A firm settled NYSE American charges for engaging in anticipatory hedging after acquiring undisclosed information regarding an imminent option transaction.

In a Letter of Acceptance, Waiver, and Consent, NYSE American found that one of the firm's traders inappropriately purchased shares of a security underlying an option after learning from a soliciting broker the "material terms and conditions" of an imminent order of the option before the order was available in the trading crowd. NYSE American also found that the firm's supervisory system for detecting anticipatory hedging or front running was not reasonably designed as it contained a coding issue that excluded approximately 61 symbols from its surveillance, including that of the security in question.

As a result of its findings, NYSE American determined that the firm violated NYSE American Rules 995NY(c) ("Anticipatory Hedging and Front Running") and 320(e) ("Supervision").

To settle the charges, the firm agreed to a censure and a $55,000 fine.

Primary Sources

  1. NYSE American AWC: Barclays Capital Inc.

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