Archipelago Buying and selling Companies Inc. (ATSI), a Chicago-based broker-dealer, has agreed to pay $1.5 million to settle fees from the U.S. Securities and Alternate Fee (SEC) for failing to file lots of of Suspicious Exercise Studies (SARs) between August 2012 and September 2020. The settlement was introduced by the SEC on August 29, 2023.
ATSI, which operates an alternate buying and selling system (ATS) often called International OTC, was charged for its failure to file no less than 461 SARs associated to transactions in over-the-counter (OTC) securities. The SEC discovered that ATSI didn’t set up an anti-money laundering (AML) surveillance program till September 2020, regardless of executing 1000’s of high-risk microcap and penny inventory transactions day by day.
The absence of SARs, essential for figuring out doubtlessly unlawful actions like cash laundering and market manipulation, raises questions concerning the integrity of the monetary system. The SEC’s order states that ATSI violated Part 17(a) of the Securities Alternate Act and Rule 17a-8. As a part of the settlement, ATSI neither admitted nor denied the SEC’s findings however agreed to a censure and a cease-and-desist order. “All SEC-registered broker-dealers have the accountability to adjust to the necessities of the Financial institution Secrecy Act, together with the duty to file SARs,” stated Daniel R. Gregus, Director of the SEC’s Chicago Regional Workplace.
The failure to file SARs compromises market integrity and investor belief. SARs function an early warning system for doubtlessly unlawful actions, together with market manipulation techniques similar to spoofing, layering, wash buying and selling, and pre-arranged buying and selling.
The SEC’s motion serves as a cautionary story for broker-dealers and underscores the significance of regulatory compliance in sustaining market integrity.
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