MX sanctions weak trading oversight

U.S.-based Wedbush Securities Inc. is being sanctioned in a settlement with the Bourse de Montréal Inc. (MX), which alleged that the firm violated the rules regarding electronic trading access.

Following a hearing, the exchange’s disciplinary committee approved a proposed settlement agreement with Wedbush that requires the firm to pay a $290,000 fine and $10,000 in costs.

The MX alleged that the firm breached the exchange’s rules on electronic access by failing to implement post-trade monitoring and controls that would enable it to detect potentially manipulative trading by direct access clients.

The exchange also said the firm didn’t properly document its efforts to follow up on alerts of potentially abusive trading by direct access clients, and that it failed to make certain reports of derivatives trading positions, among other compliance shortcomings.

According to the settlement, the firm admitted the compliance failings and took corrective action. The regulator also noted that the misconduct was not intentional.

James Langton

James is a senior reporter for Advisor.ca and its sister publication, Investment Executive. He has been reporting on regulation, securities law, industry news and more since 1994.