Rel. No. 41943 / September 29, 1999
Admin. Proc. File No. 3-8721

       In the Matter of the Application of       :
               JONATHAN FEINS                    :
              Campground Road                    :
                P.O. Box 126                     :
             Wilmot Flat, NH  03287              :
        For Review of Action Taken by the        :
           AMERICAN STOCK EXCHANGE, INC.         :



Violations of Exchange Rules

Conduct Detrimental to the Interest or Welfare of the Exchange -- Failing to Capture Time-of-Trade Information

Fraud -- Favoring One Customer Over Others

Failing to Report Trades

Conduct Inconsistent with Just and Equitable

Principles of Trade -- Executing Trades in a Secret, Non-competitive Manner

Executing Discretionary Trades

Former independent broker, formerly a regular member of a registered national securities exchange, failed to capture accurate time-of-trade information on order tickets; defrauded customers by giving executions that should have gone to them to a favored customer instead; failed to ensure that trades he initiated printed; and executed discretionary trades. Held, exchange's findings of violation are sustained in part and set aside in part, and sanctions imposed are sustained.


Jonathan Feins, pro se.

Stephen L. Lister, Philip J. Axelrod, and Suzanne E. Auletta, for the American Stock Exchange, Inc.

Appeal filed: April 22, 1997

Last brief received: August 1, 1997


Jonathan Feins, a former regular member of the American Stock Exchange, Inc. ("AMEX" or the "Exchange") and a former independent or "two-dollar" broker, 1 appeals from AMEX disciplinary action. The AMEX found that, between May 3 and September 16, 1989, Feins violated three provisions of the Exchange's constitution, three Exchange rules, and one provision of the Floor Transactions Handbook. The AMEX found that Feins engaged in conduct detrimental to the interest or welfare of the Exchange by failing to capture accurate time-of-trade information on his order tickets, in violation of Article V, Section 4(j) of the Exchange's constitution. The AMEX also found that Feins violated Article V, Section 4(b) of the Exchange's constitution by engaging in a device, scheme, or artifice to defraud certain two-dollar brokerage customers. Those customers were defrauded, the AMEX found, for the benefit of Feins's customer John Rizzuto, a limited trading permit holder who conducted market making activities for Catania & Co. ("Catania"). 2 The AMEX found that the fraud consisted of trading for Catania's account ahead of the orders of other customers and switching profitable trades belonging to other customers into Catania's account.

The AMEX further found that Feins violated AMEX Rules 123 and 151, and Part 3, C.1 of the Floor Transactions Handbook, by executing trades in a secret, non-competitive manner and by failing to report those trades for dissemination through the Options Price Reporting Authority System in order to conceal the trades from other market participants. 3 The AMEX also found that this conduct was inconsistent with just and equitable principles of trade, in violation of Article V, Section 4(h) of the Exchange's constitution. Finally, the AMEX found that Feins executed discretionary trades in the Catania account, in violation of AMEX Rule 103(c) prohibiting such trading. The AMEX censured Feins, barred him for three years from membership or association in any capacity with any AMEX member or member organization, and fined him $50,000.

Feins was first charged with the violations set forth above in August 1992. After a hearing, an Exchange Disciplinary Panel found him guilty of all charges and imposed sanctions. 4/ Feins appealed to the Exchange's Board of Governors, which summarily affirmed the action taken by the Panel. Feins appealed the Board's decision to us. We found ourselves unable to discharge our review function properly because we could not discern from the Panel's decision the basis on which the AMEX found violations and therefore could not determine whether the sanctions imposed on Feins were justified. We remanded for a more complete statement of the Exchange's findings. 5

On remand, the Disciplinary Panel again found Feins guilty of all charges. It again imposed as sanctions a censure, a three-year bar, and a $50,000 fine. Feins once again appealed to the Board of Governors, which unanimously affirmed the Panel's findings and sanctions. Feins's appeal of this Board action is before us now. We base our findings on an independent review of the record.


