Mistakes made in Chaotic New York Stock Exchange trading were the cause of improper trades, lawyers fro two former specialist traders have argued.

Lawyers for two former specialists at Van der Moolen Specialists USA LLC NV urged jurors not to convict their clients of securities fraud charges on Monday, saying the alleged improper trades were the result of mistakes made during a period of change and often chaotic trading at the New York Stock Exchange.
In his closing argument, David Meister, a lawyer for ex-Van der Moolen specialist Michael Stern, said the disputed trades were a “tiny fraction” of the thousands of trades made daily by Stern and were simply mistakes in properly sequencing orders, not the result of any criminal intent on Stern’s part.
Stern and former Van der Moolen specialist Michael Hayward have been accused of trading ahead of public orders for Van der Moolen’s account and improperly positioning themselves between public buy and sell orders at the Big Board.
“In school, if you get 99% right, you get an A-plus,” Meister said. “When you get 99% in the U.S. Attorney’s office, you get indicted.”
Hayward, 53 years old, and Stern, 55, each have been charged with conspiracy to commit securities fraud and three counts of securities fraud. They have denied wrongdoing.
Specialists match buyers and sellers at the NYSE, a unit of the publicly traded NYSE Group Inc. (NYX), and provide liquidity by buying or selling shares when there is an imbalance on the floor.
Hayward, who at one time was the specialist for Time Warner Inc. (TWX), and Stern, the former specialist for Pfizer Inc. (PFE) and Duke Energy Corp. (DUK), are the first of a group of former floor specialists accused of engaging in fraudulent and improper trading at the NYSE to go to trial. The men face a maximum of 20 years in prison on the securities-fraud charges.

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