SEC In Year 2000 Crackdown

The Securities and Exchange Commission has charged 37 brokerage firms with failing to fully report on their computer systems' preparedness for conversion to the year 2000, SEC enforcement director Richard Walker said today.

The names of the firms were not immediately available. The cases mark the first time regulators have taken enforcement actions related to the year 2000 disclosure requirement.

Brokerage firms were required to file a year 2000 disclosure form with the SEC by Aug. 31. The firms charged failed to file all or part of the form, the SEC said.

Nineteen of the 37 firms charged have agreed to settlement offers, consisting of a cease and desist order, a censure, and civil penalty ranging from $5,000 to $25,000. Fines from settled cases total $235,000.

In a related move, NASD Regulation Inc. announced that it has brought actions against 59 member firms for late filing of the necessary information on year 2000 readiness.

Concerns about the date stem from the fact that some computer systems may read only the last two digits of a four-digit year and interpret the year 2000 as 1900, potentially wreaking havoc on financial transactions.