Legg Mason Wood Walker, the stock brokerage arm of Baltimore's Legg Mason Inc., and two Maryland stockbrokers have been disciplined by the New York Stock Exchange for various alleged securities violations.
The sanctions were among 22 disciplinary cases announced by the stock exchange yesterday.
The violation of what Legg Mason called "complex, technical rules" is the first sanction that Legg Mason has ever received from the New York Stock Exchange, according to Legg Mason spokeswoman Geraldine Daly.
The stock exchange said Legg Mason was censured and fined $45,000 for failing to keep certain records and failing to maintain the required level of its special reserve bank account for the exclusive benefit of clients. Such bank accounts are required to back up the accounts of clients in the event of financial problems at brokerages. Legg Mason accepted the findings and penalty without admitting or denying guilt, the stock exchange said.
In a prepared statement, Legg Mason said the violation relates to matters that occurred in 1986 and 1987. After routine examinations, regulators told the company that they differed with Legg Mason over a small number of interpretations of "complex, technical rules," the statement said.
Legg Mason said it made the interpretations in good faith and believed them to be correct. After the findings of the regulators, "we immediately changed our procedures to reflect their comments," the Legg Mason statement said. "No client account was affected in any way," the company said.
In another action, the stock exchange said Anthony Vincent Caldaro, of Columbia, a stockbroker for Kidder, Peabody & Co. Inc., of New York, consented to a censure and a six-year bar from working in the securities industry. He did not admit or deny guilt, the stock exchange said. The violations
included opening an account for his wife without saying she was related, and for permitting the account to purchase securities without paying for them.
Efforts to reach Caldaro were not successful and his lawyer was not available for comment.
Ray Alene Rhodes of Hagerstown, a stockbroker for New York's Merrill Lynch, consented to a censure and a two-year bar from the securities industry, without admitting or denying guilt. She was disciplined for a sales practice violation that included options infractions, according to the stock exchange.
Rhodes said the violation was for a minor infraction that involved the loss of money for a client and said she did not enrich herself.