Broker Dealer Fined for Failing to File SARs

A broker-dealer settled SEC charges for failing to file Suspicious Activity Reports ("SARs") on "suspicious transactions that were executed on its Alternative Trading System."

In an Order, the SEC stated that the broker-dealer, who "operate[d] and provide[d] trading access for other broker-dealers to its over the counter equity securities platform," failed to file at least 461 SARs as required by the Bank Secrecy Act. The suspicious activity concerned potentially unlawful manipulative trading, including spoofing, layering, wash trading and pre-arranged trading.

As a result, the broker-dealer violated Exchange Act Section 17(a) ("Records and Reports") and Rule 17a-8 ("Financial recordkeeping and reporting of currency and foreign transactions") thereunder.

To settle the charges, the broker-dealer agreed to (i) cease and desist from committing further regulatory violations, (ii) a censure and (iii) pay a civil money penalty of $1,500,000.