NASD Suspends Broker for 90 Days, Imposes Fine and Disgorgement Totaling $400,000 for Short Sale Violations
Washington, D.C.—NASD announced today that Steven W. Norin, a broker who is currently registered with Citigroup Global Markets Inc. of New York, has been suspended for 90 days and will pay $400,000 to settle charges that he engaged in a pattern of improper short sales in his personal accounts.
NASD found that from March 2003 through November 2004, Norin executed 100 short sales in 22 different securities and improperly marked them as "long." NASD found that Norin wanted to sell certain securities in his personal accounts short because he believed they were overpriced; when he discovered that there was no available inventory or borrowable stock, he improperly marked the orders long in the firm's order entry system to defeat the system's ability to prevent improper short sales.
NASD determined that in 70 of the improper short sales, Norin made profits totaling $298,547. In the other 30 sales Norin lost money, for a net loss of $2,788 over the course of the 20-month period of misconduct. NASD is requiring Norin to disgorge the profits he derived from the profitable improper short sales and to pay, in addition, a fine of over $100,000.
In settling this matter, Norin neither admitted or denied the charges, but consented to the entry of NASD's findings that in the 100 instances he improperly marked short sales long, he failed to determine affirmatively that there was stock available to fill the orders, caused his firm to fail to report the transactions to the Nasdaq Market Center with the required short sale modifier, and intentionally circumvented the locate requirements of his firm's trading systems to avoid detection.
Investors can obtain more information about, and the disciplinary record of, any NASD-registered broker or brokerage firm by using NASD's BrokerCheck. NASD makes BrokerCheck available at no charge to the public. In 2005, members of the public used this service to conduct more than 4.3 million searches for existing brokers or firms and requested more than 194,000 reports in cases where disclosable information existed on a broker or firm. Investors can link directly to BrokerCheck at www.nasdbrokercheck.com. Investors can also access this service by calling 1-800-289-9999.
NASD is the leading private-sector provider of financial regulatory services, dedicated to investor protection and market integrity through effective and efficient regulation and complementary compliance and technology-based services. NASD touches virtually every aspect of the securities business - from registering and educating all industry participants, to examining securities firms, enforcing both NASD rules and the federal securities laws, and administering the largest dispute resolution forum for investors and registered firms. For more information, please visit our Web Site at www.nasd.com.