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ARTICLE · 11 JANUARY 2021

Firm Settles FINRA Charges For Options Position Violations

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A firm settled FINRA charges for effecting opening transactions in a stock option contract that exceeded the applicable options position limits, and for related supervisory system failures.

United StatesFinance and Banking
Hogan Lovells Cadwalader
Hogan Lovells Cadwalader
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A firm settled FINRA charges for effecting opening transactions in a stock option contract that exceeded the applicable options position limits, and for related supervisory system failures.

According to the Letter of Acceptance, Waiver and Consent, the firm was alerted to the options position limit overage by its clearing firm after four days. FINRA found that the firm had no reports that identified position limit overages, and that its written supervisory procedures lacked a system of supervisory review with regard to exceeding an options position limit. As a result, the firm violated FINRA Rules 2360(b)(3) ("Options; Position Limits"), 3110 ("Supervision") and 2010 ("Standards of Commercial Honor and Principles of Trade").

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