NYSE Threatens Sanctions Against LaBranche

The specialist firm says it doesn't want to turn over personal employee emails.
Publish date:


New York Stock Exchange

is threatening sanctions against specialist firm



for the company's refusal to turn over certain employee emails in connection with an ongoing Big Board investigation of trading practices.

LaBranche, the parent company of one of the top NYSE specialist firms, said the exchange's division of enforcement recently served its unit with a "charge memorandum" because of the firm's refusal to furnish copies of all personal emails sent or received by certain LaBranche specialists and other employees since January 2002.

The NYSE's enforcement division requested copies of the personal emails as part of the exchange's probe of the trading practices of specialist firms.

LaBranche believes that its specialist unit "has operated in accordance with applicable specialist trading requirements of the NYSE, and that it is fully cooperating with the pending investigation." The company said its personnel have given a number of on-the-record interviews to the NYSE, and LaBranche said it has produced numerous documents, including thousands of emails.

However, the company said it wants to protect its workers' privacy rights, and therefore has resisted the NYSE's efforts to obtain copies of its employees' personal email, saying those communications have no bearing on any of LaBranche's business activities and aren't relevant to the pending investigation.

LaBranche said it has tried to comply with the NYSE's request by offering to furnish copies of the disputed emails to an independent third party for a determination of their relevance to the investigation, but the enforcement division refused the offer.

The firm plans to "contest vigorously" the NYSE's attempts to obtain copies of its employees' nonbusiness email messages. The company will file a response by Aug. 12 to the NYSE denying the charge that it has failed to cooperate with the investigation.

LaBranche is the specialist for more than 650 companies, nine of which are in the

Dow Jones Industrial Average

, and 101 of which are in the

S&P 500

. In addition, the firm is the specialist in more than 200 options.