Amex Fines and Suspends Member for Authorizing Discretionary Trading by an NYSE Floor Broker
New York, NY—The American Stock Exchange® today announced that it has censured, fined $160,000 and suspended Michael H. Schwartz from membership in the Exchange for one year for his role in conduct that occurred on the floor of the New York Stock Exchange by an NYSE Floor Broker. The Exchange determined that Schwartz violated the just and equitable principles of trade provision of the Amex’s Constitution.
The Exchange’s action resulted from an investigation that revealed that in early 1996 Schwartz authorized an NYSE Floor Broker, Steven Blandi, to initiate and execute trades, for Schwartz’s accounts, on the floor of the NYSE, and agreed to share the trading profits with Blandi. In its decision, the Amex Disciplinary Panel indicated that Schwartz knew or should have known that this conduct violated NYSE rules.
From January 1996 through February 1998, Blandi, exercising trading discretion, executed numerous transactions in NYSE stocks on the NYSE floor for Schwartz’s accounts. Blandi’s discretionary trading netted $200,000 in profits of which Schwartz and Blandi each took a 45 percent share. The remaining 10 percent was paid to the wire clerk on the floor of the NYSE who processed Blandi’s trades for Schwartz’s accounts.
Schwartz agreed to settle the matter without admitting or denying the Amex’s charges.
The Nasdaq-Amex Market GroupSM, which operates The Nasdaq Stock Market® and the American Stock Exchange®, is a subsidiary of the National Association of Securities Dealers, Inc. (NASD®), the largest securities-industry, self-regulatory organization in the United States.