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Long Arm of NYSE Hits Former Merrill Brokers

Three Merrill Lynch brokers who were booted from the firm amid market-timing charges in 2003 are now under investigation by the New York Stock Exchange, according to The Wall Street Journal.

Known as the "CBS Group," the triumvirate-Christopher Chung, Kevin Brunnock and William Savino-were accused of helping hedge fund clients improperly trade mutual funds.

This month, the NYSE fined ex-UBS branch manager John Borgese $50,000 for failing to supervise his three charges' market-timing practices in 2001. All three brokers lost their licenses in New Jersey.

In 2005, the NYSE fined Merrill Lynch $13.5 million for failure to stop the CBS group's trading. The exchange and New Jersey Bureau of Securities levied $49.5 million in fines on UBS.

Merrill was also ordered to pay the three brokers $15 million for sullying their reputations by the NYSE arbitration panel. That case is pending appeal in the New York State courts.

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