMOUNT ASKED BY
CUSTOMER-$60,000.00. RELIEF REQUESTS HAVE BEEN DENIED IN FULL. [NASD
ARBITRATION CASE NO. 91-01315]
12/15/98: 12/17/93 NASD FINE
ACCEPTANCE, WAIVER AND CONSENT; FINED $3,000 BY THE NASD FOR VIOLATIONS OF
PART VI, SECTION 2(d) OF SCHEDULE D FOR ENTERING NASDAQ QUOTATIONS CONTAINING
EXCESS SPREADS.***$3,000.00 PAID ON 1/27/94 INVOICE #94-MS-24*** [NASD
COMPLAINT NO. CMS930060]hk
12/15/98: 8/26/93 NASD FINE
ACCEPTANCE, WAIVER AND CONSENT; HERZOG, HEINE, GEDULD, INC. WAS FINED $500.00
BY THE NASD. THE NASD ALLEGES VIOLATIONS OF ARTICLE III, SECTION 1 OF THE
5
RULES OF FAIR PRACTICE IN THAT THE FIRM UPDATED QUOTATIONS IN THE BULLETIN
BOARD SYSTEM OUTSIDE THE ALLOWABLE TIME FOR UPDATING FOREIGN OR ADR SECURITIES
ON THE BULLETIN BOARD.***$500.00 PAID ON 9/14/93 INVOICE #93-MS- 677***[NASD
COMPLAINT NO. CMS930025 AWC]hk |