To support all of the violations charged, the AMEX presented evidence regarding 16 sets of related trades executed by Feins. In 11 instances, the AMEX found that Feins engaged in a pattern of trading that disadvantaged his other customers for Rizzuto's benefit. 6 While we have reviewed all of the trades, because there is a similar pattern of trading for these 11 sets of trades, we discuss only one set -- the May 3, 1989 trades in XMI May 485 call options -- as illustrative. 7

On May 3, 1989, Feins was holding an order to buy 50 contracts in XMI May 485 call options for Seth Lubin, who made a market in XMI options. 8 At approximately 10:24 a.m., Feins executed a purchase of 50 contracts at 1 1/8. Rather than filling Lubin's order by allocating all 50 contracts to him, however, Feins gave only 35 to Lubin -- scratching through the "50" on Lubin's order ticket and writing in "35" -- and allocated the other 15 to John Rizzuto, although he had no order ticket from Rizzuto to buy the contracts. 9 This transaction "printed," i.e., it was entered by a reporter on the ticker tape.

Feins filled the remainder of Lubin's order to buy 50 contracts by crossing trades between Rizzuto and Lubin, one for 10 contracts at 1 1/4 and one for 5 contracts at 1 3/8, although he had no order ticket from Rizzuto to sell the contracts.

Feins wrote up a new order ticket to show Lubin's purchase of the 15 contracts, but he failed to record the time of either the 10-contract or the 5-contract purchase on the ticket. 10 Feins represented both Lubin and Rizzuto in these transactions and

was thus the only broker in a position to report them for printing. 11 Neither of these trades printed. 12

Lubin paid $250 more to acquire the 15 contracts from Rizzuto than he would have paid if all 50 of the contracts purchased at 1 1/8 had been allocated to him. Rizzuto made a profit of approximately $250 on the transactions. Rizzuto's purchase and sale of the 15 contracts was his only activity in these options between April 28 and May 26. 13

The trades in which the AMEX found fraudulent conduct by Feins showed the same three-step process as the May 3 trades. First, Feins received an order from a customer other than Rizzuto. Second, Feins executed a trade in the open market for the amount of that order, but allocated all or part of the trade to Rizzuto. This first trade was properly reported and printed. Third, Feins crossed the allocation to Rizzuto back to the original customer who had ordered the trade, at a profit to Rizzuto but at a price inferior to what the customer would have gotten in the open market. This second trade did not print. Consequently, Feins's other customers paid more (if they were buying) or received less (if they were selling) than they should have, and Rizzuto profited at their expense.


A. The AMEX charged Feins with violating Article V, Section 4(j) of the AMEX constitution, which proscribes conduct detrimental to the interest or welfare of the Exchange, based on his failure to capture accurate time-of-trade information on his order tickets. Feins does not dispute that he repeatedly failed to record this information, although he knew that AMEX rules required him to do so. He argues, however, that this is merely a technical violation of a requirement to which the Exchange generally does not attach much importance.

Recording time-of-trade information accurately is an important part of maintaining an audit trail. The audit trail, in turn, is a key element of an effective market surveillance system. By making it easier to detect market manipulation and other irregularities, audit trail systems make an important contribution to investor protection. Information preserved in the audit trail also helps a self-regulatory organization ("SRO") such as the AMEX comply with its statutory obligations to carry out the purposes of the federal securities laws and to enforce compliance by members and associated persons with those laws, rules and regulations thereunder, and Exchange rules. 14 Indeed, as discussed later, Feins's failure to record trade times accurately has hampered our analysis of the violations charged here. We thus conclude that Feins's failure to record time-of-trade information was detrimental to the interest or welfare of the AMEX within the meaning of Article V, Section 4(j) of the AMEX constitution.

B. The AMEX also charged Feins with violating Article V, Section 4(b) of the Exchange's constitution, which proscribes fraud and fraudulent acts, based on his alleged trading ahead of the orders of certain customers in favor of Catania's account. 15 As discussed below,we find that the pattern of Feins's trading demonstrates that he violated this provision.

