FINRA fines TradeUP Securities for reporting deficiencies

Regulatory news

2024-09-20 09:32:32

3490

TradeUP Securities, Inc. has agreed to pay a fine of $300,000 as a part of a settlement with the Financial Industry Regulatory Authority (FINRA).

In July 2021, TradeUP began to self-clear customer short sales. TradeUP, however, did not begin reporting the firm’s short interest to FINRA until May 2023 after receiving an inquiry from FINRA. Between August 2021 and May 2023, TradeUP was under the mistaken belief that its third-party back-office vendor was reporting its short interest to FINRA on the firm’s behalf.

Across the 43 bimonthly reporting cycles from August 13, 2021, to May 15, 2023, TradeUP failed to report 18,702 short interest positions totalling 36,452,154 shares.

The firm therefore violated FINRA Rules 4560 and 2010.

Between August 2021 to May 2023, Trade UP did not have any procedures in place to confirm that its short interest data was reported to FINRA. In addition, TradeUP’s written supervisory procedures did not address the firm’s obligation to report short position data to FINRA under FINRA Rule 4560.

In May 2023, TradeUP implemented procedures designed to ensure the accuracy and timely submission of short interest reporting to FINRA and amended its written supervisory procedures to address its short interest reporting requirements.

Because it failed to establish and maintain a reasonable supervisory system, including written supervisory procedures, to achieve compliance with FINRA Rule 4560, TradeUP violated FINRA Rules 3110(a) and (b), and 2010.

In addition to the $300,000 fine, the firm has agreed to a censure.

Maria Nikolova

Maria has been engaged in journalism for more than 17 years, providing Forex industry coverage for the past 10 years. Before joining FNG she was Managing Editor at FinanceFeeds. Prior to that, she worked at LeapRate. Maria has a Philosophy degree from the St. Kliment Ochridski university in Sofia. She has specialized in Cognitive Science in Vienna. Her interests include psychology, AI, and linguistics.