Monday, June 25, 2007
The SEC has remanded to the NYSE a proceeding against Warren E.Turk, a former NYSE member and former specialist associated with an NYSE member firm. The NYSE censured and permanently barred Turk based on his failure to testify in connection with its investigation of improper trading practices by NYSE specialists. Turk claims that the NYSE could not force him to testify because, at the time the NYSE requested his testimony, Turk was the subject of a criminal investigation and could therefore invoke the Fifth Amendment's right against self-incrimination. Turk argues that the right against self-incrimination applied to the NYSE because, under the particular facts and circumstances of this case, the NYSE engaged in "state action" in conducting its investigation of Turk. The Commission rejected Turk's argument that the NYSE is a state actor generally and found that the evidence Turk has presented thus far in support of his state action argument is insufficient to establish that the NYSE has engaged in state action. It concluded, however, that "it is appropriate to provide Turk an opportunity to develop a full evidentiary record on the state action question."