The U.S. Securities and Exchange Commission (SEC) recently announced its decision on Archipelago Trading Services Inc..(ATSI) filed an allegation that it failed to file hundreds of legally required suspicious financial transaction reports, known as Suspicious Activity Reports (SAR), between August 2012 and September 2020.。

The charges relate to over-the-counter (OTC) securities transactions executed on ATSI's Alternative Trading System (ATS).。

Under the SEC's order, ATSI's sole business is operating an over-the-counter equity securities ATS, which is used by broker-dealers to conduct over-the-counter securities transactions.。Global over-the-counter trading plays an important role in the execution of trading in micro and fine stock securities, which are not listed on any national exchange and are often high-risk securities.。

Although the global OTC executes thousands of high-risk micro-cap and fine-cap securities transactions every day, the SEC's order found that ATSI did not establish an anti-money laundering monitoring program for its transactions until September 2020.。

As a result, ATSI failed to monitor transactions executed on global over-the-counter (OTC) transactions to detect red flags of possible suspicious trading manipulation activities, including possible fraud, tiered trading, laundering transactions and pre-arranged transactions。

As a result, the SEC's order found that ATSI failed to file at least 461 SARs, most of which involved micro-cap or penny stock securities.。

The SEC order found that ATSI violated Rule 17 (a) and Rule 17a-8 of the Securities Exchange Act.。

Without admitting or denying the SEC's findings, ATSI agreed to a censure and stop order against it and a $1.5 million fine.。