SEC settles with 14 firms on trading charges
The Securities and Exchange Commission on Wednesday settled a charge that 14 trading firms cheated customers out of millions of dollars.
The Securities and Exchange Commission on Wednesday settled a charge that 14 trading firms cheated customers out of millions of dollars.
The firms agreed to pay nearly $70 million combined in penalties tied to the case.
The SEC charged the firms with violating their obligation to serve public customer orders ahead of their own proprietary interests by trading ahead of customer orders placed or positioning the firms’ own accounts between customer orders. The firms are supposed to match customer orders with each other before being matched with proprietary orders. The complaints were tied to trading between 1999 and 2005, the SEC said in a statement.
By completing proprietary trades ahead of the customer trades, the customers’ trades were then completed at inferior prices, costing them millions of dollars, the SEC alleged.
Knight Financial Products LLC, Goldman Sachs Execution & Clearing LP, E-Trade Capital Markets LLC and TradeLink LLC were among those that settled the complaint.
The improper trades were executed on the American Stock Exchange, Chicago Board Options Exchange, Chicago Stock Exchange and Philadelphia Stock Exchange.
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