A check of 2012 enforcement actions posted by FINRA shows few instances of monetary or regulatory sanctions against a firm that appears to be breaking post flash crash regulations such as the Stub Quote or Market Access rules.
Recent FINRA settlements also indicate serious allegations of market manipulation and post-crash rule breaking only warrant minor fines.
For instance, a late September fine brought by FINRA against Title Securities alleged the Chicago-based broker facilitated the unchecked and manipulative trading of its sole customer, Cyprus-based high frequency trading firm Hainy Investments.
While FINRA's complaint alleges Hainy Investments was able to use Title Securities to trade as much as three billion shares a month, oftentimes in a manner that used banned trading techniques to manipulate stock prices, the agency merely censured the brokerage and fined it a paltry $37,500.According to FINRA's allegations, Title Securities lacked anti-money-laundering compliance and had no surveillance on trades the firm brokered -- rule violations that ultimately led to the manipulation of stocks through erroneous trades. "FINRA also found that the firm received numerous inquiries from its clearing firm, as well as from FINRA, BATS, NYSE ARCA and NASDAQ concerning wash trading, odd lots and layering in the customer account. Despite being placed on repeated notice of potentially manipulative trading in the customer account, the firm failed to establish meaningful controls," the complaint states. "The firm never considered whether to file a
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