NEW YORK - Several former New York Stock Exchange traders who oversaw stock auctions on the floor face indictment Tuesday on charges that they traded to benefit their firms at the expense of their customers, people familiar with the matter told The Wall Street Journal.

The criminal probe by federal prosecutors in New York City grew out of a civil case against the seven firms that employ the traders, known as specialist firms. Without admitting or denying wrongdoing, those NYSE specialist firms last year paid a total of $247 million to settle charges that their employees interfered with customer orders or put them aside, usually for just a few crucial seconds, so they could trade their firm's own money, taking advantage of their knowledge of which way the market was moving.

The Securities and Exchange Commission also is expected to file civil securities-fraud charges against a bigger group of more than a dozen former specialists, including onetime employees of four of the Big Board's five major specialist firms, people familiar with the matter said. They are Bank of America Corp.'s (BAC) Fleet Specialists unit; Van der Moolen Holding NV's Van der Moolen Specialists USA ; Goldman Sachs Group Inc.'s (GS) Spear, Leeds & Kellogg; and Bear Stearns Cos.' (BSC) Bear Wagner.

In a rare move, the SEC also is expected to file and settle charges against the New York Stock Exchange for allegedly not properly policing floor traders.

The cases represent one of the most wide-ranging enforcement actions against NYSE specialists in years. As many as 10 individual specialists could face criminal charges, people familiar with the probe said. Individuals who worked at Fleet, Bear Wagner and Van der Moolen are expected to surrender to federal authorities Tuesday morning, the people said. David N. Kelley, the U.S. attorney in Manhattan, also plans to hold a news conference on the matter, according to people familiar with the probe.

-Wall Street Journal Staff Reporters Kara Scannell and Aaron Lucchetti contributed to this article. Dow Jones Newswires 04-12-05 0451ET Copyright (C) 2005 Dow Jones & Company, Inc. All Rights Reserved.