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Editor: Eric C. Chaffee
Univ. of Toledo College of Law

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Monday, February 22, 2010

SEC Settles Charges Against Former Amex CEO for Regulatory Deficiencies

The SEC settled charges instituted against Salvatore F. Sodano, the former Chairman and CEO of the American Stock Exchange LLC. The Order finds that the Amex failed adequately to enforce certain order handling rules and to comply with its record keeping obligations. As the Amex's Chairman and Chief Executive Officer (CEO), Sodano was one of the individuals who had an obligation to enforce compliance during the relevant period by the Amex's members and associated persons with the Exchange Act, the Exchange Act rules and regulations, and the Amex's own rules. From at least 1999 through June 2004, the Amex had critical deficiencies in its surveillance, investigative, and enforcement programs for assuring compliance with its rules as well as the federal securities laws. These regulatory deficiencies resulted in part from Sodano's failure to take adequate steps to ensure that he and the Amex were meeting their regulatory obligations. As a result of the Amex's failure adequately to surveil for and investigate violations of, and to enforce, certain options order handling rules, the Amex violated Section 19(g) of the Exchange Act. The Order finds that Sodano, as CEO, without reasonable justification or excuse, failed to enforce compliance by Amex's members and associated persons with the Exchange Act, the Exchange Act rules and regulations, and the Amex's own rules, within the meaning of Section 19(h)(4) of the Exchange Act.  No penalties or sanctions are imposed on Sodano.

http://lawprofessors.typepad.com/securities/2010/02/sec-settles-charges-against-former-amex-ceo-for-regulatory-deficiencies.html

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