← Broker database 2025-01-16
Wall Street Access Fined $125,000 for Regulation NMS Trade-Through Violations
According to FINRA, Wall Street Access has been censured and fined $125,000 for violating Rule 611(c) of Regulation NMS by failing to take reasonable steps to ensure its intermarket sweep orders (ISOs) met regulatory requirements.
The firm handles large, not-held orders from broker-dealers and executes trades as principal. When executing trades at prices that would trade through protected quotes at other venues, the firm relies on the Outbound ISO Exception. However, three separate systems issues with the firm's order management system resulted in approximately 1,900 trade-throughs.
The firm's supervisory system was not reasonably designed to prevent trade-throughs. Although the firm revised procedures after receiving a FINRA warning, it only reviewed the relevant reports monthly rather than in real time. This delay allowed configuration issues to go undetected, causing additional trade-throughs.
When the firm discovered that its order management system did not have destination codes for new exchanges that began quoting NMS stocks, it continued using ISOs for approximately five months after discovering the non-compliance, causing approximately 430 additional trade-throughs.
Regulation NMS trade-through rules ensure investors receive the best available prices. When firms fail to properly route orders, investors may receive inferior execution prices. The firm has since hired additional operations staff and now reviews compliance reports daily.