SECURITIES AND EXCHANGE COMMISSION
Washington, D.C.
SECURITIES EXCHANGE ACT OF 1934
Rel. No. 48554 / September 26, 2003
Admin. Proc. File No. 3-10999
_________________________________________________________________
In the Matter of the Application of
EDWARD JOHN MCCARTHY
For Review of Disciplinary Action Taken by the
NEW YORK STOCK EXCHANGE, INC.
_________________________________________________________________
OPINION OF THE COMMISSION
NATIONAL SECURITIES EXCHANGE -- REVIEW OF DISCIPLINARY PROCEEDING
Conduct Inconsistent with Just and Equitable Principles of Trade
Acts Detrimental to the Interest or Welfare of the Exchange
Trading for Member's Own Account and Account Over Which Member
Exercised Discretion
Trading so as to Accord Own Account Preferential Treatment
Recordkeeping Violations
Member of national securities exchange effected trades for an account
in which the member had an interest and over which he exercised
discretion; traded in a manner that accorded this account preferential
treatment over accounts of member's customers; and failed to make and
preserve required records. Held, exchange disciplinary action
sustained.
APPEARANCES
George Brunelle, and Suzanne E. Auletta, of Brunelle & Hadjikow, P.C.,
for Edward John McCarthy.
Rex W. Mixon, Jr., Nancy Reich Jenkins, David Steiner, Laura A.
Cooper, and Steven M. Tanner, for the New York Stock Exchange, Inc.
Appeal filed December 18, 2002
Last brief received April 8, 2003
I.
SNIPPETS:
SECURITIES AND EXCHANGE COMMISSION
OPINION OF THE COMMISSION NATIONAL SECURITIES EXCHANGE -- REVIEW OF DISCIPLINARY PROCEEDING
Acts Detrimental to the Interest or Welfare of the Exchange Trading for Member's Own Account
Member of national securities exchange effected trades for an account in which the member had
Held, exchange disciplinary action sustained.
George Brunelle, and Suzanne E. Auletta, of Brunelle & Hadjikow, P.C., for Edward John
Rex W. Mixon, Jr., Nancy Reich Jenkins, David Steiner, Laura A. Cooper, and Steven M. Tanner,
Edward John McCarthy, a member of the New York Stock Exchange, Inc. and since March 1994 an
The NYSE determined that, between June 1995 and March 1996, McCarthy engaged in conduct
The NYSE found that McCarthy violated Section 11of the Securities Exchange Act of 1934^ and
The NYSE further determined that McCarthy violated NYSE Rule 91^ by crossing orders without
during the first two or three months that he traded for the Oakford account he calculated
McCarthy noted that he prepared the Oakford bills because they involved a calculation of the
McCarthy also had a sell-short order from a customer for 10,000 KM shares at a price of 10
On February 27, 2001, an Exchange Hearing Panel commenced a disciplinary hearing to consider
McCarthy makes a number of arguments that this disciplinary proceeding was deficient on
Section 11, subject to certain exemptions not relevant here, makes it "unlawful for any
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