Each time he accepted an order from a customer, Feins became that customer's agent for the purpose of filling the order. As agent, Feins was obligated to act solely for his customer's benefit, and in his customer's best interests, in completing the transaction. 16 By accepting the orders, Feins implicitly represented that he would act in accordance with these obligations. 17 If he acted otherwise, and did not disclose this to his customers, his conduct was fraudulent. 18

Feins repeatedly allocated to Rizzuto all or part of trades that should have been used to fill orders of other customers, even though Rizzuto had not placed orders for those securities. Then, Feins crossed the part allocated to Rizzuto back to the customer who originally placed the order, but at a price that benefitted Rizzuto and disserved the other customer. Thus, Feins was using his other customers' orders as a means of creating trading profits for Rizzuto. Moreover, Feins sought to conceal this conduct by changing information on order tickets or writing superseding order tickets. These attempts at concealment show that Feins was aware his conduct was wrongful.

Feins's failure to ensure that his trades printed also helped to conceal his trading scheme. Normally, after a member announces a trade to the trading crowd, the floor reporter captures the information, and the trade then prints. On occasion, a trade may go unprinted because a reporter does not happen to be present when it is announced, or does not hear the announcement. Here, however, Feins often executed trades with other members of the crowd, which printed, and crossed trades between Rizzuto and another customer, which did not print. Feins's argument that reporters may not have been present to capture his crossed trades is not plausible, since his trades with other crowd members were captured. 19 Moreover, the unreported trades were repeatedly those by which Rizzuto profited at the expense of the customer who originally placed the order. This pattern compels the conclusion that Feins deliberately failed to make the crossed trades known as part of his effort to conceal his conduct.

Taken together, the facts demonstrate a concerted and recurring effort on the part of Feins to defraud customers by giving Rizzuto trades at superior prices that should have gone to other customers. The consistent trading patterns permit no other conclusion.

Feins argues that his conduct cannot be interpreted as a "grand scheme of fraud and deceit" because the trades in question were infrequent and involved relatively small profits. As a busy trader in an active options pit, he contends, he could have structured similar trades many times a day if he had intended to act fraudulently. That may be, but the mere fact that Feins could have orchestrated a larger fraud hardly immunizes him from the consequences of a smaller one. We reject the argument that Feins's conduct was innocent or merely negligent.

Feins argues that the AMEX did not introduce enough evidence that he benefitted from his conduct to establish the scienter element of the fraud charge. But showing financial benefit is not the only way to establish scienter. Here, the evidence that Feins deliberately concealed his conduct from the Exchange established that he knew his conduct was wrongful.20 We therefore need not analyze whether the AMEX's evidence of financial benefit would have been adequate to support this conclusion.

Feins argues that the professional traders who were his customers did not complain to the AMEX that they were disadvantaged. Their failure to complain does not exonerate Feins. The record does not establish the reasons for their silence. It may well be that Feins succeeded in concealing his trades, so that the customers did not know they had a basis for complaint. Whatever the reasons for the customers' silence, the record amply establishes the existence and extent of Feins's fraud.

We thus conclude that Feins's conduct violated Article V Section 4(b) of the AMEX constitution.

C. The AMEX also charged Feins with violating Part 3, C.1 of the AMEX Floor Transactions Handbook, which imposes upon a member who initiates a trade the obligation to see that the trade is printed. Since Feins represented both buyer and seller in his cross trades, there can be no doubt that he initiated the trades. He therefore had an obligation to ensure that the trades were printed. We find that the pattern described above demonstrates that Feins specifically avoided this obligation by failing to report trades for capture by a reporter.

D. The AMEX also charged Feins with violating Article V, Section 4(h) of the AMEX constitution, which proscribes conduct inconsistent with just and equitable principles of trade. This charge was based specifically on his alleged execution of trades in a secret, non-competitive manner and his failure to report trades. Feins argues that the evidence does not support the charge, because there is no evidence that he intentionally concealed trades. As noted above, we find that there is ample evidence that Feins's conduct went beyond a mere inadvertent failure to execute trades openly and report them properly, and instead amounted to intentional concealment. We agree with the Exchange that the evidence supports the charge and that the conduct violated Article V, Section 4(h).21

E. The AMEX also charged Feins with executing discretionary trades in the Catania account in violation of AMEX Rule 103(c), which prohibits AMEX regular members from executing transactions with respect to which they have discretion as to (1) the choice of a security to be bought or sold, (2) the amount of any security to be bought or sold, or (3) whether a transaction is to be a purchase or a sale. Again, the circumstantial evidence that Feins violated this rule is compelling in light of the overall pattern of his trading activity.

