Day-trading firms settle with regulators
The regulatory group that oversees U.S. stockbrokers and brokerage firms disciplines five day-trading firms as part of a wider effort to examine the day-trading business.
The actions are part of a wider effort by the National Association of Securities Dealers' regulation arm to examine the day-trading business. The NASD is the parent of the Nasdaq stock exchange.
Day trading was the rage at the peak of the dot-com boom in 1999 and early 2000 as investors flocked to make money with the rapid trading of volatile stocks. When the stock markets suffered, however, day trading lost a lot of its luster.
None of the firms involved in the actions announced Thursday admit or deny the allegations.
• Landmark Securities Corp. was expelled from the Association. Former president James C. Gillock was fined $50,000 and suspended for two years as a principal and for six months in all capacities. The company was accused of using misleading advertising materials and committing regulatory violations.
• Momentum Securities was censured and fined $75,000. The allegations include charges the firm failed to properly address customer credit issues, resulting in the execution of a customer's accidentally entered order to purchase $11.5 million.
• CyBerBroker Inc. and former president Mark K. Stryker were both censured, fined a total of $16,000, and forced to forfeit commissions of $4,000. They were accused of allowing customers to make equity transactions when not properly registered.
• Cornerstone Securities Corp. and former president Russell A. Grigsby were censured and fined $35,000. They were charged with regulatory violations, including distributing improper advertising materials.
• Summit Trading and president William N. Sunshine were censured and fined a total of $20,000. Allegations include distributing misleading advertising materials and regulatory violations.