Firm Settles NYSE American Charges for Recordkeeping Failures

A firm settled NYSE American ("NYSE") charges for failing to accurately record data on manual options order memoranda and for failing to maintain an adequate supervisory system.

According to the Letter of Acceptance, Waiver and Consent, the firm "failed to accurately record order receipt or transmission times" on order memoranda for roughly 1,500 manually routed options orders over a nearly three-year period. 

NYSE determined that although the firm’s supervisory procedures required recording order receipt and transmission times, the firm lacked "a system to identify order records that erroneously reflected" entry or routing times instead of actual timestamps. NYSE stated that the firm’s supervisory procedures "failed to provide reasonable guidance" on when or how to correct inaccurate receipt and transmission times for manually routed orders to floor brokers. NYSE also found that the firm's supervisory system was not designed to detect and correct inaccuracies in manual options order memoranda. NYSE stated that although the firm conducted limited weekly and monthly reviews to confirm time sequencing, the process failed to capture orders with receipt and transmission times that were sequential but still inaccurate.

The NYSE charged the firm with violations of Exchange Act Section 17(a) ("Records and Reports"); Exchange Act Rule 17a-3 ("Records to be made by certain exchange members, brokers and dealers"), and NYSE American Rules 956NY ("Record of Orders"), 320(e) ("Offices—Approval, Supervision and Control") and 324 ("Books and Records"). 

To settle the charges, the firm agreed to (i) a censure, (ii) a fine of $150,000.