As discussed above, Feins frequently traded a certain number of contracts in a certain options series for Rizzuto at the very same time he was trading that same number and series of contracts for another customer. Sometimes there was no order ticket showing that Rizzuto instructed Feins to make a trade; at other times, tickets were altered by substituting Rizzuto's clearing firm for one previously written or by reducing the number of contracts originally allocated to a customer so that contracts were allocated to Rizzuto. In still other cases, an order ticket for Rizzuto's account was written after Feins had written a ticket for another customer for the same transaction. 22In one case, Feins traded U.S. Steel options for Rizzuto's account even though Rizzuto, as a limited trading permit holder, was prohibited from making such trades. 23Feins also executed several trades for Rizzuto when Rizzuto was not on the trading floor. 24 We thus conclude that Feins did not execute these trades pursuant to instructions from Rizzuto; instead, Feins exercised discretion over the Catania account, taking advantage of opportunities as they arose. In so doing, he violated AMEX Rule 103(c).

Feins argues that the Exchange failed to prove that there was a "pattern" of discretionary trading. A Rule 103 violation need not be based on a pattern; a single instance of discretionary trading would be enough to establish a violation. Here, the evidence supports findings of numerous instances of discretionary trading. The AMEX did not charge, and did not need to find, that these instances were part of a pattern.

F. Finally, the AMEX charged Feins with violating two AMEX rules that require Exchange members to announce bids and offers publicly. Rule 123 requires that bids and offers be made in such a manner as to make their existence generally known. Rule 151 requires that a member offer a security at the minimum fraction of trading above an established bid price or bid the minimum fraction of trading below an established offered price before crossing customer orders.

In essence, Rule 151 requires a broker to seek a better deal for his customer than the current bid or offer prices would provide, and Rule 123 requires the broker to do so in a way that makes the proposed transaction generally known. By announcing an offer above the established bid or a bid below the established offer, the broker invites members of the crowd to effect a trade at a price beneficial to his customer rather than simply making a trade at the published quote.

The AMEX found that Feins executed several crossed trades for Rizzuto at prices outside the market. If these findings were correct, they would provide strong circumstantial evidence that Feins did not execute these trades in compliance with Rules 123 and 151.

We cannot sustain these findings because the record does not establish exactly when the trades in question occurred. As we found above, Feins often did not record trade times on his order tickets, and he failed to report many of his trades. Our inability to determine when the trades were executed makes it impossible for us to tell whether they were outside the market.


Feins argues that the AMEX must show beyond a shadow of a doubt that the allegations against him are true, and that "[i]f there is any chance that [his] explanations are possible" the charges must be dismissed. He complains that the only proof of his misconduct is "conclusionary" testimony by the AMEX official who led the investigation that resulted in the charges, and that the Exchange failed to gather enough information in its investigation because it failed, for example, to interview his customers, other traders, and reporters, and failed to do a sufficiently detailed analysis of trading records.

The standards Feins cites are not applicable to this proceeding. The applicable standard of proof is preponderance of the evidence.25 The Exchange was required to make a prima facie showing of misconduct; after it had done so, Feins had the burden of going forward with any defense. 26

As shown above, the AMEX introduced extensive evidence establishing its prima facie case. Once the AMEX had established its case, it was incumbent on Feins to introduce whatever evidence he thought would disprove that case. For example, if he believed that the testimony of customers or other Exchange members, or a more detailed analysis of trading records, would have supported his defense, he should have gathered and introduced that evidence himself. Instead, Feins offered unsubstantiated theories about what might have happened -- for example, that the trades in the Catania account might have been made by a clerk who returned the order tickets to Rizzuto after the trades. 27 This was not sufficient to defeat the Exchange's case.

