Amex Permanently Bars Floor Booth Clerk for Improper Trading, Falsifying Clearing Records, and Making False Statements
Amy E. Hyland
New York, NY – The American Stock Exchange® (Amex®) today announced that it has censured and permanently barred Hal S. Herman, a non-registered floor booth clerk, from association with the Exchange or any of its members or member firms. Herman, formerly employed by Israel A. Englander & Co., was found guilty of engaging in improper trading and submitting false information into the trade clearance process. He was also found guilty of making false statements to securities regulators on registration and transfer documents, and making a misstatement in testimony before the Amex.
The Amex’s action resulted from an investigation which revealed that in February 1996, Herman violated Exchange rules by entering options orders for the account of one of Englander’s customers without having received bona fide orders from the customer. As a floor booth clerk, Herman was not permitted to enter orders for trade execution without first receiving an order from a customer. In addition, Herman knowingly entered false transactional information into the trade clearance process.
The Exchange also found that in 1997, Herman made false statements on his Uniform Application for Securities Industry Registration, "Form U-4" (the official securities registration and transfer document), when he sought NASD registration through a new employer, Metropolitan Life. In addition, Herman made false statements on a subsequent amended Form U-4, relating to the existence of an ongoing regulatory investigation by the Amex, and a "for cause" employment termination from Israel Englander & Co. Both facts are required to be disclosed on the Form U-4, when an applicant seeks registration in the securities industry. Finally, Herman was found guilty of making a false statement to Amex officials during a deposition regarding his involvement in an uncleared trade.
Herman has appealed the Amex disciplinary decision to the Securities and Exchange Commission. Israel A. Englander & Co. was not found to have been involved in any wrongdoing.
The American Stock Exchange, a subsidiary of the National Association of Securities Dealers, Inc. (NASD®), is the only primary exchange that offers trading across a full range of equities, Index SharesSM, including structured products, and options. In addition to its role as a national equities market, the Amex is the leader in Index Share listings (SPDRs®, Select Sector SPDRs®, DIAMONDS®, MidCap SPDRs™, WEBS™, and Nasdaq-100 Index Tracking StockSM) and is the second-largest options exchange in the U.S., trading options on broad-based and sector indexes as well as domestic and foreign stocks. For more information visit www.amex.com.