Corporations and securities brief ~ NYSE fines Merrill Lynch for "operational lapses"

[JURIST] Leading Monday's corporations and securities law brief, the New York Stock Exchange says it has censured and fined Merrill Lynch for what it called "supervisory and operational lapses." In a press release, the NYSE indicated it has fined the brokerage giant $10 million for, among other things, failure to deliver prospectuses and product descriptions to customers. Merrill Lynch also had not fulfilled its obligations under a previous disciplinary measure and had not properly maintained records, the NYSE added. Reuters has more.

In other corporations and securities law news...

  • After closing on its purchase of NEXTEL Friday [Reuters report], the new Sprint [merger website] corporation began trading Monday. The completed merger follows months of legal wrangling with affiliates and subsidiaries [JURIST report]. Sprint is now the third largest wireless phone service provider in the United States. Reuters has more.

  • President Bush will not intervene in the ongoing labor dispute between Northwest Airlines [JURIST report] and their mechanics' union. Bush may interfere with any labor dispute that could damage interstate commerce, as he did in 2001 when he prevented a labor stoppage [CNN report] between these same two groups by requiring a 60-day "cooling off" period before the union could strike. Both Northwest and the union say they are prepared for a strike. In a recent press release, Northwest said it must cut $1.1 billion from its budget to avoid bankruptcy. Reuters has more.

  • The SEC has charged four brokers and a day trader [SEC press release] with fraudulently cheating investors through a "squawk box" scheme. A squawk box is a device securities traders use internally to broadcast sell and buy orders for large blocks of securities. John J. Amore, the day trader, is charged with bribing former and current brokers with Citigroup, Lehman Brothers and Merrill Lynch to allow him to listen in on their squawk box lines. Amore was then able to know when the large purchases were about to go through and profit from the information, the SEC said. Bloomberg has more.

 

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