The New York Stock Exchange reports that it has taken disciplinary actions against four firms, including RBC Dain Rauscher Inc., and 10 individuals for assorted violations of NYSE rules and federal securities laws.

RBC Dain Rauscher Inc., the Minneapolis-based subsidiary of Royal Bank, was cited for technical violations related to proprietary trading. An NYSE hearing panel found that, during the period February-October 2002, the firm:

    failed to fund its proprietary account for introducing brokers;

  • entered proprietary orders while representing customer orders that could be executed at the same price, without using separate proprietary facilitation accounts for such trades;
  • failed to make, maintain and preserve certain required records of customer orders; and
  • failed to provide for appropriate procedures of supervision and control and to establish a separate system of follow-up and review to prevent the violations.

    The NYSE imposed a penalty of a censure and US$80,000 fine. RBC Dain Rauscher consented to the penalty without admitting or denying guilt.

    Goldman, Sachs & Co. also consented, without admitting or denying guilt, to findings of supervisory and books and records deficiencies relating to the receipt, execution, allocation and preservation of customer orders. It was hit with a censure and US$175,000 fine.

    The other firms facing sanctions are Westminster Securities Corp. and Natexis Bleichroeder Inc., both of New York. A variety of individuals, including one floor broker, and assorted registered reps, were also sanctioned.