Linda Riefberg is currently a vice president in the Enforcement Department of the Financial Industry Regulatory Authority, known as FINRA, which was created through the consolidation of NASD (National Association of Securities Dealers) and the member regulation, enforcement, and arbitration functions of the New York Stock Exchange (NYSE). Linda originally joined the NYSE in 1993 as a staff attorney, where she was involved in a variety of investigations and disciplinary actions, focusing on fraud, improper market timing, insider trading, market manipulation, e-mail retention, sales practice misconduct, and financial and operational deficiencies at member organisations. In 1998, Linda became an enforcement director, responsible for supervising a team of lawyers conducting investigations and prosecutions of wide-ranging violations of the federal securities laws and NYSE Rules. During 2002-3, Linda had primary responsibility for coordinating the NYSE's role in the investigation and global settlement of the research analyst conflicts of interest matter. She became a managing director of the NYSE in 2004 and was promoted to vice president in January 2006. She has spoken on panels sponsored by the American Conference Institute, the Child Health Corporation of America, the Securities Industry and Financial Markets Association (SIFMA), the Securities and Exchange Commission (SEC) and NYSE Regulation. A 1984 graduate of New York University School of Law and a Phi Beta Kappa graduate of Binghamton University in 1981, Linda was previously an associate at Stroock and Stroock and Lavan, where she was engaged in general commercial litigation, securities class actions and products liability matters.

ABSTRACT

In an effort to protect investors from receiving and relying upon research that is improperly influenced by undisclosed conflicts of interest, the industry has been restructured to eliminate the influence of investment banking considerations on research analysts by, among other things, limiting analyst participation in roadshows, chaperoning contacts between research analysts and investment banking personnel, and prohibiting the compensation of research analysts based on investment banking services. Securities regulators have continued to focus on eliminating or neutralising the impact of conflicts of interest on research analysts or departments by ensuring compliance with new research rules, including enhanced disclosure requirements on published research, and the monitoring of investment banking and research activities in order to ensure the required independence. Self-regulatory organisation (SRO) enforcement actions or Securities and Exchange Commission (SEC) proceedings have primarily concentrated on three areas. First, there is a potential impact on published research and/or influence on a research analyst created by the coexistence of a firm's research department with other firm functions, such as investment banking or trading. Secondly, there is the potential effect that research analysts may have on trading decisions through their selective dissemination of material, non-public information about a company or security. Specifically, an unfair playing field might result if trading can be influenced by advance knowledge of either coverage issues, such as ratings or recommendation changes, or information about the company itself, such as earnings or product testing results. Thirdly, there is a potential taint on research resulting from the analyst's ownership and trading of a covered stock. This paper focuses on some of the recent research cases and rule developments, and offers best practice advice to help the firms who distribute research to comply with the new regulatory environment.

KEYWORDS: research, analyst, disclosure, conflicts of interest, selective dissemination

INTRODUCTION

In an effort to protect investors from receiving and relying upon research that is improperly influenced by undisclosed conflicts of interest, the regulatory spotlight has continued to shine on research analysts and research departments in the post-global settlement era. Following the settlement of a series of actions brought in 2003 and 2004¹  by the Securities and Exchange Commission (SEC), the National Association of Securities Dealers Inc. (NASD), the New York Stock Exchange (NYSE) and various state regulatory agencies, including the New York Attorney General's office, 12 broker-dealers were required to pay over US$1.5bn in penalties and disgorgement, to provide independent research to firm customers, and to restructure their research and investment banking departments to separate these two functions.²  The purpose of that restructuring was to eliminate the influence of investment banking considerations on the research analysts by, among other things, limiting analyst participation in roadshows, chaperoning contacts between research analysts and investment banking personnel, and prohibiting the compensation of research analysts based on investment banking services. Many, although not all, of the key components of that separation were thereafter codified in the rules of the NYSE and NASD, so that they became applicable throughout the industry.³  The NYSE and NASD continue to recommend amendments to clarify these rules.⁴

In the years since the global settlement, industry regulators have continued to focus on eliminating or neutralising the impact of conflicts of interest on research analysts or departments by ensuring compliance with the new research rules, including enhanced disclosure requirements on published research, and the monitoring of investment banking and research activities in order to ensure the required independence.⁵  Self-regulatory organisation (SRO) enforcement actions or SEC proceedings have primarily concentrated on three areas:

• First, there is a potential impact on published research and/or influence on a research analyst created by the coexistence of a firm's research department with other firm functions, such as investment banking or trading.
• Secondly, there is the potential effect that research analysts may have on trading decisions through their selective dissemination of material, nonpublic information about a company or security. Specifically, an unfair playing field might result if trading can be influenced by advance knowledge of either coverage issues, such as ratings or recommendation changes, or information about the company itself, such as earnings or product testing results.
• Thirdly, there is a potential taint on research resulting from the analyst's ownership and trading of a covered stock.

