Nasdaq Fines SpeedRoute $450,000 for Market Access and Supervision Violations
18 Gennaio 2022 - 8:00PM
The Nasdaq Stock Market, LLC (“Nasdaq”) today announced that it
censured SpeedRoute LLC (“SpeedRoute”) and fined the firm $450,000
for violating various provisions of Rule 15c3-5 of the Securities
Exchange Act of 1934 (known as the Market Access Rule) over a
nearly five-year period, from January 2017 through November 2021.
As a result of these violations, the Firm failed to prevent the
transmission of numerous erroneous orders, resulting in the filing
of 30 clearly erroneous execution petitions.
SpeedRoute provides broker-dealer clients access to trading on
Nasdaq and other exchanges. During the relevant time period, while
executing millions of trades totaling billions of shares on Nasdaq
alone, SpeedRoute failed to establish, document, and maintain a
system of risk management controls and supervisory procedures
reasonably designed to prevent the entry of erroneous orders from
clients and to prevent the entry of orders that exceed appropriate
pre-set credit thresholds for clients. In addition, SpeedRoute
failed to establish a system for regularly reviewing its risk
management controls and for conducting the annual review and
certification required by the Market Access Rule.
Among other issues, during part of the review period, the Firm
failed to apply certain of its erroneous order controls and all of
its credit limit controls to any of its clients. This was caused,
in part, by an erroneous system setting and an error in market data
integration, both of which resulted in the operational failure of
those controls. While SpeedRoute learned that these controls were
not functional in the fourth quarter of 2018, and before it fully
resolved the underlying issue over a year later, the firm continued
to send orders to Nasdaq during which time SpeedRoute failed to
establish additional controls or safeguards to control the risks
involved, or to alert Nasdaq.
“As a gatekeeper providing access to our market for its clients,
SpeedRoute plays a critical role in protecting investors and market
integrity,” said John Zecca, Chief Legal & Regulatory
Officer of Nasdaq. “In this case, SpeedRoute failed in its
obligations for an extended period of time and as a result we are
holding the firm accountable.”
In settling this matter, SpeedRoute neither admitted nor denied
the charges, but consented to the entry of Nasdaq’s findings and
the sanctions.
About the Nasdaq Investigations and Enforcement
Department
The Nasdaq Stock Market, LLC (“Nasdaq”) is a self-regulatory
organization required by the Securities Exchange Act of 1934 to
enforce its broker-dealer members’ compliance with federal
securities laws and rules as well as its own rules. In 2019, the
U.S. Securities and Exchange Commission approved Nasdaq’s request
for Nasdaq’s Investigations and Enforcement Department to assume
responsibility for certain investigative and enforcement functions
for trading activity on Nasdaq’s equities and options markets. This
work had previously been performed on Nasdaq’s behalf by the
Financial Industry Regulatory Authority, Inc., or FINRA. The SEC’s
approval expanded Nasdaq’s regulatory responsibilities, which
previously included investigative and enforcement work for Nasdaq’s
affiliated exchanges, options and equity surveillance, membership
qualification, and qualifying companies for initial and continued
listing.
About Nasdaq
Nasdaq (Nasdaq: NDAQ) is a global technology company serving the
capital markets and other industries. Our diverse offering of data,
analytics, software and services enables clients to optimize and
execute their business vision with confidence. To learn more about
the company, technology solutions and career opportunities, visit
us on LinkedIn, on Twitter @Nasdaq, or at www.nasdaq.com.
Nasdaq Media Relations Contact:
Will Briganti+1.646.964.8169william.briganti@nasdaq.com
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