“NYSE Defendants” can have slightly different meanings depending on whether the New York Stock Exchange (“NYSE”) is conducting an investigation or whether it has instituted formal disciplinary proceedings against a person or company.
The NYSE is not an agency of the United States Government. It is technically a private organization, or a “self-regulatory organization” (an “SRO”). The NYSE does not have jurisdiction over everyone; it only has authority over organizations that are Members of the NYSE and present and former employees of those organizations.On July 30, 2007, the NYSE’s member regulation, enforcement, and arbitration operations were combined with the National Association of Securities Dealers (“NASD”) to form the Financial Industry Regulatory Authority (“FINRA”). Today, FINRA conducts most of the investigations into fraud and securities violations committed by FINRA Member organizations and their employees (or “associated persons”), including those that are part of the NYSE. However, the NYSE may still investigate violations of its own Rules and other matters within its jurisdiction.
When the NYSE is conducting an investigation it usually believes, based on evidence available to it at the time, that a violation has occurred. While the NYSE sometimes may not be willing to use the term “target”, that term is often used by people outside of the NYSE. “Target” is usually used to refer to a person or company that the NYSE likely thinks actually did commit a violation, based on information that the NYSE has at the time. Over the course of an NYSE investigation, someone who the NYSE initially believes may be just a witness may come to be viewed as a “target”. Likewise, over the course of an NYSE investigation, someone who the NYSE initially believes may be a potential “target” may come to be viewed as just an innocent witness. Again, sometimes the NYSE may not be willing to use these terms, and may instead simply refer to someone as a “witness” if anything. During an investigation, sometimes people outside of the NYSE will refer to a “target” of the investigation as an “NYSE defendant” in the investigation.
If the NYSE brings a formal case against a person or company, it brings that case in an administrative proceeding instead of a lawsuit in court. Often this administrative proceeding is called a “disciplinary hearing” or “disciplinary proceeding”. Generally speaking, NYSE disciplinary hearings are somewhat similar to lawsuits, excpet that they have their own rules and will usually be decided by disciplinary hearing officers instead of by courtroom judges or juries. A person or company that the NYSE is suing in a disciplinary hearing is also referred to as a “respondent” or a “defendant”.
If you would like information about The Pickholz Law Offices’ experience representing NYSE Defendants, or those who believe that they may become an NYSE Defendant, please feel free to click on the “Sample Matters” link and the other links on the right side of this page.
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