NEW YORK STOCK EXCHANGE, INC. 

SOURCE CITE

NYSE Rule 346(b)
'34 Act Section 17(a)
NYSE Rule 440

RR engaged in unauthorized outside hedge fund business activity and recommended unapproved investment; failure to disclose outside activities.  Censured, 6 month suspension in all capacities, and  $5,000 fine.

RR Badgley submitted a Stipulation of Facts and Consent to Penalty to the NYSE, which was accepted by the Hearing Panel as set forth below.

RR was employed with NYSE member firm Howe, Barnes Investment, Inc. and was terminated upon firm's determination with his failure to disclose outside activities.  RR recommended that four customers invest in two Russian hedge funds.  Such recommendations were furthered by his introduction to the funds' manager and his transmission of correspondence with enclosed materials.  RR was an investor in one of the funds. 

NYSE Rule 346(b) required that RR make a prior written request and receive prior written consent from his employer before engaging in such outside activity.  Additionally, on an annual basis Badgley was required to disclose to his employer any outside business activities, any personal outside investments, and any use of unauthorized sales literature.  For three years he falsely answered "no" to the relevant questions on his employer's annual questionnaire.

Badgley was censured, suspended for six months in all capacities, and fined $5,000.

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