NASD Fines Merrill for Violations
Nov. 22, 2000
NEW YORK (AP) _ The National Association of Securities Dealers has fined Merrill Lynch $97,000 and censured the brokerage firm for violations of trading and order handling rules.
The violations, from November 1997 to December 1999, consisted of occasional breaches of rules on best execution, short sales, locked and crossed markets and trade reporting, according to NASD Regulation Inc., the enforcement arm of the industry's self-regulatory association.
For example, Merrill Lynch failed in 70 instances to follow rules requiring brokers to execute customer orders at prices as favorable as possible under market conditions. In 41 cases, the broker did not comply with rules requiring that when customers place limit orders, the prices of those orders must be posted immediately.
``These were unintentional errors that involved a very small fraction of the transactions that we executed,'' said Merrill Lynch spokesman Joseph Cohen. ``We have taken steps to address them and continually work to comply with NASD regulations.''
Merrill Lynch neither admitted nor denied NASD's findings. The company has chosen on its own to provide restitution to customers affected by the 70 best execution violations, said Steve Luparello, NASDR's executive vice president for market regulation.