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Brokerages Fined for Mishandling Orders

October 17, 2000

Prudential Securities Inc., Lehman Bros. Inc. (LEH) and five other brokerages were fined a total of $213,000 by the National Assn. of Securities Dealers for improper handling of customer orders, the NASD said.

The NASD said Prudential and Lehman failed to promptly display customer limit orders when each order was at a price that would have improved the firm's best bid or offer in a given security.

Without admitting or denying the NASD allegations, Prudential agreed to pay $10,000 and Lehman agreed to pay $37,000.

The NASD disciplinary actions follow a recent Securities and Exchange Commission report that said failure to promptly display customer limit orders--orders to buy or sell at a specific price or better--is a widespread problem.

Officials at the two firms couldn't be reached or declined to comment.

The NASD also complained about a lack of prompt limit order display by Ryan, Beck & Co.; CIBC World Markets Corp.; Fleet Securities Inc.; Paragon Capital Corp.; and Wheat First Union, now called First Union Securities.

In settling these and other charges, the firms neither admitted nor denied them.

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