Broker-Dealer Settles FINRA Charges for Overstating Advertised Trading Volumes

A broker-dealer settled FINRA charges for overstating its advertised trading volume and related supervisory failures.

According to its Letter of Acceptance, Waiver, and Consent, the broker-dealer rapidly bought and sold certain stocks in the open market which gave the impression of increased trading volume and affected trade rankings compared to other broker-dealers. FINRA found that some traders at the firm also falsely reported inflated trading volumes to media sources. During the relevant period, FINRA determined that the firm failed to adequately supervise the firm’s trading volume and compare it to the volume reported to third party publishing platforms.

As a result, FINRA found that the broker-dealer violated FINRA Rules 5210 ("Publication of Transactions and Quotations"), 2010 ("Standards of Commercial Honor and Principles of Trade"), 3110 ("Supervision") and 2010 over a five-year period.

To settle the charges, the broker-dealer agreed to a (i) censure and (ii) $1.25 million fine.