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For immediate release
March 20, 1997
The Federal Reserve Board today announced the issuance
of a combined Order to Cease and Desist and Order of Assessment
of a Civil Money Penalty against Mark E. Schindler, a former
officer of BT Securities Corporation, New York, a subsidiary of
Bankers Trust New York Corporation, New York.
Mr. Schindler, without admitting to any allegations,
consented to the issuance of the Order in connection with his
alleged involvement
transactions
in the marketing of leveraged derivative
to customers of Bankers Trust New York Corporation
and its subsidiaries.
Mr. Schindler paid a civil money penalty of $25,000.
A copy of the Order is attached.
Attachment
UNITED STATES
BEFORE
BOARD OF GOVERNORS
OF
OF AMERICA
TEE
THE FEDERAL RESERVE SYSTEbf
WASHINGTON, D.C.
__-.-_-_______________________-____
X
In the Matter of
Mark E. Schindler
A Former Employee and
Institution-Affiliated
Party of
BANKERS TRUST NEW YORK CORPORATION :
New York, New York
Docket No. 96-006-B-16
96-006-CMP-16
Order to Cease and Desist
and Order of Assessment
of a Civil Money Penalty
Issued Upon Consent
Pursuant to the Federal
Deposit Insurance Act,
as Amended
BT SECURITIES CORPORATION
New York, New York
---x
WHEREAS, pursuant to Sections 8(b) (1) and 8(i)
of the Federal Deposit Insurance Act, as amended (12 U.S.C.
§§ 1818(b) (1) and 1818(i)) (the "FDI Act"), the Board of
Governors of the Federal Reserve System (the "Board of
Governors") issues this combined Order to Cease and Desist
and Order of Assessment of a Civil Money Penalty (the @qOrder")
against Mark E. Schindler (flSchindler"),a former employee and
institution-affiliated party, as defined in Sections 3(u) and
8(b) (3) of the FDI Act (12 U.S.C. 55 1813(u) and 1818(b) (3)), of
Bankers Trust New York Corporation, New York, New York ("BTNYC"),
a registered bank holding company, and BT Securities Corporation,
a nonbank subsidiary of BTNYC, in connection with Schindler's
involvement in the marketing of leveraged derivative transactions
to customers of BTNYC and its subsidiaries;
WEEREAS, by affixing his signature hereunder, Schindler
has consented to the issuance of this Order by the Board of
Governors and consented to comply with each and every provision
of this Order, and waived any and all rights he might have
pursuant to 12 U.S.C. § 1818 or 12 C.F.R. Part 263, or otherwise
(a) to the issuance of a notice of charges and of hearing and
of a notice of assessment of a civil money penalty; (b) to a
hearing for the purpose of taking evidence with respect to
any matter implied or set forth in this Order; (c) to obtain
judicial review of this Order or any provision hereof; and
(d) to challenge or contest in any matter the basis, issuance,
validity, effectiveness, collectibility or enforceability
of this Order or any provision hereof; and
NOW, THEREFORE, prior to the taking of any testimony or
adjudication of or finding on any issue of fact or law herein,
and without this Order constituting an admission of any
allegation made or implied by the Board of Governors in
connection with this proceeding, and solely for the purpose
of settlement of this proceeding without protracted or extended
hearings or testimony:
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IT
8(i)
HEREBY ORDERED,
pursuant
to Sections
8(b)
and
of the FDI Act, that:
1.
Schindler
of any
the
IS
For a period
shall,
while
institution
of three
serving
or agency
(3) years
from
this
Order,
as an institution-affiliated
specified
in Section
party
8(e) (7) (A) of
FDI Act (12 U.S.C. 5 1818(e) (7)(A)), including a bank, bank
holding company, or nonbank subsidiary, cease and desist
from:
(a) drafting, modifying or amending a
confirmation, or any other document to be
provided to a customer evincing or verifying
the terms of any financial transaction,
without independent verification of the
accuracy of the terms of the financial
transaction;
(b) providing to a customer or counter-party,
either verbally or in writing, a historic,
current or future valuation or market value
for any financial transaction unless such
valuation is verified in writing by the
institution's back office; or
(C) amending or restructuring a financial
transaction unless Schindler provides notice
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to a supervisor of the terms of the amendment
or restructuring.
2.
For a period of three (3) years from this
Order, Schindler shall notify the Federal Reserve Bank of New
York (the "Reserve Bank") upon becoming an institution-affiliated
party of any institution or agency specified in
Section 8(e) (7)(A) of the FDI Act.
3.
While serving as an institution-affiliated party of
any institution or agency specified in Section 8(e) (7)(A) of
the FDI Act (12 U.S.C. 5 1818(e) (7)(A)), Schindler shall take
such actions as are necessary to ensure that he and the
institution or agency specified in Section 8(e) (7)(A) of the FDI
Act markets derivatives transactions in a manner that is
consistent with safe and sound banking or business practices,
federal and state laws, and the rules and regulations of the
Board of Governors.
4. Schindler shall pay to the Board of Governors a
civil money penalty in the sum of $25,000.
No portion of
Schindler's civil money penalty shall be directly or indirectly
paid, advanced, reimbursed or otherwise funded by BTNYC or any
affiliate or subsidiary thereof.
5.
The penalty assessed by this Order shall be
remitted in full, at the time of Schindler's execution of this
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Order, payable to the "Board of Governors of the Federal
Reserve System" and forwarded with Schindler's executed copy of
this Order, to William W. Wiles, Secretary of the Board, Board of
Governors of the Federal Reserve System, Washington, DC
20551,
who shall make remittance of the same to the Treasury of the
United States as required by statute.
6.
All communicati ons regarding this Order shall be
sent to:
(a)
Ms. Christine M. Cumming
Senior Vice President
Federal Reserve Bank
of New York
33 Liberty Street
New York, NY 10045
and a copy to:
Martin Grant, Esq.
Legal Department
Federal Reserve Bank
of New York
33 Liberty Street
New York. NY 10045
(b)
Mr. Mark E. Schindler
c/o Frederick Schaffer, Esq
Schulte, Roth & Zabel LLP
900 Third Avenue
New York, NY 10022
7. The provisions
of this Order shall not bar, estop or
otherwise prevent the Board of Governors, the Reserve Bank or any
federal or state agency or department from taking any other
action affecting Schindler; provided, however, that the Board of
_5._
Governors
shall not take further action against Schindler, based
upon information
known to the Board of Governors
of this Order, in regards to the marketing
transactions.
as of the date
of financial
Schindler agrees and acknowledges
that this Order
does not bar or estop any criminal charges or prosecutions
against him, and Schindler hereby waives any right he might
otherwise have based upon this Order to assert a defense of
double jeopardy
8.
in any criminal proceeding.
Each provision of this Order shall remain effective
and enforceable
until stayed, modified,
terminated or suspended
by the Board of Governors.
By order of the Board of Governors
Reserve System, effective thisadhday
of
of the Federal
m&fch,
, 1997
BOARD OF GOVERNORS OF THE
FEDERAL RESERVE SYSTEM
Mark E. Schindler
Secretary of the Board
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