FINRA, along with securities exchanges Bats, Nasdaq and the NYSE, hit Deutsche Bank Securities, Citigroup Global Markets, J.P. Morgan Securities and Interactive Brokers with $4.75 million in fines for violating the "market access rule" requiring them to control the risks of accessing – or providing access to – an exchange or alternative trading system.
The firms were found to have broken one or more of the rule's provisions, neglecting, for example, to put in place risk management controls and procedures reasonably designed to prevent mishaps, such as the entry of erroneous or duplicative orders.
The firms also failed to comply with their obligations under the supervisory rules of FINRA and the exchanges to establish and maintain a reasonably designed system.
Collectively the four firms provided market access to numerous clients that executed millions of trades per day, according to FINRA.
Deutsche Bank was hit with the heaviest fine: $2.5 million. Citigroup was fined $1 million, while J.P. Morgan and Interactive Brokers were fined $800,000 and $450,000, respectively.
The fines were levied against the firms between May and July 2017.
"It is important that firms have reasonable market access procedures in place to appropriately monitor for errors and risks that can be harmful to the integrity of our securities markets," FINRA and the exchanges said in a joint statement.
"We are glad to put this matter behind us," Brian Marchiony, a spokesman for J.P. Morgan, said in a statement. "As always, we are committed to having appropriate controls in place in order to satisfy regulatory requirements."
Deutsche Bank and Citigroup said they were pleased to have resolved the matter. Interactive Brokers declined to comment.
The four firms agreed to the fines without admitting or denying the charges against them.
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