INFLUENCE ON THE RESEARCH ANALYST: CONFLICT AND DISCLOSURE CASES

The integrity of research is diminished when a research analyst's rating, recommendation or opinion about a security is influenced by the business concerns of his or her firm. This was made clear in the series of actions that formed the basis of the global settlement. Several cases during 2007 have reinforced the need for the independence of research originating in the investment banking and trading departments of a firm.

The inappropriate influence of investment banking and trading interests was the subject of the recent SEC proceeding against Bank of America.⁶  In that matter, the SEC imposed a penalty and disgorgement of US$26m for violations of s. 15 of the US Securities Exchange Act of 1934 (the ‘Exchange Act') that occurred between January 1999 and December 2001. Conflicts of interest arose at the firm when sales and trading employees were given information about forthcoming research changes, including upgrades and downgrades, before that information was released to the public. The firm also failed to provide clear or effective policies and procedures concerning the handling or control of such information. As a result, in at least two instances, the firm traded in a covered stock shortly before research reports were issued that impacted the price of that stock. The firm also failed to address conflicts of interest that compromised the independence and integrity of its analysts, resulting in the publication of certain materially false and misleading research reports.

Another case, brought by state regulators, related to investment banking and research conflicts of interest, and involved facts that predated the global settlement: Wachovia Capital Markets LLC. The case settled in July 2006 for US$25m. Wachovia was found to have factored into its research coverage decisions on whether companies were potential banking clients.

An example of inappropriate conduct that might develop by virtue of overlapping interests between investment banking and research is illustrated in Bear Stearns & Co. Inc..⁷  The facts arose during the exact same time period in which Bear Stearns and other firms were negotiating, but had not yet finalised, the global settlement. Nonetheless, Bear Stearns permitted a research analyst to appear on an Internet roadshow relating to a public offering for which the firm was lead underwriter. The analyst's comments on the Internet roadshow, which were made available to customers and potential investors through the firm's website before the public offering, did not present fair and balanced information regarding the potential risks and rewards of an investment in the offering. The sanction against the firm was US$1.5m, which included penalties for other non-research findings.

When the firm covering a security has investment banking or ownership interest in that same security, a useful mechanism for addressing those conflicts of interest is through disclosures in published research reports.⁸  When such disclosures are made, investors then can exercise their own judgment about the reliability and independence of the research. There have been a number of cases during 2007 that have focused upon firms' lack of diligence in achieving compliance with these conflict of interest rules.

In Deutsche Bank Securities,⁹  the NYSE censured and sanctioned Deutsche Bank US$950,000 for failing to include proper disclosures in its research reports and in public appearances by the analysts, as required by NYSE Rule 472. That matter also involved supervisory failures under NYSE Rule 342, based on the firm's failure properly to maintain and update its databases housing conflict of interest information. Specifically, the firm's manual updating system failed, because necessary changes to the firm's conflict of interest disclosures were required to be made with such frequency that the firm could not keep up with the volume of published reports. This misconduct was further aggravated because the firm was slow to correct the problem, notwithstanding its apparent awareness that disclosures were not up to date, as evidenced by e-mail messages quoted in the decision.

NASD prosecuted three similar cases, announced in July 2006, against Citigroup Global Markets, Credit Suisse Securities LLC and Morgan Stanley & Co. for violations of the NASD's research analyst conflict of interest rules.¹⁰  All three matters were resolved through letters of acceptance, waiver and consent that provided for sanctions of US$350,000, US$225,000 and US$200,000 respectively. In the Citigroup case, the NASD found that the firm had failed to include numerous conflict disclosures required by NASD Rule 2210 in more than 2,500 research reports. Similarly, in the Morgan Stanley matter, the NASD found that the firm had published over 22,000 equity research reports that failed to disclose, in a clear and prominent manner, the percentage of securities to which it would assign a ‘buy', ‘hold/neutral' or ‘sell' rating. The firm also failed to disclose the analyst industry benchmark ratings as required. These failures occurred despite numerous warnings from the NASD about non-compliance. In the Credit Suisse matter, the NASD determined that the firm had regularly published equity research reports that violated NASD price target disclosure rules by using unclear language to describe price target valuation methods. As in the Morgan Stanley case, the firm's failure to publish proper price targets occurred despite two warnings from the NASD over the preceding two-year period.

