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Compliance January 14, 2007
Ex-UBS and Merrill Advisers Investigated by NYSE for Market Timing
The New York Stock Exchange appears to be investigating three advisers, known as the CBS Group, who were involved in market timing five years ago, fining their supervisors at both UBS and Merrill, according to published reports.
Reported by Alison Cooke
In its monthly listing of disciplinary actions released last week, the New York Stock Exchange said it fined John Borgese, a former UBS AG branch manager, $50,000 who did not properly supervise three unnamed financial advisers who were involved in market timing five years ago when they worked at UBS in Paramus, New Jersey, according to an AP report. Further, the document said action was being taken against the advisers mentioned.
The advisers, named as Christopher Chung, Kevin Brunnock, and William Savino, in published reports, were reportedly fired from Merrill Lynch in 2003, after joining the firm in January 2002, for allegedly helping a hedge fund trade improperly in mutual funds.
In 2006, the New York Stock Exchange charged the advisers’ supervisor at Merrill Lynch, Curtis Brown, for failing to properly supervise the advisers and maintain controls. He had already been fined, along with his manager Andy Williams, a combined $250,000 after the CBS group had been fired from Merrill, Dow Jones reported.
The three advisers’ licenses were revoked in 2005 by the New Jersey Bureau of Securities for allegedly engaging in market timing. The New Jersey Bureau of Securities and the New York Stock Exchange also fined UBS $49.5 million fine for not preventing the improper trading of the advisers. Merrill Lynch was fined $13.5 million by the New York Stock Exchange in 2005 for the same reason.