NASD Regulation Censures and Fines Interactive Brokers
For Market Systems Violations
WASHINGTON, April 18 /PRNewswire/ -- NASD Regulation, Inc., today
announced that it censured and fined Interactive Brokers, L.L.C., $230,000 for
multiple violations, including order routing, Order Audit Trail System (OATS)
reporting, record keeping and supervision violations. During a three-year
period Interactive Brokers violated NASD rules by mis-programming its order
routing system so that customer orders that were routed through Nasdaq's
SelectNet system to electronic communication networks (ECNs) were treated as
"non-negotiable," which means the essential terms of the order, including the
size, could not be changed. NASD rules prohibit non-negotiable orders from
being sent to ECNs and permit ECNs to reject them. In most cases, ECNs
exercised their right to reject them, due to difficulties in programming their
systems to accept this type of order.
Interactive Brokers also failed to submit Order Audit Trail System reports
in the manner required by NASD OATS rules. Interactive Brokers' record
keeping violations occurred as a result of its system programming which
retained certain required details concerning its routing of orders through
SelectNet for no more than one week. NASD rules require this data to be
retained for three years. Interactive Brokers' OATS and record keeping
violations spanned a 20-month period from August 1999 through April 2001.
Interactive Brokers also was ordered to revise its supervisory procedures
to ensure that future computer programming changes will result in the firm's
automated routing and execution system, OATS reports, and maintenance of
required books and records being in compliance with NASD and SEC rules.
Investors can obtain more information and the disciplinary record of any
NASD-registered broker or brokerage firm by calling 800-289-9999 or by sending
an e-mail through NASD Regulation's Web Site at nasdr.com .
The National Association of Securities Dealers, Inc. is the largest
securities industry, self-regulatory organization in the United States. It is
the parent organization of NASD Regulation, Inc.; the American Stock Exchange,
LLC; and NASD Dispute Resolution, Inc. For more information about the NASD
and its subsidiaries, please visit the following Web sites:
nasd.com ; nasdr.com ; amex.com ;
nasdadr.com . |
