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NYSE Specialist: Its Trade Reports May Have Flaws

From Bloomberg News

LaBranche & Co., the biggest matchmaker for buyers and sellers on the New York Stock Exchange, said it had found “potential significant deficiencies” in its compliance with the Sarbanes-Oxley Act.

New York-based LaBranche said in a filing Wednesday with the Securities and Exchange Commission that possible problems existed in the firm’s reliance on third-party trading reports with some outside vendors. The firm said it implemented independent controls to verify and reconcile the trading reports.

“It’s not a material problem, so it shouldn’t impact earnings,” said Charlotte Chamberlain, an analyst at Jefferies & Co. who rates the stock “underperform” and doesn’t hold the shares. “To the extent it’s a problem, they seem to already be remediating it, and that’s a good thing.”

Congress passed Sarbanes-Oxley in 2002 to tighten financial reporting and police outside auditors after accounting fraud caused the collapse of Enron Corp. and WorldCom Inc.

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LaBranche shares declined 30 cents to $7.29 on the NYSE.


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