← Broker database 2025-04-22
SpeedRoute LLC Fined $300,000 for Market Access and AML Failures
According to FINRA, SpeedRoute LLC was censured and fined $300,000 (with $75,000 payable to FINRA) for failing to establish adequate risk management controls for market access and for anti-money laundering compliance deficiencies.
The Jersey City, New Jersey firm's market access control failures included inadequate credit controls—the firm did not consider each new client's financial condition when setting initial credit limits. Instead, it compared proposed limits against limits for existing clients without reasonable rationale or documentation supporting its methodology.
The firm also failed to maintain reasonable controls for erroneous orders, maximum order rates, and duplicate order rates. For surveillance of potentially manipulative trading including wash sales, layering, and spoofing, the firm used unreasonably designed parameters. For example, layering surveillance only generated alerts for seven or more potentially layered orders, though layering can be accomplished with fewer.
The firm's surveillance review was severely under-resourced. Despite thousands of monthly alerts, only one employee was assigned to review them while also handling other compliance duties. This resulted in delays of weeks or months in reviewing alerts, with some reviews never completed. The firm also used unreasonably narrow sampling methods.
The firm's AML program was not tailored to detect suspicious activity in low-priced securities, despite servicing accounts that traded such securities. When the firm decided to stop trading low-priced OTC securities, it inadvertently continued accepting such orders and failed to monitor the trading for suspicious activity.
A reduced fine was imposed after considering the firm's limited ability to pay.
This case illustrates the specialized compliance obligations for firms providing market access, including robust controls to prevent erroneous or manipulative trading.