A U.S. brokerage firm and its former CEO have been sanctioned by U.S. securities regulators for violating self-regulatory organization (SRO) and exchange rules.
The Financial Industry Regulatory Authority (FINRA) announced that Samuel Lek, former CEO of Lek Securities Corp. has been permanently banned from the securities industry, and Lek Securities has been fined US$900,000 for violating various SRO and exchange rules for facilitating market access by foreign traders who engaged in manipulative trading on U.S. markets.
Lek and Lek Securities neither admitted nor denied the charges. They consented to the entry of the regulators’ findings.
FINRA said that the firm provided market access to traders who engaged in layering, spoofing and cross-product trading manipulation on U.S. equities and options markets.
FINRA and several exchanges — including Nasdaq, the NYSE and CBOE — found that Lek and his firm violated the U.S. Securities and Exchange Commission’s (SEC) market access requirements and failed to properly supervise their own business and reps.
“This case demonstrates that broker-dealers cannot turn a blind eye to their obligations under FINRA and exchange supervisory rules or under the SEC’s market access rule. Enforcing these rules against broker-dealer gatekeepers preserves the integrity of our securities markets,” FINRA and the exchanges said in a joint statement.
Along with the monetary penalties, the firm also agreed to certain foreign intra-day trading restrictions and an independent monitor.