Broker-Dealer Settles FINRA Charges for Market Access Failures

A broker-dealer settled FINRA charges for failing to institute financial risk management controls when providing market access to affiliated organizations.

In a Letter of Acceptance, Wavier, and Consent, FINRA stated that the broker-dealer did not properly screen two affiliated organizations in a manner consistent with its financial risk management protocols prior to allowing market access to the affiliates.

FINRA concluded that the broker-dealer violated Exchange Act Section 15(c)(3) ("Registration and regulation of brokers and dealers") and SEA Rule 15c3-5 ("Risk management controls for brokers or dealers with market access"). FINRA also found that the broker-dealer violated FINRA Rule 3110(a) ("Supervision") and FINRA Rule 2010 ("Standards of Commercial Honor and Principles of Trade").

To settle the charges, the broker-dealer agreed to a censure and a $250,000 fine, paid jointly to the Nasdaq Stock Market LLC, FINRA and the NYSE Arca, Inc., of which $70,000 was allocated to FINRA.