A broker-dealer settled FINRA charges for failing to comply with the Regulation SHO close-out requirement.
According to the Letter of Acceptance, Waiver and Consent, the broker-dealer (i) failed to close out 28 "fail-to-deliver" positions from short sales in a timely manner, as required by Rule 204(a), and (ii) improperly routed and executed 15 short sale orders by failing to arrange to borrow securities first, as required by Rule 204(b). In addition, FINRA found that the broker-dealer's supervisory and written systems were not sufficient to maintain compliance with SEC and FINRA rules.
To settle the charges, the broker-dealer agreed to (i) a censure and (ii) a fine of $80,000.
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