Bad Brokers

According to FINRA, Deutsche Bank Securities, Inc. was fined $2 million for failing to comply with its obligation to seek best execution for customer orders from January 2014 through May 2019.

The firm owned and operated an alternative trading system (ATS) called SuperX. When routing customer ord...

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According to FINRA, Deutsche Bank Securities, Inc. was fined $2 million for failing to comply with its obligation to seek best execution for customer orders from January 2014 through May 2019.

The firm owned and operated an alternative trading system (ATS) called SuperX. When routing customer orders to exchanges through its smart order router, the firm routed customers' marketable orders to SuperX before routing to exchanges, unless customers opted out. This SuperX ping" created inherent delays for orders not fully executed in the firm's ATS

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Deutsche Bank Securities did not modify its routing arrangement. The firm also failed to reasonably consider how price improvement for SuperX ping orders compared to price improvement opportunities for orders routed directly to exchanges.

the firm routed more orders to SuperX than any other dark pool during some of the period. However

the firm's supervisory system was not reasonably designed because it failed to reasonably review certain factors in the best execution rule. The firm's supervisory procedures failed to provide reasonable guidance on conducting reviews or circumstances warranting routing modification.

providing only non-specific disclosures about potential trading rebates without details regarding amounts.

it violates this fundamental obligation."

According to FINRA, a FINRA extended hearing panel expelled Alpine Securities Corp. from FINRA membership and ordered the firm to pay more than $2.3 million in restitution to customers for converting and misusing customer funds and securities, engaging in unauthorized trading, charging unfair prices...

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According to FINRA, a FINRA extended hearing panel expelled Alpine Securities Corp. from FINRA membership and ordered the firm to pay more than $2.3 million in restitution to customers for converting and misusing customer funds and securities, engaging in unauthorized trading, charging unfair prices and unreasonable fees, and making an unauthorized capital withdrawal.

Alpine Securities was one of the largest clearing firms in the United States until 2018. Due to increased clearing-related, compliance, and legal expenses, its profits declined precipitously in 2018, making it difficult to continue its retail securities business. The firm contended it advised customers in August 2018 that it would stop carrying retail accounts and impose additional fees, including a $5,000 monthly account fee, on retail customers who did not close their accounts.

The hearing panel found that Alpine Securities provided minimal notice of its business plan change and additional fees. Because of a back-office system change, reduced staffing, and an inadequate telephone system, customers encountered difficulties reaching the firm and logging into their accounts online.

The panel found that: the $5,000 monthly account fee, 1 percent per day illiquidity and volatility fee, and $1,500 certificate withdrawal fee were unreasonable and the $5,000 fee was applied discriminatorily; the firm's appropriation of customer positions valued at $1,500 or less for one penny per position and 2.5 percent market-making/execution fee resulted in unfair prices and commissions; the firm converted and misused customer funds and securities by removing customer securities improperly deemed abandoned" and "worthless" and seizing customer securities to cover debits related to excessive and unreasonable fees; the firm engaged in unauthorized trading by moving customers' securities from customer accounts to firm accounts without authorization to cover outstanding debits and because it improperly identified securities as "worthless

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000 monthly fee. Most customers were not even aware of the fee

imposing unreasonable fees and seizing customer assets without authorization."