The NYSE declined to comment last night, saying only: "The NYSE is not investigating front-running." A spokesman for FleetBoston Financial Corp. had no comment. Van Der Moolen officials couldn't be reached. LaBranche officials didn't return calls for comment. Bear Stearns didn't return a call for comment. Goldman declined to comment.
Over the summer, officials at the SEC asked NYSE regulators to broaden the scope of a continuing probe into the behavior of floor traders, say people familiar with the matter. Up to then, the probe had focused on whether floor traders had made trades for their firms' accounts at times when they should have hung back and let public investors meet, without the traders' intervention, instead. But at the SEC's request, people familiar with the matter have said, the NYSE is now investigating whether floor traders "traded ahead" of customer orders, a related rule violation that occurs when a trader puts his or her firm's own interests ahead of investors' by ignoring one investor order in the process of interacting with another.
Van Der Moolen Specialists USA, which is owned by the Dutch trading firm Van Der Moolen Holdings, is among the smallest of the big five specialist firms on the floor. (Two others, Susquehanna Specialists and Performance Specialist Group, are significantly smaller.) Still, Van Der Moolen's stocks include bellwethers like Walt Disney Co., Pfizer Inc. and ConAgra Foods Inc. The firm, which is traded publicly in the Netherlands, also trades on the NYSE, where it listed in 2001. Its vice chairman, Robert Fagenson, sits on the NYSE's board of directors. Van Der Moolen, a significant player on its home exchange in Amsterdam, has built its NYSE floor operation through a series of acquisitions of smaller specialist firms on the exchange floor.