Feins also argues that the Exchange did not give him notice of the full scope of the conduct that allegedly violated the provisions charged. He contends that he had no reason to expect the AMEX to introduce evidence at the hearing about any trades other than those listed in an attachment to the Statement of Charges, which listed only seven of the 16 trades reviewed at the hearing.

Administrative due process is satisfied where the party against whom the proceeding is brought understands the issues and is afforded a full opportunity to meet the charges during the course of the proceeding.28 In general, "administrative pleadings are very liberally construed," and courts accord agencies considerable latitude when interpreting charging documents. 29 Thus, "the question on review is not the adequacy of the . . . pleading but is the fairness of the entire procedure." 30

In this case, the Statement of Charges described the conduct at issue and specified when it took place. It also identified the Catania account as involved in the trades under consideration. This provided Feins with enough notice to let him prepare a defense. 31

Moreover, the AMEX provided Feins with a set of exhibits more than ten days before the hearing began. These exhibits contained entries from the AMEX Daily Options Journal and corresponding order tickets for the 16 sets of trades discussed at the hearing. 32 Feins had ample opportunity to review the materials, note which trades were under consideration, and refine his defense. 33 Finally, while the trades that were not listed in the Statement of Charges provided further examples of the violative conduct originally charged, the AMEX advanced no new theories of violation based on those trades. 34

Feins argues that, when the AMEX Board of Governors was considering his case on remand, the entire record in the six-respondent disciplinary proceeding should have been sent to the Board of Governors for review, rather than only selected materials. Although the entire record was not mailed to the Board, the Governors received portions of the record and had the opportunity to review a copy of the entire record as it related to all six respondents before the meeting at which Feins's appeal on remand was to be discussed. This was an adequate basis for review. 35

Finally, Feins argues that the opinion written by the AMEX on remand does not fully address the concerns set forth in our remand order. Our reason for remanding the case was that we could not discern from the initial opinion why the AMEX found violations and therefore could not determine whether the sanctions imposed were justified. The opinion on remand discusses in detail the trades involved in the conduct at issue and identifies the evidence that supports the AMEX's findings. Based on this fuller explanation, we have no difficulty understanding the bases for the AMEX's conclusions and discharging our review function.


Feins argues that the sanctions imposed on him are more severe than those imposed in similar AMEX cases. As we have consistently held, the appropriate sanction depends on the

facts and circumstances of each particular case; it often cannot be precisely determined by comparison with action taken in other proceedings. 36 Our review of the sanctions imposed by the AMEX is limited to determining whether those sanctions are excessive or oppressive, or whether they impose an unnecessary or inappropriate burden on competition. 37

Although we set aside the AMEX's findings of violation

of Rules 123 and 151, the remaining violations -- which we sustain -- are serious ones. By failing to record accurate trade times and failing to report trades, Feins created gaps in the audit trail, thus making the AMEX's market surveillance more difficult. By scheming to give Rizzuto profitable trades that should have gone to other customers, he defrauded those

customers. These were not isolated violations, but occurred repeatedly over a period of over four months. The sanctions imposed by the AMEX are neither excessive nor oppressive; we sustain them.

An appropriate order will issue. 38

By the Commission (Chairman LEVITT and Commissioners JOHNSON, HUNT, CAREY and UNGER).

Jonathan G. Katz

before the

Rel. No. 41943 / September 29, 1999
Admin. Proc. File No. 3-8721

       In the Matter of the Application of       :
               JONATHAN FEINS                    :
              Campground Road                    :
                P.O. Box 126                     :
             Wilmot Flat, NH  03287              :
        For Review of Action Taken by the        :
           AMERICAN STOCK EXCHANGE, INC.         :


On the basis of the Commission's opinion issued this day, it is

ORDERED that the findings of violation of Article V, Sections 4(b), 4(h), and 4(j) of the constitution of the American Stock Exchange (the "Exchange"); of Rule 103(c) of the Exchange; and of Part 3, C.1 of the Exchange's Floor Transactions Handbook made by the Exchange against Jonathan Feins be, and they hereby are, sustained, and that the findings of violation of Rules 123 and 151 of the Exchange be, and they hereby are, set aside; and it is further

ORDERED that the sanctions imposed by the Exchange against Jonathan Feins be, and they hereby are, sustained.

