The Securities and Exchange Commission announced yesterday that it had moved against 19 registered specialists on the American Stock Exchange for reporting fictitious options transactions.
Ten of the specialists consented to the SEC complaint without either admitting or denying the allegations.
Administrative proceedings have been started by the SEC against the other nine defendants.
The commission accused the specialists of violating anti-fraud and anti-manipulation provisions of the federal securities laws.
The alleged fictitious options trades were first discovered last spring by officials of the American Stock Exchange.
Specialists handle the trading of stocks on the exchange floor. There is a floor specialists for each listed security.
The SEC alleged the specialists of so-called tape painting - creating fictious transactions that appeared on the tape that records trades - between January 1975 and March 1976.
The nine specialists who did not sign consent decrees have been offered by the SEC to reply to the charges. The SEC will schedules a public hearing on the allegations.
The SEC, in documents filed at U.S. District Court in Manhattan, did not explain why the alleged fictitious options trades took place or how much money was involved in the trades.
The 10 specialists, who signed consent decrees are all from the New York City area. They are Louis Miceli, Robert John Van Caneghan, Peter Orloff, Donald Nuppnau, Nicholas Gloconda, John J. Manon, Claude P. Winge, Thomas C. Jones JR., Kiernan B. Duffy and Dennis B. Poster.
At the time of the alleged trades, five of the specialists were employed in New York for Chicago-based Becker Securities Corp.
Mann and Winge worked for Mann, Sagarese, Drago & Molen, Jones for Purcell Graham & Co., Duffy for Bruan, Gordon & Co., and Poster was an independent member of the exchange.
The nine who face administrative proceedings are: Alfred T. Merendino, Joseph Giamanco, and gary Herman, all general partners of Herman & Co., Herbert M. Altman and George Mitro of Jackson & Segal, Inc., Rosario Ingallinera and Jessie A. Greenwald, who have their own firm, Edward Jackson of Purcell, Graham & Co., and Arthur H. Diamond, a sole proprietor.