Broker-Dealer Fined for Aggregation Unit Violations

A broker-dealer settled FINRA charges for miscalculating net securities positions for two of its aggregation units.

In a Letter of Acceptance, Waiver and Consent, FINRA found that the broker-dealer included the accounts of non-broker-dealer affiliates in its calculations of the two aggregation units instead of calculating the net position of each account within the aggregation unit and separately calculating the net position of each non-broker-dealer affiliate.

FINRA determined that the broker-dealer violated FINRA Rule 2010 ("Standards of Commercial Honor and Principles of Trade"), Rule 3110 ("Supervision") and Rule 200(f) of SEC Regulation SHO ("Definition of 'short sale' and marking requirements"). To settle the charges, the broker-dealer agreed to (i) a censure, (ii) a civil monetary penalty of $1,500,000 and (iii) undertakings to improve its supervisory controls with respect to Regulation SHO.