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22.02.2016 | 16:27
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Punishment in American style: TOP defaulters from the SEC

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Who and why paid US securities regulator millions in fines.

StockWorld.com.ua reported last week about the largest disclosure of crimes in the US stock market. So, the whole world had known that Barclays and Credit Suisse would pay to regulators $154 million as a fine for violating federal securities laws, in particular, for operating alternative trading systems known as dark pools. Securities and Exchange Commission (SEC) and the New York Attorney General’s office announced that they have reached an agreement with the banks about the arrangement of the regulator’s claims.

According to the SEC, the total fine for Barclays amounts to $ 70 million. Credit Suisse will pay to regulators $84.3 million. It is the largest fine for banks for providing the services to clients about anonymous

The total fine for Barclays amounts to $ 70 million. Credit Suisse will pay to regulators $84.3 million. It is the largest fine for banks for providing the services to clients about anonymous OTC trading.

OTC trading. According to the investigation, Barclays and Credit Suisse for a long time disguised the information about the use of funds under the dark liquidity pools, as well as functioning of the OTC platforms, in particular, in mechanisms of getting information, orders handling and other issues.

StockWorld using data of Securities and Exchange Commission has researched the history of the major investigations against participants of American securities market, as well as the sky-high amount of the sanctions imposed against them. Who, how and why paid the fines you can read in our review.

Before the case of Barclays and Credit Suisse, the «leaders» in «the largest penalty» category were the companies ITG INC (dark pool operator) and ALTERNET SECURITIES (affiliated broker-dealer). Law enforcement officers had imposed a sanction against them in the amount of $20.3 million for the operation of a secret trading desk that accessed confidential data about dark pool customers. This case took place in August 2015.

In January 2015, the SEC fined UBS SECURITIES LLC for the fact that the investment bank did not inform all clients about an order type that gave advantage to orders from market makers and high-frequency traders. The amount of the settlement was $14,4 million.

Every such fine from the SEC grows and grows from case to case.

Previous two cases happened in the summer 2014. So, in July, the regulator punished LAVAFLOW INC. (CITIGROUP UNIT and the ATS operator) for failing the protection of customers by allowing the affiliate to access and use those customer’s confidential trading information. The amount of the settlement was $5 million. In June LIQUIDNET Inc. failed to protect dark pool by allowing marketing and sales employees access to the customers’ confidential trading data. It costed $2 million.

For the same offense was punished another company eBX LLC in October 2012. The penalty imposed, by the SEC, was $0,8 million.

A year earlier, in October 2011, PIPELINE TRADING SYSTEMS LLC had been convicted by a regulator in misleading dark pool customers about how the trading platform would match their orders. The amount of the settlement was $1 million.

As we can see, every such fine from the SEC grows and grows from case to case. It is very interesting, when Ukrainian regulator will be able to apply such high-scale penalties towards violators of securities laws.

References in the article: sec, barclays, credit suisse
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