Other recent conflict of interest cases reinforce the regulators' view of the importance of publishing disclosures about the firms' relationships with covered companies, so that investors can make determinations about the objectivity and independence of recommendations. See, for example:

• Stifel Nicolaus & Co. Inc.,¹¹  in which the NYSE imposed a fine of US$100,000 for, among other things, the firm distributing third-party research to its customers without disclosing any of its conflicts of interest with the covered companies, and committing additional violations concerning the placement and omission of certain required conflict disclosures;
• First Albany Capital Inc.,¹²  in which the NYSE imposed a fine of US$100,000 based on the firm's failing to implement adequate written policies and procedures regarding research, providing draft research to subject companies and conflict disclosure problems in reports;
• Daiwa Securities America Inc.,¹³  in which the NYSE imposed a fine of US$250,000 for, among other things, the firm's failing to review or approve television or radio appearances and market research letters sent to customers; and
• Berean Capital Inc.,¹⁴  in which the NASD imposed a fine of US$100,000 against the firm and its president for, among other things, failing to include conflicts of interest disclosures in research reports.

In Brean Murray & Co. Inc,¹⁵  the decision emphasised that, in addition to adhering to the conflict of interest disclosure rules, firms are also required to comply with additional conflicts of interest protections: specifically, prohibiting the receipt and/or review by subject companies of draft research reports, except for the limited and express purpose of fact verification. The reports at issue in that case that were provided to the subject companies included summaries, ratings and/or price targets. The imposed fine of $50,000 also included findings relating to the sufficiency of the conflict of interest disclosures in the reports, and the firm's failures to include a final recommendation or rating for a company and a rationale for termination of coverage, as required.

By recognising that firms will continue to produce research about companies in which they also maintain a business interest - whether through investment banking, private investments or trading roles - these conflicts can be properly addressed through the inclusion of disclosures on published research, and by monitoring and maintaining the independence and separation of research from investment banking and trading departments. To the extent that regulators continue to uncover deficiencies in disclosures or breaches in that separation, it is certain that enforcement action will follow.

INFORMATION ABUSES BY ANALYSTS

In addition to enforcing conflict of interest disclosure requirements, regulators also continue to enforce the long-standing protections relating to the confidentiality of information. In relation to research analyst conflicts, regulators focus on preventing analysts from attempting to gain advantage or curry favour by selectively passing along confidential information within the firm or to customers.

In March 2007, the SEC announced that 14 insiders were being charged in a complaint involving trades made illegally on inside information. One of the individuals charged was a research analyst employed by UBS Securities LLC. The research analyst had provided material, non-public information concerning forthcoming upgrades and downgrades to two firm traders.¹⁶

The March 2007 Bank of America settlement, supra, also covers the improper flow of information by a research analyst. The SEC found that this analyst selectively disseminated research to firm traders before it was generally distributed, thereby giving an advantage to those traders who bought or sold short prior to publication. The information in the unpublished research reports was deemed to be material, non-public information and the firm was charged with violating s.15(f) of the Exchange Act.

Preserving the confidentiality of information legitimately obtained by research analysts in the course of performing their research functions is particularly challenging, especially in light of the competitive nature of the research product. Firms and their analysts are often evaluated on their ability to provide value to investors that cannot be obtained elsewhere. But firms and analysts must be especially vigilant to ensure that they do not provide information that is not yet available to the public. The investing public will be better served if analysts distinguish themselves by the depth of their knowledge and understanding of the covered sector, and through incisive and thoughtful analysis.

