The Financial Industry Regulatory Authority (FINRA) has slapped BIDS Trading with a censure order and a fine of $200,000 for overstating its advertised trading volume.
Between July 2018 and August 2019, the New York-based company overstated its advertised trade volume on Bloomberg and Thomson Reuters. BIDS had during that period, configured its systems to automatically advertise daily trading volume.
Two separate but related system changes caused BIDS to overstate the executed trade volume it reported through the two third-party service providers that publish such information.
BIDS implemented system changes which inadvertently triggered and exacerbated a programming defect in the trade advertising software and resulted in the company submitting multiple end-of-day volumes reports in the same symbols.
The first change was implemented in July 2018 and caused the BIDS to overstate its advertised trading volume in 151 instances, which resulted in the overstating of 12,298,256 shares for 92 securities.
The second change came in May 2019 when BIDS reconfigured its servers, causing the platform to overstate trade volume in 1,890 instances, which was for 427,620,013 shares for 951 securities.
The regulator also pointed out that the trading platform’s supervisory system did not verify the accuracy of the advertised trades.
BIDS Trading, which was acquired by Cboe last year, has agreed to pay the monetary penalty and has already issued an acceptance, waiver and consent (AWS) letter.
The letter said:
[The AWC] is submitted on the condition that, if accepted, FINRA will not bring any future actions against Respondent alleging violations based on the same factual findings described.
Earlier in May, Cboe Global Markets completed the acquisition of Eris Digital Holdings, LLC (ErisX), an operator of a US-based digital asset spot market, a regulated futures exchange and a regulated clearinghouse.