FINRA Fines Wall Street Access $125,000

Wall Street Access (WABR), a member of the Financial Industry Regulatory Authority (FINRA) since 1981, has recently agreed to pay a fine as part of a settlement with FINRA.

Between October 2019 and April 2021, Wall Street Access violated Rule 611(c) of Regulation National Market System (NMS) and FINRA Rule 2010. The firm failed to take reasonable steps to ensure that the ISOs it routed to certain market centers met the regulatory requirements for such orders. ISOs are designed to allow traders to execute transactions across multiple trading venues while bypassing certain price protection rules, making them a critical tool for maintaining market efficiency. However, improper handling of ISOs can lead to trade-throughs, which occur when a trade is executed at a price worse than the best available price.

In addition to ISO-related violations, Wall Street Access failed to establish and maintain an adequate supervisory system, including written supervisory procedures (WSPs), as required by Rule 611(a) of Regulation NMS and FINRA Rules 3110 and 2010. A robust supervisory system is crucial for preventing regulatory breaches, particularly in high-stakes trading environments. The firms shortcomings in this area not only exposed it to regulatory risk but also highlighted systemic weaknesses in its compliance infrastructure.

To resolve the matter, Wall Street Access agreed to a settlement that includes a censure and a $125,000 fine. Of this amount, $24,563.18 will be paid to FINRA, while the remaining balance will be distributed among various market centers, including the Cboe BYX Exchange, Cboe BZX Exchange, Cboe EDGA Exchange, Cboe EDGX Exchange, Investors Exchange, New York Stock Exchange LLC, NYSE Arca, and NYSE American LLC. This financial penalty serves as a reminder of the significant costs associated with regulatory non-compliance.