In Daniel Thomas LeMaitre,¹⁷  a senior research analyst at Merrill Lynch selectively disseminated material information about the results of clinical trials of a medical device. The issuer company had held a closed-door meeting with the press, but the information in that meeting was supposed to be embargoed prior to its public release. The analyst heard reports about what was said at that meeting and selectively disseminated his belief, in e-mails to certain customers, that the information provided during the press briefing was positive, based on the demeanor of the company officials when they were leaving. LeMaitre was charged with circulating rumours in violation of NYSE Rule 345(5), and with engaging in conduct inconsistent with just and equitable principles of trade, in that he obtained material, non-public information concerning a publicly traded security and selectively disseminated that information. The NYSE imposed the sanctions of a two-month bar and a US$50,000 fine.

Another series of cases dealing with selective disclosure arose when Peter Caruso, a research analyst at Merrill Lynch, received approval for a ratings change of Home Depot, a stock that he covered. Prior to the public release of a research report, Caruso disclosed to clients and an institutional salesperson in a luncheon that he was planning to downgrade his rating and/or lower his price target estimates on the stock. He repeated this information later to clients and firm employees on a conference call. An institutional salesperson, Janina Casey, thereafter called three clients and a friend, and provided that information. Prior to the release of the report, firm clients sold several million shares of stock. Caruso and Casey consented to disciplinary actions charging NYSE rule violations relating to their disclosure of material, non-public information to third parties.¹⁸  In addition, the firm was sanctioned US$625,000 for failing to have, and reasonably implement, appropriate procedures of supervision and control in relation to the dissemination of material, non-public information, as it relates to changes in pending research report ratings and/or earnings estimates.¹⁹

In the Walter Piecyk, Jr. case, the NASD reached similar conclusions about how a research analyst is expected to handle the flow of confidential and/or unsubstantiated information.²⁰  Piecyk, while an analyst at Fulcrum Global Partners LLC, was censured and fined US$75,000 for circulating a false and sensational rumour about a covered company. In this instance, the central issue was not whether Piecyk selectively disseminated non-public information, but rather was related to his failure to conduct a reasonable inquiry concerning the basis for the rumour, circulating the misinformation in instant messages and telephone calls to institutional clients.

The UK's Financial Service Authority (FSA) has also reacted to the selective or improper disclosure of information about covered companies. In Roberto Casoni,²¹  a former equities analyst at Citigroup Global Equity Research was fined £52,500 for violating standards of market conduct. Casoni began the approval process to initiate coverage of a stock, but, prior to the publication of his first research report, he selectively disclosed to certain clients the details of his valuation methodology, final recommendation and target price. Additionally, Casoni provided one client with the expected date of publication. This information provided the clients with an opportunity to trade ahead of the release of the research report (although there was no finding that such trading actually occurred). See also Sean Julian Pignatelli,²²  who was fined £20,000 for relaying to certain clients an e-mail message received from a research analyst that conveyed the impression that he had inside information about the stock.

Notably, investigations of analysts' abuse of confidential information will benefit from the increased reliance on e-mail communications among industry participants, because e-mail leaves an evidentiary footprint of the premature release of sensitive information. Several cases under review at NYSE Regulation for selective dissemination of research-acquired information were first discovered during supervisory reviews of such e-mail communications.

ANALYSTS' HOLDINGS IN COVERED COMPANIES

Another means by which to combat improper influence on research has been to ensure that analysts are not deriving a personal benefit from the recommendations or opinions that are published in their research reports. Under NYSE Rule 472 and NASD Rule 2711, research analysts and their household members generally may not trade in the securities they cover for a set period preceding, or following, the issuance of research and, even outside the time guidelines, may not effect trades in a manner that is inconsistent with the analyst's current recommendations. These rules are intended to prevent analysts from profiting from their own recommendations or creating biased research.

The NASD and NYSE have brought several enforcement cases in this area. In Gary Davis,²³  a former Jesup and Lamont research analyst was suspended from the industry for six months, from acting as a research analyst for 18 months and fined US$130,000, based on findings that he sold stocks for which he had published buy, or strong buy, recommendations, traded during the quiet period and failed to disclose his financial interest in the stocks. The fine imposed is largely a disgorgement of the US$117,000 in profits that Davis made through his improper trading. In a related matter, on 23rd February, 2007, the NASD issued a decision of its appellate National Adjudicatory Council, upholding hearing panel findings that Robert Strong, chief compliance officer and supervisory analyst, had failed to supervise Davis' trading, had failed to ensure that required conflict disclosures were included in Davis' published research reports, had failed to ensure the inclusion of price charts and valuation methods in some reports, and had failed to include the required disclosures concerning the firm's role as a market maker in research reports concerning one stock. The hearing panel had imposed a US$15,000 fine and a nine-month suspension; on appeal, the nine-month suspension was eliminated and the fine was reduced to US$10,000.

