NASD Fines Three Firms For MSRB, Other Rule Violations

NASD censured and fined three firms and one of the firm’s research analysts a total of $55,500 for violations of municipal securities and other regulations. The enforcement cases against Meyers Associates LP in New York City, Cabrera Capital Markets Inc. in Chicago, and Anderson & Strudwick Inc. in Richmond, Va., were disclosed in the monthly disciplinary actions that NASD released Friday. The Meyers firm was the only one cited solely for municipal securities rule violations by NASD. The self-regulator fined the firm $10,000 for conducting 60 municipal securities transactions without a properly registered principal from Feb. 22, 2003, through March 8, 2004. The firm’s conduct violated Municipal Securities Rulemaking Board Rules G-2 on standards of professional qualifications, G-3 on classification of representatives and principals, and G-27 on supervision, NASD said. Victor J. Puzio, the firm’s chief compliance officer, declined to comment on the case.Cabrera was fined $23,000 for muni securities trade violations and six other non-muni related infractions. NASD said that from April 1, 2005, through June 30, 2005, 10 of 53, or 18.6%, of the firm’s muni trades with customers were reported after the 15-minute deadline. Under the MSRB’s real-time transaction reporting system, dealers must report prices and other information from most muni trades within 15 minutes after they are executed. The firm’s conduct violated the board’s Rule G-14 on trade reporting, NASD said. The self-regulator also cited the firm for corporate debt trade reporting failures, net capital deficiencies, and inaccurate “focus” reports. NASD noted in enforcement documents that Cabrera has been cited in other disciplinary actions during the past few years, including in November 2005 for late muni securities trade reporting. Cabrera officials could not be reached for comment. NASD levied a total of $22,500 of fines on Anderson & Strudwick and Bradley A. Brown, one of its general securities principals and research analysts, for muni and non-muni related rule violations. Specifically, the firm was fined $12,500, Bradley was fined $5,000, and the firm and Bradley were jointly fined another $5,000. From June through November 2005, the firm failed to report 54 muni securities trades on a timely basis, in violation of the MSRB’s G-14, NASD said. During the same period, the firm violated Rule G-27 by failing to establish, maintain, and enforce written supervisory procedures that were reasonably designed to achieve compliance with G-14, the self-regulator said. NASD also cited the firm and Bradley for violating trading restrictions in a “research analyst account” and for failing to properly disclose information in research reports. This conduct appeared to involve equities or corporate securities, not municipal securities. Officials with Anderson & Strudwick could not be reached for comment. NASD enforces the municipal securities rules that are written by the MSRB.