US SEC Fines More Firms For Trading Related Matters

The Financial Commission / Regulatory Actions / US SEC Fines More Firms For Trading Related Matters

In what now seems like a regular occurrence, the US Securities and Exchange Commission (SEC) has announced more fines levied against broker-dealers. This time the regulator has announced the settlement of administrative litigation against two Canadian firms, which purportedly provided “incorrect order-marking information” for customer trades.

In essence, the two hedge funds mislabeled more than 200 sales (sell) orders from clients with the executing broker. The transactions, worth roughly $600 million were incorrectly labeled as long (buy) orders. The regulator indicated that both companies did not admit or deny the SEC’s findings and agreed to pay fines.

The SEC order “finds that Cormark and ITG Canada caused the executing broker‘s violations of Rules 200(g) and 203(b)(1) of Regulation SHO of the Securities Exchange Act of 1934. Without admitting or denying the findings, Cormark and ITG Canada each agreed to cease and desist from committing or causing any violations and any future violations of Rules 200(g) and 203(b)(1) of Regulation SHO. In addition, Cormark agreed to pay a penalty of $800,000, and ITG Canada agreed to pay a penalty of $200,000.”

This is the latest case of large fines being levied against online brokerages, dealers, and hedge funds by US authorities in 2020, which look to be going after alleged wrongdoing in an effort to boost the regulatory agencies’ coffers in light of massive funding shortfalls for federal agencies due to the Covid-19 pandemic.

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