A broker-dealer settled NYSE Arca, Inc. and NYSE American LLC ("Exchanges") charges for supervisory failures in connection with partial tender offers.
In separate Letters of Acceptance, Waiver and Consent, the Exchanges found that the firm did not reasonably supervise the calculation of its net long position for the purpose of participating in the partial tender offer. The Exchanges alleged that the firm miscalculated its net long position by (i) missing a short position held in another system, and (ii) incorrectly treating its options positions. The Exchanges found that the firm failed to include a supervisory review regarding compliance with SEA Rule 14e-4 ("Prohibited Transactions in Connection with Partial Tender Offers").
As a result of these findings, NYSE Arca, Inc. determined that the firm violated SEA Rule 14e-4 and NYSE Arca Rule 11.18 ("Supervision") and NYSE American LLC determined that the firm violated SEA Rule 14e-4 and NYSE American Rule 320 ("Offices - Approval, Supervision and Control").
To settle the charges, the firm agreed to (i) a censure, (ii) a $100,000 fine, and (iii) a $218,803.52 disgorgement.
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