By the Commission.

Jonathan G. Katz


-[1]- An independent floor broker executes orders for other exchange members for a fee -- originally two dollars for 100 shares of stock.

-[2]- Catania is a former AMEX member firm in which Rizzuto was a general partner.

-[3]- Rule 123 requires, in relevant part, that bids and offers be made "in such a manner . . . as to make the existence thereof generally known." Rule 151 requires, in relevant part, that an Exchange member holding a customer order to buy and a customer order to sell the same security "must offer such security at the minimum fraction of trading above a bid price which he has established or bid the minimum fraction of trading below an offered price which he has established before making a transaction between the customers whose orders he holds." Part 3, C.1, in relevant part, imposes upon a member who initiates a trade the obligation to see that the trade is "printed," or reported on the ticker tape.

-[4]- John Rizzuto and four other respondents were also charged with violations related to trading that benefitted Rizzuto. Rizzuto and one other respondent did not respond; they were found guilty of all charges. Two other respondents were found not guilty, and one was found guilty of only one of five violations charged. Only Feins appealed.

-[5]- Jonathan Feins, Securities Exchange Act Rel. No. 37091, 61 SEC Docket 2114 (April 10, 1996). In remanding, we expressed no view concerning the adequacy of the then-existing record to support the charges alleged, but noted that "[t]he size of the record suggests that the Exchange in fact conducted an extensive investigation." Id., 61 SEC Docket at 2116 n.3. The AMEX did not conduct further hearings or examine additional evidence on remand.

-[6]- The pattern of trading is repeated in two additional sets of trades. However, it does not appear that the AMEX relied on these trades in finding fraud. Accordingly, we are precluded from finding fraud as to these two sets of trades, although the similarity of the pattern provides further circumstantial support for the fraud findings as to the other trades.

The trades that the AMEX did not use to establish fraudulent conduct were the bases for the other violations charged, including discretionary trading, failure to record time-of-trade information, secret execution of trades, and failure to report crossed trades.

-[7]- All but one set of the trades at issue were in various series of AMEX XMI (Major Market Index) options. The Major Market Index is a price-weighted index of 20 stocks that represent a broad range of industries; it is designed to measure the performance of the blue-chip sector of the market. Amex Derivative Services, et al., Directory of Exchange Listed Options 81 (June 1998).

An XMI option series is identified by (1) the expiration month, (2) the exercise price, and (3) whether the option is a put or a call. Thus, the XMI May 485 calls were call options with an exercise price of $485 that would expire on the third Friday in May.

-[8]- Index options are traded in units called contracts.

-[9]- Other instances in which Feins altered order tickets include the June 23 trades in U.S. Steel June 535 call options, the June 23 trades in XMI July 465 puts, and the July 17 trades in XMI July 495 puts. For some other trades, Feins did not alter the ticket he had originally written, but instead made out a matching order ticket for Rizzuto that superseded one he had originally written for another customer.

-[10]- There were numerous tickets for other trades on which Feins did not record time-of-trade information, or recorded incorrect information. Feins concedes that he often failed to record such information.

-[11]- Only the party that initiates a trade is required to report the trade for printing. Since Feins represented both sides of the crossed trades, there can be no doubt that he initiated those trades and was therefore responsible for reporting them.

-[12]- Other instances in which trades executed by Feins between Rizzuto and another member of the trading crowd printed, while cross trades that Feins executed for Rizzuto and another customer did not, include the June 23 trades in XMI July 465 puts, the July 17 trades in XMI July 495 puts, and the August 10 trades in XMI August 545 calls.

-[13]- Similarly, Feins's August 24 trades for Rizzuto in XMI September 535 calls, which involved the purchase and sale of 56 contracts, took place during a two-week period when there was almost no activity in the Catania account.

