Firm Settles FINRA Charges For Best Execution Failures

A firm settled FINRA charges for failing to exercise reasonable diligence to ensure that it routed customer orders through venues that provided the best execution quality.

In a Letter of Acceptance, Waiver and Consent, FINRA stated that the firm prioritized the routing of marketable, non-marketable and odd lot equity orders to exchanges that paid for the order flow or paid the highest rebates. FINRA found that, for such orders, the firm's written supervisory procedures did not reasonably mandate an underlying execution quality analysis of competing markets, as required under FINRA Rule 5310 ("Best Execution and Interpositioning"). Additionally, FINRA stated that the firm failed to disclose in its Regulation NMS Rule 606 ("Disclosure of Order Routing Information") quarterly reports certain material information, such as the per share or order payments that it received from venues.