SROs Sanction Newedge for Supervisory, Regulation SHO, and Records Violations

FINRA - along with BATS Exchange, New York Stock Exchange, NYSE Arca, and the NASDAQ Stock Market - announced that they have censured and fined Newedge USA for failing to supervise trading by clients that directly accessed U.S. equities markets through Newedge's order routing platform and internet service providers or routed orders directly to market centers. In addition, Newedge also violated Reg SHO and SEC Emergency Orders concerning short sales, and failed to obtain and retain books and records.

The SROs found that Newedge did not have sufficient procedures, adequate surveillance tools, or necessary information to monitor direct market access and sponsored access client trading. Newedge's supervisory violations occurred over an extended period, during which internal documents noted the firm's deficiencies. FINRA alleges that even after these "red flags" were raised, Newedge did not take adequate steps to satisfy its supervisory obligations.

See: FINRA Press Release.