NEW YORK -- Paine, Webber, Jackson & Curtis, the large Wall Street brokerage house, was censured and fined $300,000 Tuesday by the New York Stock Exchange in connection with the firm's giant paperwork-snarl earlier this year. The fine was the largest ever imposed on a member firm by the stock exchange.
Earlier this month, Paine Webber was also censured by the Securities and Exchange Commission for the back-office problems which occurred following its merger one year ago with Blyth, Eastman Dillon Co., which was one of the largest mergers ever to take place in the securities industry.
In imposing the penalties, the stock exchange alleged that during a period following the merger, Paine Webber 'engaged in conduct inconsistent with just and equitable principles of trade in that it provided inaccurate information to the press and to the exchange.'
The exchange cited various bookkeeping problems including failure to 'maintain its ledgers or other records so that they properly reflected all assets and liabilities and income accounts during February and March' and failure to complete the required quarterly 'securities count'. The firm was also charged with failing to maintain net capital requirements.
The SEC, in its censure order, said Paine Webber 'encountered processing and clearing problems' for a time after the merger, and that its books and records 'became substantially unreliable in major respects.'
But the SEC also noted that the firm has since made top management changes and has made a 'substantial committment to upgrade its operational systems.'
Paine Webber anticipated the exchange's ruling two weeks ago in its quarterly earnings statement, which showed a net loss of $6.9 million for fiscal 1980 due to the the firm's operational problems.
