The US financial regulator targeted TD Securities in a
crackdown on alleged market manipulation. The SEC charged the firm with
manipulating the US Treasury market using a practice known as spoofing.
Besides this, the regulator charged TD Securities for
failing to supervise its head trader, who allegedly executed hundreds of
illegal trades over a 13-month span, leading to substantial fines and
penalties.
SEC Charges Against TD Securities
SEC announced charges against TD Securities (USA) LLC,
accusing the firm of manipulating the US Treasury cash securities market
through spoofing. Spoofing involves placing false buy or sell orders with no
intention of executing them to manipulate market prices for financial gain.
The regulator mentioned in its notice that between
April 2018 and May 2019, a TD Securities trader entered non-bona fide orders to
influence prices and obtain better execution for genuine
orders.
“Manipulative and deceptive trading undermines the
integrity of our markets,” Mark Cave, Associate Director in the SEC’s Division
of Enforcement, said. “Broker-dealers and other firms cannot ignore their
employees’ manipulative conduct and must take meaningful steps to detect and
prevent it. Today’s action results from our continuing commitment to combating
illicit trading.”
The trader’s actions allegedly led to profits for TD
Securities, a practice the regulator mentioned continued across hundreds of
trades during a 13-month period. Once the trader achieved the desired price,
the non-bona fide orders were promptly canceled, leaving the market unaware of
the true intention behind the orders.
Supervision Failures
The SEC’s investigation also highlighted TD
Securities’ shortcomings in overseeing its traders. The firm reportedly failed
to scrutinize the Head of its US Treasuries trading desk despite warnings about
potentially irregular trading activities. The failure to adequately supervise the trader and
implement appropriate trading controls compounded the severity of the
violations, according to the SEC.
TD Securities consented to the SEC’s findings without
admitting or denying the allegations. The firm agreed to several penalties,
including paying a total civil penalty of $6.5 million, a disgorgement of
$400,000, and a prejudgment interest.
The SEC’s investigation involved a collaborative
effort with multiple entities, including the DOJ’s Criminal Division and FINRA. Members of the SEC’s Division of Enforcement, along with specialists from the Division of Economic and Risk Analysis, conducted the detailed probe.
The US financial regulator targeted TD Securities in a
crackdown on alleged market manipulation. The SEC charged the firm with
manipulating the US Treasury market using a practice known as spoofing.
Besides this, the regulator charged TD Securities for
failing to supervise its head trader, who allegedly executed hundreds of
illegal trades over a 13-month span, leading to substantial fines and
penalties.
SEC Charges Against TD Securities
SEC announced charges against TD Securities (USA) LLC,
accusing the firm of manipulating the US Treasury cash securities market
through spoofing. Spoofing involves placing false buy or sell orders with no
intention of executing them to manipulate market prices for financial gain.
The regulator mentioned in its notice that between
April 2018 and May 2019, a TD Securities trader entered non-bona fide orders to
influence prices and obtain better execution for genuine
orders.
“Manipulative and deceptive trading undermines the
integrity of our markets,” Mark Cave, Associate Director in the SEC’s Division
of Enforcement, said. “Broker-dealers and other firms cannot ignore their
employees’ manipulative conduct and must take meaningful steps to detect and
prevent it. Today’s action results from our continuing commitment to combating
illicit trading.”
The trader’s actions allegedly led to profits for TD
Securities, a practice the regulator mentioned continued across hundreds of
trades during a 13-month period. Once the trader achieved the desired price,
the non-bona fide orders were promptly canceled, leaving the market unaware of
the true intention behind the orders.
Supervision Failures
The SEC’s investigation also highlighted TD
Securities’ shortcomings in overseeing its traders. The firm reportedly failed
to scrutinize the Head of its US Treasuries trading desk despite warnings about
potentially irregular trading activities. The failure to adequately supervise the trader and
implement appropriate trading controls compounded the severity of the
violations, according to the SEC.
TD Securities consented to the SEC’s findings without
admitting or denying the allegations. The firm agreed to several penalties,
including paying a total civil penalty of $6.5 million, a disgorgement of
$400,000, and a prejudgment interest.
The SEC’s investigation involved a collaborative
effort with multiple entities, including the DOJ’s Criminal Division and FINRA. Members of the SEC’s Division of Enforcement, along with specialists from the Division of Economic and Risk Analysis, conducted the detailed probe.
This post is originally published on FINANCEMAGNATES.
