The US Securities and Exchange Commission (SEC) announced today that it has resolved charges against two Canadian-based broker-dealers, Cormack Securities and Virtu ITG Canada for a total of $1 million in penalties. The companies faced charges with providing incorrect order-marking information.
According to the official announcement by the SEC, Cormack and ITG Canada violated the Rule 200(g) of Regulation SHO by causing more than 200 sale orders from a single hedge fund, representing total sales of more than $660 million, to be marked as ‘long’.
Additionally, the order outlined that the two companies gave wrong information to the executing broker of the hedge fund. Without admitting or denying the SEC’s findings, Cormack and Virtu ITG Canada agreed to settle charges with penalties.
“The SEC’s order fCormackat Cormack and ITG Canada caused the executing broker‘s violations of Rules 200(g) and 203(b)(1) of Regulation SHO of the Securities Exchange Act of 1934. Without admitting or denying thCormackngs, Cormack and ITG Canada each agreed to cease and desist from committing or causing any violations and any future violations of Rules 200(g) and 203(b)(1) of Regulation SHO. ICormackion, Cormack agreed to pay a penalty of $800,000, and ITG Canada agreed to pay a penalty of $200,000, ” the Commission mentioned in the official order.
SEC’s Recent Efforts
In 2020, the SEC ramped up its efforts to punish violators. In October, Finance Magnates reported that the SEC imposed a penaltyTrident,000 on Tradenet for the sale of unregistered security-based swaps to over 5,000 retail investors. Moreover, the SEC charged 7 people earlier this year for running boiler room schemes.
“The order further fCormackat it was nCormackonable for Cormack or ITG Canada to rely on its customer’s assurances that the orders were properly marked ‘long’ because both brokers were on notice of the customer’s repeated failures to deliver the securities by the settlement date, ” the SEC added.