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Archipelago Buying and selling Providers Inc. (ATSI), a Chicago-based broker-dealer, has agreed to pay $1.5 million to settle costs from the U.S. Securities and Trade Fee (SEC) for failing to file a whole lot of Suspicious Exercise Stories (SARs) between August 2012 and September 2020. The settlement was introduced by the SEC on August 29, 2023.
ATSI, which operates another buying and selling system (ATS) often called International OTC, was charged for its failure to file not 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 hundreds of high-risk microcap and penny inventory transactions each day.
The absence of SARs, essential for figuring out probably 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 Trade 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 probably unlawful actions, together with market manipulation techniques corresponding 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.
Picture supply: Shutterstock
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