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US: Fleet Specialist To Pay $59.4 Million Fine

Associated Press
March 2nd, 2004

Fleet Specialist, one of the five New York Stock Exchange specialist firms that have settled illegal trading charges with the Securities and Exchange Commission, will pay $59.4 million in fines and restitution, its parent company said Tuesday.

In FleetBoston Financial Corp.'s annual report, the company said its Fleet Specialist subsidiary took part in the $240 million settlement reached last month with the SEC and NYSE. The SEC has yet to give final approval to the deal.

The five firms manage stock trading on the floor of the exchange, bringing buyers and sellers together and occasionally using their own store of stock to help meet supply, or buying stock to help fill demand. The firms were accused of putting their own trades ahead of customers' in order to make an additional profit.

The other firms involved include:

-- Labranche & Co., which said it will pay $63.5 million in fines and restitution.

-- Van der Moolen Holdings MV, which was still in negotiations with the SEC to pay between $51.8 million and $57.7 million.

-- Goldman Sachs subsidiary Spear, Leeds & Kellogg Specialist LLC, which agreed to pay $45.5 million.

-- Bear Stearns subsidiary Bear Wagner, which has not disclosed its expected fines.

NYSE officials have stressed that while the five firms made approximately $155 million in illegal trades over five years, the exchange's seven specialist firms handled $50 trillion in trades during that time period.

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