New OptionsEXpress Charges

Discussion in 'Wall St. News' started by Options12, Apr 19, 2012.

  1. Options12

    Options12 Guest

    April 19, 2012, 11:53 a.m. ET
    SEC Discloses New Charges On OptionsXpress, Former CFO


    The Securities and Exchange Commission said it charged a Chicago-based securities dealer affiliated with online brokerage firm optionsXpress with violating securities laws when it continued trading after delisting from the Chicago Board Options Exchange and deregistering with the SEC, apparently to avoid an audit.

    The SEC instituted administrative proceedings against OX Trading LLC, optionsXpress, and optionsXpress's former Chief Financial Officer, Thomas E. Stern, alleging that OX Trading operated as an unregistered dealer from October 2009 to November 2010 and illegally transacted in securities while not a member of a national securities association or national exchange from March 2009 to November 2010.

    According to the SEC's order, Stern terminated OX Trading's membership with the CBOE and ended the firm's broker-dealer registration with the SEC. Meanwhile, OX Trading continued to conduct trading through a customer account at optionsXpress.

    Earlier this week, the SEC charged optionsXpress, an online brokerage and clearing agency, as well as four of the firm's officials and a customer, in an alleged naked short selling scheme. Naked short-selling is when an investor sells stock without having the borrowed shares to deliver to the buyer. Stern, among others, was named in the charges.

    An optionsXpress spokesman was not immediately available for comment. The firm was acquired by Charles Schwab Corp. (SCHW) in September.

    -By Ben Fox Rubin, Dow Jones Newswires; 212-416-3108;
  2. The real issue is buried in this article at Reuters: "OptionsXpress shut down OX Trading in February in anticipation of the Volcker Rule, which bars proprietary trading by bank holding companies". Thank you Dodd-Frank, no more price improvement on option trades.