Morgan Chase fined, censured for short-selling violations

NYSE Fines 3 Firms for Violations

From The Wall Street Journal
Thursday, September 14, 2006

NEW YORK -- NYSE Regulation Inc., the New York Stock Exchange's regulatory arm, said it fined Citigroup Inc., J.P. Morgan Chase & Co., and Wachovia Corp. a combined $3.1 million for separate violations of exchange rules.

J.P. Morgan was fined $400,000 and censured for violations of short-selling rules between 2001 and 2005. The NYSE said violations primarily involved the mismarking of orders.

Citigroup was fined $500,000 for supervisory failures on its precious-metals trading desk between January 2002 and January 2003. The NYSE said Citigroup's sole precious-metals trader at the time, Gail Edmonds, traded "in excess of her authorized limits."

Wachovia was fined $2.25 million for failing to retain and review email communications made between January 1999 and April 2006. The NYSE said $1.65 million of the fine will be waived in recognition of the payment as part of a regulatory settlement with the North American Securities Administrators Association relating to email communications.

In agreeing to the penalties, the companies neither admitted nor denied guilt.

A Citigroup spokeswoman said, "We are pleased to have this matter resolved. This settlement relates to an incident dating back to 2002; the firm took immediate action when the matter was discovered, and we have since strengthened our internal controls. Citigroup remains committed to the highest levels of governance and transparency."

A representative at Wachovia wasn't available to comment.

A J.P. Morgan spokesman declined to comment.

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