In Paul Starsia,²⁴  the NYSE entered into a settlement with a former research analyst at Swiss American Securities Inc. who had violated NYSE Rules 407 and 472 by trading in securities in several outside accounts, one of which was unapproved. His trading occurred in stocks that he covered, was during the 30-day no-trade period and was inconsistent with his most recent recommendations concerning the stock. He consented to the imposition of a censure and an 18-month bar.

Several years earlier, the NYSE sanctioned Donald Larry Smith,²⁵  after a contested hearing. Smith, a former research analyst at Tucker Anthony Inc. and its affiliate, Sutro and Co. Inc., was found to have purchased stock in unapproved outside accounts prior to, or contemporaneously with, his issuance of research reports that contained buy recommendations. He neither disclosed to his firm that he owned the stock he was recommending, nor that he had traded the stocks in violation of firm policy. Smith received the penalty of a censure and a two-and-ahalf-year bar.

The Brad Hintz and Sanford C Bernstein settled matters brought by the NASD in February 2006 also dealt with the conflict that could arise when an analyst owns the stock that he covers.²⁶  Hintz, a Sanford C Bernstein and Co. research analyst covering financial institutions, held stock in one of his covered companies and options to purchase stock in another covered company that were due to expire. When Hintz and the firm sought approval for Hintz to exercise those options, the regulators determined that he was not permitted to liquidate his positions because he had favourable recommendations on these stocks. Hintz issued final reports on these two companies and disclosed, in the research reports, that he was terminating coverage in order to exercise his options. He exercised his options and then resumed coverage two months later. The NASD determined that this did not constitute an actual termination of coverage. The firm was fined US$350,000 and Hintz was fined US$200,000.

HOW REGULATORY DEVELOPMENTS MAY IMPACT FUTURE RESEARCH AND COMPLIANCE

The industry has witnessed, over the past five years, a focus on eradicating conflicts in the delivery of research and the related development of stricter rules at the SROs. This has been manifested largely as rules relating to how to manage those conflicts in the structure of the firm's departments and in mandating disclosures in the research. All of this has gone a long way towards improving the integrity in research.

The direction that research will take as a result of these developments is unclear. Will firms determine that it is no longer efficient and economical to have a costly research programme that is not directly generating income for the firm? Will there be an increase in the usage of independent, or buy-side, research? Will regulators continue to respond with further rules that pinpoint potential areas of conflict and aim to reduce their possible flare-ups? Will the sell-side research model evolve to charging customers for research services? Will settling firms exercise the opportunity provided under Addendum A to the global settlement to seek relief or modifications from the SEC, subject to the approval of the federal court, for any of the terms of the settlement that were never codified by rule-making, such as the chaperoning of employees between research and investment banking departments? Will settling firms continue to provide independent research after the five-year period during which they are required todo so expires?

One possibility of where the future of regulation lies is that regulators may, as some in the industry are urging, move toward a more principles-based way of addressing analysts' conflicts of interest, replacing the specific regimen that has been adopted over the past years with more open-ended ‘outcomefocused' rules.²⁷

Until such time as the rule-making pendulum swings in the other direction, sell-side firms that choose to publish research should pay attention to the general guidance that recent rule changes and decisions have set forth. Most prominent among these is that an analyst should issue balanced opinions, recommendations and ratings that are backed-up by analysis and facts, and that care should be exercised in expressing a point of view privately that differs from that which has been published. While that seems almost too basic a piece of advice to need iterating, it is surprising that the availability of e-mail evidence continues to reflect situations in which analysts voice a view that may be other than that which has been published. Similarly, research analysts ought not to use e-mail (or any other form of communication for that matter) to reveal to a select group of firm employees and/or customers or peers information about stock that is not public - whether that might be information that the analyst has acquired in a questionable manner about the stock itself (material, non-public information about the stock), or information that is within the purview of the analyst because it directly springs from the preparation of as-yet-unpublished research (ie what the rating or recommendation will be, or a suggested course of action).

