A broker-dealer agreed to settle NASDAQ Stock Market LLC ("Nasdaq") charges of failing to "maintain a continuous two-sided trading interest . . . at prices within certain percentages away from the [National Best Bid or Offer]."
According to the Letter of Acceptance, Waiver and Consent, OTA LLC ("OTA") allegedly failed to meet its market maker-quoting obligations because it failed to "continuously quote in the security" due to an internal system error that shut down quoting. Nasdaq found that while OTA's written supervisory procedures identified a designated supervisor responsible for carrying out supervisory reviews, the procedures failed to indicate: (i) the supervisory steps to be taken by the designated supervisor, (ii) the frequency of supervisory reviews and (iii) how the reviews were to be recorded. As a consequence, Nasdaq found that the broker-dealer's supervisory system was not reasonably designed to ensure compliance with Nasdaq requirements.
To settle the charges, OTA agreed (i) to a censure, (ii) to pay a fine of $12,500 and (iii) to improve the firm's written supervisory procedures.
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