Tradition Securities and Derivatives LLC has concurred to a settlement involving a penalty of £104,000 ($140,000) with the Financial Industry Regulatory Authority (FINRA). The fine emanates from a series of regulatory oversights that spanned across several months.
Between January and September 2020, Tradition did not properly document transmission times on its order tickets, contravening the Securities Exchange Act of 1934 (Exchange Act) § 17(a), Exchange Act Rule 17a-3, and FINRA Rules 4511 and 2010. Furthermore, from April 13 to 17, 2020, the firm failed to accurately specify the exchange of execution on its order tickets.
Moreover, Tradition did not set up adequate regulatory risk management controls and supervisory procedures to guarantee that suitable surveillance personnel receive immediate post-trade execution reports resulting from market access. This oversight has been ongoing since January 2020 and breaches Exchange Act § 15(c)(3), Exchange Act Rules 15c3-5(b) and (c), and FINRA Rules 3110 and 2010.
The firm also fell short in demonstrating that it conducted an annual review of its business activity concerning market access in 2020, infringing upon Exchange Act § 15(c)(3), Exchange Act Rule 15c3-5(e), and FINRA Rule 2010.
In 2020, Tradition submitted a CEO certification that did not affirm that the firm’s risk management controls and supervisory procedures were in compliance with paragraphs (b) and (c) of Exchange Act Rule 15c-5, nor that the firm conducted an annual review of its business activity in connection with market access. This violation goes against Exchange Act § 15(c)(3), Exchange Act Rule 15c3-5(e), and FINRA Rule 2010.
As part of the settlement, Tradition has agreed to a censure in addition to the fine. The firm has also committed to an undertaking that a senior management member, who is a registered principal of the firm, will certify in writing that the firm has remedied the issues. This certification will confirm that Tradition has implemented a supervisory system, including written supervisory procedures, designed to achieve compliance with Exchange Act § 15(c)(3), Exchange Act Rules 15c3-5(b) and (c)(2)(iv), and FINRA Rules 3110 and 2010.