The proliferation of e-mail use today is notable not only because of the evidentiary trail that directly links the analyst to the leak of information, but because it has created more pressure upon the firm to exercise reasonable supervision in review of electronic communications to find such troubling communication. Certainly, whether through sampling techniques or language filters, firms must be able to present a picture to regulators that, even if they did not discover a particular e-mail on their own, it was not due to inadequate systems and procedures through which to review electronic communications generally.²⁸  What is more, if they do discover such communications through the operations of such systems and controls, then firms must have in place a mechanism for investigating and handling these incidents, in order to demonstrate due diligence in reviewing for potential conflict problems and handling problems that occur. Certainly, firms can be proactive in monitoring for improper communications by paying closer scrutiny to messages sent prior to the issuance of research, or to a change in a rating or recommendation.

As for the expanded disclosure requirements, undoubtedly the need to meet these will continue to place unavoidable pressures on a firm's systems and resources. As disclosure becomes an ongoing element of the research operations, firms should be at the point of having created the internal systems through which to maintain the information internally, to update it periodically and to furnish it as part of the research in the required formats. This may be an area of operations that would benefit from frequent internal audit and review to ensure that each of the pipelines of information that need to flow into research disclosures are operating properly.

Finally, although not required, some firms have already opted to adopt rules internally on analyst stock ownership that go even further than simply those of disclosure of ownership interests, prohibiting their analysts from owning stocks that they are covering, or even those that are in the same sector. By choosing to restrict stock ownership in this way, firms not only alleviate certain of their disclosure obligations and curtail analyst trading in covered stocks in contravention of prevailing restrictions, but help to create the appearance of neutrality in the analyst's work product. Another option in monitoring analyst trading activities in covered stocks is to require that analysts maintain all of their securities positions in firm accounts, decreasing the possibility of trading in these stocks away from the firm.

CONCLUSION

Enforcement actions in the past few years delivered the message that research, to be credible, must be independent and free of conflicts of interest. Several outstanding issues concerning the dissemination of research reports remain open in this postglobal settlement era.

It is clear, however, that securities regulators will continue to scrutinise and monitor research for proper conflict of interest disclosures, and that research departments will be regularly reviewed to ensure that proper firewalls are in place. Further, because the integrity, independence and objectivity of research is vital to investor confidence, the potential impact of conflicts of interest on research analysts will remain a subject of investigation. Where appropriate, enforcement actions will be brought when the conduct raises a concern about the analysts' or the firms' integrity, or about the potential impact of undetected or undisclosed conflicts on the published research product.

