NASD Regulation Fines Mayer & Schweitzer $200,000 for Failure to Provide Best Execution; As Well As Record-Keeping and Supervisory Violations
Washington, D.C.--NASD Regulation, Inc., today announced that Mayer & Schweitzer, Inc., was fined $200,000 after settling charges that the firm failed to get its customers the best executions possible on five separate occasions from December 1995 through June 1996.
In the settlement, Mayer & Schweitzer neither admitted nor denied allegations that it failed to provide the best execution possible because it did not transmit member-to-member customer limit orders for securities the firm did not make a market in to another market maker that could have filled the orders. While Mayer & Schweitzer intended to forward the orders, its faulty procedures prevented them from being transmitted.
A customer limit order, whether originating from a public customer or another market maker on behalf of a customer, is an order to buy or sell a stock at a price specified by the customer. NASD Regulation’s best execution rule requires that brokerage firms make every effort possible to obtain the most favorable price available for every security purchased or sold on behalf of a customer.
These violations were investigated by NASD Regulation’s Market Regulation Department, and were based on the receipt of five separate customer complaints.
NASD Regulation also found that the firm failed to establish, maintain, and enforce written supervisory procedures to prevent these violations. Additionally, NASD Regulation found that Mayer & Schweitzer failed to maintain records of the time and manner in which the firm sent customer limit orders to other market makers for execution.
Previously, on March 20, 1996, Mayer & Schweitzer entered into a separate settlement, without admitting or denying allegations of best execution and record-keeping violations. The firm was fined $75,000 as a result.
Based in Jersey City, NJ, Mayer & Schweitzer is a brokerage firm that currently employs approximately 193 registered representatives, in offices in Jersey City and Piscataway, NJ; Dania, FL, Chicago, IL; and Denver, CO.
NASD Regulation oversees all U.S. stockbrokers and brokerage firms. NASD Regulation, along with The Nasdaq Stock Market, Inc., are subsidiaries of the National Association of Securities Dealers, Inc. (NASDÒ), the largest securities-industry self-regulatory organization in the United States.
Investors who have questions should contact NASD Regulation at (301) 590-6500.