What the F?? NASD/firms noncompliance arb
LIKE WE NEED THIS!@#$%%
NASD fines firms for non-compliance
By Luisa Beltran, CBS.MarketWatch.com
Last Update: 11:30 AM ET July 19, 2004
NEW YORK (CBS.MW) - The NASD fined Citigroup Global Markets, Merrill Lynch and Morgan Stanley a total of $750,000 for failing to produce documents in 20 arbitration cases.
From 2002 to 2004, the three firms failed to comply with discovery orders from arbitration panels, including the NASD dispute resolution. Citi was party to six arbitrations, while Merrill and Morgan each had seven cases, during the time period.
The former Salomon Smith Barney, Merrill and Morgan Stanley did not produce documents to claimants even after the panels ordered them to hand over the documents, the NASD said
Some of the firms even believed that noncompliance with the discovery process was a "routine and acceptable part of arbitration strategy," the NASD said Monday.
Failure to provide documents violated the NASD's rule for just and equitable principles of trade. The NASD fined Citi (C: news, chart, profile), Merrill (MER: news, chart, profile) and Morgan Stanley (MWD: news, chart, profile) $250,000 each.
"We will not tolerate any failure by NASD-regulated firms to cooperate fully in the arbitration process and we will bring enforcement actions as necessary to assure full compliance with our arbitration code," said Robert Glauber, NASD Chairman.
Citi, Merrill and Morgan Stanley did not admit or deny guilt. However, the firms agreed to establish a written procedure review by management in any instance where an arbitration panel has sanctioned the firm for discovery violations.
Shares of Citigroup gained 63 cents to $44.25, Morgan Stanley added 71 cents to $47.78 and Merrill rose by 41 cents to $49.17 Monday in morning trading.
Pennies not a zero sum game as much as some zero game.
