NOTE: Stipulations of Fact and Consent to Penalty (SFC); Offers of Settlement (OS); and Letters of Acceptance Waiver, and Consent (AWC) are entered into by Respondents without admitting or denying the allegations, but consent is given to the described sanctions & to the entry of findings. Additionally, for AWCs, if FINRA has reason to believe a violation has occurred and the member or associated person does not dispute the violation, FINRA may prepare and request that the member or associated person execute a letter accepting a finding of violation, consenting to the imposition of sanctions, and agreeing to waive such member's or associated person's right to a hearing before a hearing panel, and any right of appeal to the National Adjudicatory Council, the SEC, and the courts, or to otherwise challenge the validity of the letter, if the letter is accepted. The letter shall describe the act or practice engaged in or omitted, the rule, regulation, or statutory provision violated, and the sanction or sanctions to be imposed.

First NewYork Securities, L.L.C.; Larry Chachkes; and Joseph Eric Edelman
AWC/2005000796001

Acting through Chachkes, Edelman and others, the Firm sold securities short during the five business days before the pricing of public offerings and then engaged in covering transactions with shares from public offerings in violation of SEC Rule 105: Short selling in connection with a public offering. 

The Firm’s supervisory system 

• failed to provide for adequate and reasonable supervision of the individual representatives’ activities, and its supervisory system and written procedures did not provide for supervision reasonably designed to achieve compliance with and prevent violations of SEC Rule 105. 
• did not include written supervisory procedures providing for a statement of the steps to be taken by the responsible person in connection with SEC Rule 105 supervision. 

The Firm 

• provided inaccurate information in response to a FINRA inquiry, which was caused by its failure to have in place adequate supervisory procedures reasonably designed to ensure that the firm provided responsive information to regulatory inquiries;
• failed to make and preserve books and records, in conformity with SEC and FINRA rules; 
• order tickets did not reflect the correct price, lacked time stamps or contained inaccurate time stamps; and
• failed to preserve brokerage order memoranda for a period of not less than three years, the first two in an accessible place. 

First NewYork Securities, L.L.C.: Censured; Fined $170,000; Ordered to disgorge $171,504.44 in unlawful profits; Required to revise its written supervisory procedures to achieve compliance with, and prevent violations of, Securities and Exchange Commission (SEC) Rule 105, and to include the supervisory steps to be taken by the responsible person in connection with SEC Rule 105 supervision.

Larry Chachkes:Censured; Fined $30,000

Joseph Eric Edelman: Censured; Fined $50,000