Market Makers in Settlement With SEC
The Securities and Exchange Commission on Monday said it reached a $5.2-million settlement with SIG Specialists Inc. and Performance Specialist Group, two market makers on the New York Stock Exchange.
The firms settled SEC allegations that they traded ahead of customers between 1999 and 2003, the agency said. The accord, the result of a joint probe by the SEC and the New York Stock Exchange, follows the SEC’s $242-million settlement in March with the five largest market makers, including LaBranche & Co. and Van der Moolen Specialists.
The SEC is still examining the behavior of individual NYSE specialists and may bring lawsuits against individuals, said David Rosenfeld, an assistant regional director in the SEC’s Northeastern office. The two companies agreed to the settlement without admitting or denying the allegations.
The settlement also requires the firms to create committees to evaluate compliance with trading rules and to annually certify that their chief compliance officer has reviewed trading in the firm’s account to detect improper trades.
Most of the violations at SIG Specialists occurred in two units the firm acquired during the last five years, according to Todd Silverberg, SIG’s general counsel. Many of the people involved joined the firm as part of the acquisitions and no longer work there, Silverberg said.
A call to New York-based Performance Specialists seeking comment wasn’t returned.
SIG Specialists, a unit of Susquehanna International Group in Bala Cynwyd, Pa., and Performance Specialists act as market makers for stocks accounting for less than 5% of the share volume traded on the exchange.
