FINRA, Exchanges and the SEC Fine Broker-Dealer More Than $5.9 Million for Manipulative Trading, Anti-Money Laundering, and Other Violations (with Lofchie Comment)

FINRA (along with NYSE Arca, NASDAQ, NASDAQ OMX BX, and BATS) announced that they have censured and fined Hold Brothers On-Line Investment Services, LLC (a New York-based self-clearing broker-dealer) $3.4 million for a number of violations including manipulative trading activities and failure to comply with anti-money laundering requirements. Hold Brothers primarily operates as a day-trading firm by facilitating direct market access (largely foreign, primarily Chinese) customers.

It appears that a major part of the manipulation involved the firm attempting to trick the trading algorithms of other firms.

In a related case, the SEC also announced a settlement with Hold Brothers.

Lofchie Comment: The FINRA disciplinary action is a pretty good read as to the kinds of nefarious activities that are going on in cross-border cash-market trading. It has definite movie potential with the possibility of exotic locations, bad guys, computer geeks, and heroic market regulators.

View news release here (links externally to FINRA website). See also: FINRA - Hold Brothers On-Line Investment Services, LLC ActionNYSE Arca, Inc. - Hold Brothers On-Line Investment Services, LLC Action NASDAQ Stock Market LLC - Hold Brothers On-Line Investment Services, LLC Action NASDAQ OMX BX, Inc. - Hold Brothers On-Line Investment Services, LLC Action BATS Exchange, Inc. - Hold Brothers On-Line Investment Services, LLC Action