-[14]- Section 6(b)(1) of the Securities Exchange Act of 1934, 17 U.S.C. ? 78f(b)(1). See also Section 6(b)(5) of the Exchange Act, 17 U.S.C. ? 78f(b)(5) (Exchange rules must be designed, among other things, "to prevent fraudulent and manipulative acts and practices, [and] to promote just and equitable principles of trade").

-[15]- "Trading ahead" usually refers to a market maker's execution of an order for its own account ahead of a customer's order at the same price. Although the trades here were allocated to Rizzuto rather than to Feins himself, the customers who ordered and should have gotten the trades were nonetheless defrauded.

The AMEX also referred to Feins's "switching" profitable trades into Catania's account. We understand this term to be another attempt to describe the same conduct that the AMEX called "trading ahead": Feins gave to Rizzuto trades that should have gone to other customers.

-[16]- Restatement (Second) of Agency ? 387 (1958).

-[17]- Cf. Atlanta-One, Inc., 52 S.E.C. 161, 164 (1995) ("'Inherent in the relationship between a dealer and his customer is the vital representation that the customer will be dealt with fairly, and in accordance with the standards of the profession.'" (quoting Duker & Duker, 6 S.E.C. 386, 388-89 (1939) (footnote omitted)), aff'd, 100 F.3d 105 (9th Cir. 1996); E.F. Hutton & Co., 49 S.E.C. 829, 832 (1988) (customer "was entitled to expect that industry practice would comport with fiduciary principles," absent evidence that existence of practice contrary to such principles was so universal and overt that investor could not reasonably entertain such expectation).

-[18]- Cf. Duker & Duker, 6 S.E.C. at 388-89 (dealer that implicitly represents to customer that customer will be dealt with fairly, then knowingly deals with customer unfairly, commits fraud).

-[19]- The AMEX held with respect to two other respondents in the disciplinary proceeding that the evidence did not support a finding of violation of the rule requiring reporting of trades. The Panel found that the Exchange did not introduce sufficient evidence that reporters were present to record those trades, nor did it establish that those respondents were initiating brokers who therefore were required to report the trades.

-[20]- See Peter W. Schellenbach, 50 S.E.C. 798, 802 (deliberate intent to conceal from regulators establishes bad faith), aff'd, 989 F.2d 907 (7th Cir. 1993).

-[21]- The AMEX found that Feins's failure to report executed trades also constituted conduct detrimental to the interest or welfare of the Exchange in violation of Article V, Section 4(j) of the AMEX constitution. This conduct, however, was charged only as a violation of Article V, Section 4(h). We therefore do not consider whether it also violated Section 4(j).

-[22]- Feins argues that the use of "pressure mark" evidence -- indentations made on one ticket by the pressure of a pen writing on a ticket immediately above it -- cannot be relied upon to show which ticket was written first. Based on our examination of the original order tickets introduced by the AMEX at the hearing, we find that it is in some instances possible to use these "pressure marks" to determine that one ticket was written before another.

-[23]- Article IV, Section 1(j)(3) of the AMEX constitution provides, in relevant part, that "a limited trading permit holder may not trade in individual stock options listed on the Exchange."

Feins argues that the June 23 trades in U.S. Steel June 535 call options were not shown to have involved trading ahead or switching trades. It is clear from the AMEX opinion on remand that the AMEX did not rely on those trades to establish Feins's fraudulent conduct. Nor do we. Our findings regarding fraud are based on trades by Feins for Rizzuto in XMI options.

-[24]- Feins argues that the AMEX did not prove that Rizzuto was not on the floor during a two-week period in late August and early September. The Exchange introduced account statements showing that there was very little activity in the Catania account during those two weeks. A witness also testified that trading records of other market participants did not show Rizzuto to have been in the crowd during that period. This is enough to establish, by a preponderance of the evidence, that Rizzuto was not there.

-[25]- E.g., Steadman v. SEC, 450 U.S. 91 (1981); Seaton v. SEC, 670 F.2d 309, 311 (D.C. Cir. 1982).

-[26]- Franklin N. Wolf, 52 S.E.C. 517, 524 n.34 (1995).

-[27]- Feins argues that he was not responsible for the clerk's actions. The AMEX did not base its findings against Feins on any acts or omissions of the clerk. Nor do we.

