The National Association of Securities Dealers announced that it has ordered New York\u2019s BRUT LLC to pay US$2.2 million for a variety of rule violations, mainly relating to its order execution reports.
The violations relate to the publication of erroneous order execution quality reports, backing away from the firm\u2019s posted quotes, failure to maintain two-sided quotations, failure to comply with the rules applicable to trade-throughs and locked and\/or crossed markets, non-retention of emails, OATS deficiencies and inadequate supervision.
In addition to the fine, BRUT agreed to revise certain of the firm\u2019s written supervisory procedures within 30 days. In settling this case, BRUT neither admitted nor denied the charges, but consented to the entry of the NASD\u2019s findings.
The regulator said that BRUT\u2019s erroneous order execution reports related to orders sent to the firm\u2019s electronic trading system. BRUT\u2019s share of monthly Nasdaq trading volume amounted, at times, to more than 13% of Nasdaq executions, it noted.
\u201cMonthly order execution reports provide data that must be made public under federal securities regulations,\u201d said NASD senior executive vice president Stephen Luparello. \u201cBRUT\u2019s inaccurate reports compromised the ability of the investing public and other market participants to accurately assess execution quality and compare venues for execution.\u201d
The NASD found that from October 2001 – shortly after the requirement to publish order execution reports took effect – through July 2005, BRUT published execution reports that contained critical errors. The effect of the errors contained in BRUT\u2019s execution reports varied, the NASD said. Certain errors may have resulted in certain execution quality statistics appearing to be better than was actually the case. Other errors may have resulted in execution quality statistics appearing to be either better or worse than was actually the case. The regulator also found other regulatory violations by the firm.<\/p>\n","protected":false},"excerpt":{"rendered":"
BRUT published order execution reports with critical errors for almost five years<\/p>\n","protected":false},"author":2,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":[],"categories":[2312,2324],"tags":[2814],"yst_prominent_words":[],"acf":[],"_links":{"self":[{"href":"https:\/\/www.investmentexecutive.com\/wp-json\/wp\/v2\/posts\/313201"}],"collection":[{"href":"https:\/\/www.investmentexecutive.com\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.investmentexecutive.com\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.investmentexecutive.com\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.investmentexecutive.com\/wp-json\/wp\/v2\/comments?post=313201"}],"version-history":[{"count":0,"href":"https:\/\/www.investmentexecutive.com\/wp-json\/wp\/v2\/posts\/313201\/revisions"}],"wp:attachment":[{"href":"https:\/\/www.investmentexecutive.com\/wp-json\/wp\/v2\/media?parent=313201"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.investmentexecutive.com\/wp-json\/wp\/v2\/categories?post=313201"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.investmentexecutive.com\/wp-json\/wp\/v2\/tags?post=313201"},{"taxonomy":"yst_prominent_words","embeddable":true,"href":"https:\/\/www.investmentexecutive.com\/wp-json\/wp\/v2\/yst_prominent_words?post=313201"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}