REFERENCES
(1) In April 2003, settlements for roughly US$1.4bn were reached with ten firms: Bear, Stearns & Co. Inc; Credit Suisse First Boston; Goldman Sachs & Co.; Lehman Brothers Inc.; JP Morgan Securities Inc.; Merrill Lynch; Pierce, Fenner & Smith Inc; Morgan Stanley & Co. Inc; Citigroup Global Markets Inc; UBS Warburg LLC; US Bancorp Piper Jaffray Inc. Thereafter, in August 2004, two additional matters were resolved against Deutsche Bank Securities and Thomas Weisel Partners.
(2) The scope of the restructuring is contained in Addendum A to the settlement documents, available on the NYSE and SEC websites.
(3) See NYSE Rule 472, NASD Rule 2711, SEC Exchange Act Release 34–45908 (10th May, 2002, available online at http://www.sec.gov/rules/sro/34-45908.htm).
(4) SEC Exchange Act Release 34–54616 (17th October, 2006, available online at http://www.sec.gov/rules/sro/nyse/2006/34-54616.pdf ) and SEC Exchange Act Release 34-55072 (17th January, 2007).
(5) In May 2004, the Bond Market Association, now merged into the Securities Industry and Financial Markets Association (SIFMA), adopted guiding principles for fixed income research that incorporated, on a voluntary basis, many of the principles contained in the global settlement - see www.bondmarkets.com. The NYSE and NASD, in a joint Information Memorandum issued in August 2006, noted certain instances in which firms were not adhering to the voluntary guidelines and suggested that they would continue to monitor for compliance with the guidelines, with a view towards determining whether to codify these principles for fixed income products.
(6) SEC Exchange Act Release 34–55466 (14th March, 2007, available online at http://www.sec.gov/litigation/admin/2007/34-55466.pdf).
(7) NYSE Hearing Panel Decision 05-163, 9th February, 2006 (see online at http://www.nyse.com/press/1139397230229.html#05-163).
(8) See NYSE Rule 472 and NASD Rule 2711.
(9) NYSE Hearing Panel Decision 06–217, 8th February, 2007 (see online at http://www.nyse.com/DiscAxn/discAxn_02_2007.html#06-217).
(10) NASD News Release, 17th July, 2006.
(11) NYSE Hearing Panel Decision 06–178, 26th September, 2006 (see online at http://www.nyse.com/DiscAxn/discAxn_11_2006.html#06-178).
(12) NYSE Hearing Panel Decision 06–175, 11th October, 2006 (see online at http://www.nyse.com/DiscAxn/discAxn_11_2006.html#06-175).
(13) NYSE Hearing Panel Decision 06–137, 9th August, 2006 (see online at http://www.nyse.com/DiscAxn/discAxn_08_2006.html#06-137).
(14) NASD News Release, 31st January, 2006.
(15) NYSE Hearing Panel Decision 06–23, 7th June, 2006 (see online at http://www.nyse.com/DiscAxn/discAxn_06_2006.html#06-023).
(16) See SEC Litigation Release 20022 (1st March, 2007, available online at http://www.sec.gov/litigation/litreleases/2007/lr20022.htm).
(17) NYSE Hearing Panel Decision 05–179, 8th February, 2006 (see online at http://www.nyse.com/DiscAxn/discAxn_03_2006.html#05-179).
(18) Peter Caruso NYSE Hearing Panel Decision 04-83, 19th May, 2004, available online at http://www.nyse.com/pdfs/04-083.pdf - imposing penalties of a four-month bar and a US$25,000 fine; Janina Casey NYSE Hearing Panel Decision 04–73, 18th May, 2004, available online at http://www.nyse.com/pdfs/04-073.pdf - imposing penalties of a one-month suspension and a US$150,000 fine.
(19) Merrill Lynch, Pierce, Fenner & Smith NYSE Hearing Panel Decision 04–30, 8th March, 2004, available online at http://www.nyse.com/pdfs/04-030.pdf.
(20) NASD News Release, 14th January, 2005.
(21) FSA Press Release, 20th March, 2007, available online at http://www.fsa.gov.uk/pages/Library/Communication/PR/2007/036.shtml.
(22) FSA Press Release, 23rd November, 2006, available online at http://www.fsa.gov.uk/pages/Library/Communication/PR/2006/122.shtml.
(23) NASD News Release, 23rd February, 2005.
(24) NYSE Hearing Panel Decision 07–29, 8th March, 2007 (see online at http://www.nyse.com/DiscAxn/discAxn_04_2007.html#07-029).
(25) NYSE Hearing Panel Decision 03–200, 30th October, 2003 (available online at http://www.nyse.com/pdfs/03-200.pdf).
(26) NASD News Release, 8th February, 2006.
(27) See www.fsa.gov.uk for speeches and publications that promote the idea of principles-based regulation.
(28) See NYSE Information Memorandum 07–54 Proposed Joint Guidance Regarding the Review and Supervision of Electronic Communications, 14th June, 2007.

This site, like many others, uses small files called cookies to customize your experience. Cookies appear to be blocked on this browser. Please consider allowing cookies so that you can enjoy more content across globalcustody.net.

How do I enable cookies in my browser?

Internet Explorer
1. Click the Tools button (or press ALT and T on the keyboard), and then click Internet Options.
2. Click the Privacy tab
3. Move the slider away from 'Block all cookies' to a setting you're comfortable with.

Firefox
1. At the top of the Firefox window, click on the Tools menu and select Options...
2. Select the Privacy panel.
3. Set Firefox will: to Use custom settings for history.
4. Make sure Accept cookies from sites is selected.

Safari Browser
1. Click Safari icon in Menu Bar
2. Click Preferences (gear icon)
3. Click Security icon
4. Accept cookies: select Radio button "only from sites I visit"

Chrome
1. Click the menu icon to the right of the address bar (looks like 3 lines)
2. Click Settings
3. Click the "Show advanced settings" tab at the bottom
4. Click the "Content settings..." button in the Privacy section
5. At the top under Cookies make sure it is set to "Allow local data to be set (recommended)"

Opera
1. Click the red O button in the upper left hand corner
2. Select Settings -> Preferences
3. Select the Advanced Tab
4. Select Cookies in the list on the left side
5. Set it to "Accept cookies" or "Accept cookies only from the sites I visit"
6. Click OK