Registered: Sep 2011
04-18-12 03:38 PM
Quote from babutime:
Good. Another set of douchebags out of the way...
These SHO violation cases are becoming more common. The penalties vary.
In 2011, FINRA fined UBS $12 million for SHO violations. This was the largest FINRA fine of 2011.
In February 2012, Interactive Brokers paid a $57,000 FINRA fine related to SHO.
In March 2012, Timber Hill paid a $15,000 FINRA fine for SHO violations
As a result of its supervisory failures, many of UBS' violations were not detected or corrected until after FINRA's investigation caused UBS to conduct a substantive review of its systems and monitoring procedures for Reg SHO compliance. FINRA found that UBS' supervisory framework over its equities trading business was not reasonably designed to achieve compliance with the requirements of Reg SHO and other securities laws, rules and regulations until at least 2009.
In concluding this settlement, UBS neither admitted nor denied the charges, but consented to the entry of FINRA's findings.
Interactive Brokers LLC (CRD #36418, Greenwich, Connecticut) submitted a Letter of Acceptance, Waiver and Consent in which the firm was censured and fined $57,500. Without admitting or denying the findings, the firm consented to the described sanctions and to the entry of findings that it had fail-to-deliver positions at a registered clearing agency in threshold securities for 13 consecutive settlement days, and failed to immediately thereafter close out the fail-to-deliver positions by purchasing securities of like kind and quantity. The findings stated that the firm transmitted reports to OATS that contained an inaccurate account type code, inaccurate special handling codes and/or incorrectly marked an order as long. (FINRA Case #2007010465601)
Timber Hill LLC (CRD #33319, Greenwich, Connecticut) submitted a Letter of Acceptance, Waiver and consent in which the firm was censured and fined $15,000. Without admitting or denying the findings, the firm consented to the described sanctions and to the entry of findings that it executed short proprietary sale orders in equity securities and failed to properly mark the orders as short, and executed some long proprietary sale orders in equity securities and improperly marked the orders as short. The findings stated that the firm accepted short sale orders in an equity security from another person, or effected a short sale in an equity security for its own account, without borrowing the security, or entering into a bona fide arrangement to borrow the security, or having reasonable grounds to believe that the security could be borrowed so that it could be delivered on the date delivery is due, and documenting compliance with SEC Rule 203(b)(1) of Regulation SHO. The findings also stated that the firm had a fail-to-deliver position at a registered clearing agency in a threshold security for 13 consecutive settlement days and failed to immediately thereafter close out the fail-to-deliver position by purchasing securities of like kind and quantity. The findings also included that the firm’s supervisory system did not provide for supervision reasonably designed to achieve compliance with Rule 203(a) of Regulation SHO, in that the firm did not have WSPs in place related to Rules 200(a) and 203(a) of Regulation SHO. The written supervisory system also did not provide for supervision reasonably designed to achieve compliance with Rule 203(b)(1), in that the firm’s supervisory system did not provide a means to determine that there were sufficient shares available for borrowing for the equity securities identified on its easy-to-borrow lists. The firm’s written supervisory system was not reasonably designed to achieve compliance with Rule 203(b)(3) of Regulation SHO, in that the firm’s supervisory system did not include WSPs providing for review of the steps taken by the firm’s trading personnel in closing out its fail-to-deliver positions, and the firm failed to provide documentary evidence that it performed the supervisory reviews set forth in its WSPs concerning Rule 200(g) of Regulation SHO. (FINRA Case #2005003200701)