-[28]- NLRB v. Mackay Radio & Telegraph Co., 304 U.S. 333, 350 (1938); Aloha Airlines, Inc. v. CAB, 598 F.2d 250, 262 (D.C. Cir. 1979); Thomas E. Warren, III, 51 S.E.C. 1015, 1019 n.18 (1994), aff'd, 69 F.3d 549 (10th Cir. 1995) (Table).

-[29]- National Realty & Construction Co. v. OSHRC, 489 F.2d 1257, 1264 (D.C. Cir. 1973).

-[30]- Aloha Airlines, 598 F.2d at 262 (quoting 2 K. Davis, Administrative Law Treatise, ? 8.04 (1958) (ellipsis in original)). Accord, NLRB v. International Brotherhood of Electrical Workers, Local Union 112, 827 F.2d 530, 534 (9th Cir. 1987); Thomas E. Warren, III, 51 S.E.C. at 1019 n.18.

-[31]- It also satisfied Article V, Section 1(b) of the AMEX constitution, which requires that the statement of charges "shall specify the charge or charges . . . with reasonable detail."

-[32]-The Daily Options Journal contains information from the ticker tape as well as additional information about trades obtained through the clearance and settlement process.

-[33]-The hearing took place on eight days, spread over more than three months. Feins was not questioned about the trades at issue until the third day of the hearing, five weeks after the hearing commenced.

-[34]- The AMEX opinion indicates that the Panel regarded Feins's secret execution of and failure to report trades as a violation of AMEX Rule 958(b), which imposes upon registered traders the obligation to engage in a course of dealings reasonably calculated to contribute to the maintenance of a fair and orderly market. (As discussed above, this conduct was also charged as violating Article V, Section 4(h) of the Exchange's constitution, AMEX Rules 123 and 151, and Part 3, C.1 of the Floor Transactions Handbook.) Because Feins was not charged with violating Rule 958, any discussion as to whether his conduct violated that rule is irrelevant. There is no indication that the AMEX considered Rule 958 in imposing sanctions.

-[35]- Several exhibits were not available for Board review on remand, apparently because the AMEX neither retained copies when it sent the record to us during Feins's initial appeal nor asked us to return the originals after we remanded. The Board was informed at the appeal hearing that if any Governor felt the need to examine any of those materials, the hearing would be postponed so that they could be obtained.

All but one of the exhibits that were not made available to the Board pertained to respondents other than Feins. Feins has not shown that these exhibits were relevant to the case against him. The only exhibit that pertained to Feins consisted of two cartons of order tickets introduced by Feins at his initial hearing before the AMEX panel. Each box contained thousands of tickets, in no particular order: Feins had not even removed the tickets showing executions by other people, which he did not contend were relevant. Feins stated that those tickets in the cartons that showed his executions, however, would show that he often changed customer and quantity notations on his tickets, that he made many cross trades away from Rizzuto, and that the cross trades involving Rizzuto were not the only ones that did not print.

Feins's arguments are of no avail. As we explained above, the case against Feins is persuasive because the AMEX proved a pattern of conduct in which Feins favored Rizzuto at the expense of other customers and sought to conceal his conduct. The facts that some other tickets also may have been changed and some other trades may not have printed do not effectively rebut the AMEX's contentions. If Feins believed an analysis of the tickets would help his case, it was incumbent upon him to perform the analysis and present the results rather than simply introducing masses of evidentiary raw material and making broad general assertions about what it might show.

-[36]- See, e.g., Butz v. Glover Livestock Commission Co., 411 U.S. 182, 187 (1976); Edward C. Farni II, Exchange Act Rel. No. 34106 (May 25, 1994), 51 S.E.C. 1118, 1120 n.11 (citing cases). We note, however, that although the cases on which Feins relies involved lower fines, they involved lengthier bars than the one imposed on him.

-[37]- See Section 19(e)(2) of the Exchange Act, 15 U.S.C.78s(e)(2).

-[38]- We have considered all the arguments advanced by the parties. They are rejected or sustained to the extent that they are inconsistent or in accord with the views expressed in this opinion.