A broker-dealer settled FINRA charges for executing and introducing orders from a fund engaged in potentially manipulative trading.
According to FINRA, Clearpool Execution Services, LLC ("Clearpool") executed and introduced orders from a foreign, unregistered proprietary trading fund ("Fund X") that triggered "thousands" of FINRA surveillance alerts. Although Clearpool terminated trading access for hundreds of related individual traders, FINRA alleged that Clearpool continued to execute and introduce Fund X orders. FINRA also found that Clearpool's surveillance system was not reasonably designed to detect and prevent manipulative trading.
In addition, FINRA found that Clearpool failed to establish and enforce written procedures that would achieve compliance with FINRA rules. To settle the charges, Clearpool agreed to a censure and a fine of $473,000.
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