September 10, 2014
SEC Charges Wedbush and Two Officials for Market Access Rule Violations
On June 6, 2014, the SEC announced charges against Wedbush Securities Inc. and two of its officials for violating the SEC’s market access rule (Exchange Act Rule 15c3-5). Wedbush Securities, a Los Angeles-based market access provider, was consistently ranked as one of the five largest firms by trading volume on NASDAQ.
September 10, 2014
FINRA Fines Goldman Sachs for Failing to Prevent Trade-Throughs on SIGMA-X System
On June 5, 2014, FINRA announced an $800,000 fine against Goldman Sachs for "failing to have reasonably designed written policies and procedures in place to prevent trade-throughs of protected quotations" in Sigma X, its dark pool. Dark pools allow investors to trade stocks anonymously and report trade data after the deals are completed. The price at which shares are offered for sale in dark pools is not visible to anyone, even those participating in them. These alternative trading systems have been criticized recently for their lack of transparency and because the rise of dark pools has reduced trading on exchanges that publicly quote prices, which could lead to less efficient pricing.