A broker-dealer settled NYSE charges for executing orders with more than one floor broker on the account of the same principal.
According to the Letter of Acceptance, Waiver and Consent, the broker-dealer had three accounts (a hedge fund, a proprietary trading firm and a proprietary desk) that were all considered to be of the same principal and, thus, under NYSE Rules, should have been sent to a single floor broker. As a result, the broker-dealer violated NYSE Rule 122 ("Orders with More than One Broker").
Additionally, the broker-dealer violated SEA Rule 15c3-5 ("Risk Management Controls for Brokers or Dealers with Market Access") for insufficient supervisory procedures relating to customer credit limits and erroneous order controls, as well as NYSE Rules 342 ("Compliance Supervisors") and 3110(a) and (b) ("Supervision").
To settle charges, the broker-dealer consented to a censure, a $50,000 fine and an undertaking to address the deficiencies identified.
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