The Scheme: How You Lie About 446 Million Shares

■ The Facts   From June 2019 through June 2022, XP Investments US, LLC was pumping inflated trade volume data directly into Bloomberg’s financial information network. Bloomberg is the terminal that professional investors, fund managers, and institutional traders around the world pay thousands of dollars a month to access. When you advertise bigger trading volume on Bloomberg, you look like a bigger, more active, more trustworthy player in the market.

■ The Misconduct   The mechanism was buried inside XP’s own order management system (OMS). When a trader using a third-party platform manually modified an existing order, the OMS logged and advertised the volume of both the original order and the modified order separately. The trade happened once; the volume report said it happened twice. In 3,300 separate instances, that double-counting added up to 446 million phantom shares flooding Bloomberg’s data.

XP’s own enforcement document describes this as a “technical issue” the firm “inadvertently” created. The word choice matters. When an ordinary person forgets to disclose income on their taxes, the IRS does not call it a “technical issue.” Calling market manipulation a configuration error is a courtesy extended only to financial firms.

They Knew the Rules. They Just Didn’t Check.

FINRA’s own rules state clearly that broker-dealers who choose to advertise trading volume must ensure that information is “truthful, accurate, and not misleading.” XP chose to advertise. XP chose to connect its OMS to Bloomberg’s data pipeline. XP then chose to build zero supervisory review of whether that data was accurate. That is three separate choices, each one wrong, each one documented in the regulatory record.

The firm replaced its OMS in July 2022, which stopped the bleeding. But it still did not add any formal supervisory review of Bloomberg volume accuracy until June 2023, and it did not put that review into its written procedures until January 2024. More than a year of “we fixed it but didn’t check it,” and nearly two years of “we still haven’t written it down.” The misconduct window in the source document stretches from June 2019 to December 2023 for the supervisory failures alone.

The Non-Financial Ledger: What Money Doesn’t Measure

Every financial scandal has a number attached to it. This one is 446 million. But there is a second set of books that regulators never open, one that tracks what happens to ordinary people when the basic rules of market honesty stop being enforced. When a firm publishes false trading volume on the most widely-used financial data platform in the world, the distortion does not stay inside the firm. It radiates outward into every decision made using that data.

Bloomberg’s subscriber base reads like a who’s-who of money management: pension fund managers, endowment advisors, retirement account custodians, and the armies of analysts who advise everyday investors on where to put their savings. When XP inflated its trading volume, those professionals were working with a corrupted data set. A fund manager who uses volume data as a signal of liquidity or institutional interest in a security was, during those three years, looking at a false picture. The people whose retirement savings sit inside those funds did not consent to that experiment.

Consider what fair market data is supposed to guarantee. It is the foundation of the idea that markets are a level playing field, that the information a small investor can access is at least as accurate as the information a large institutional player has. XP’s three-year inflation of Bloomberg volume data was a quiet assault on that idea. It was a firm saying, in effect, “we are more active and more credible than we actually are,” and transmitting that lie into the arteries of global capital markets.

The settlement document itself is a monument to institutional asymmetry. XP signed away its right to a hearing, its right to appeal, its right to deny the charges, and its right to claim inability to pay, all in a single document. In exchange, the firm received a censure and a $185,000 ($185,000, roughly four months of take-home pay for a median American worker) fine. No individual at the firm was named. No individual was fined. No individual was suspended. The Chief Compliance Officer, whose name and title appear on the signed document, walks away with their license intact and their career uninterrupted. That asymmetry, firms absorb fines, individuals absorb nothing, is the architecture of accountability failure in American financial regulation.

Legal Receipts: Their Own Words, on Record

■ The Facts   These are direct quotations from FINRA’s own enforcement document. These are the findings XP accepted without admitting or denying. Read them slowly.

“From June 2019 through June 2022, XP violated FINRA Rules 5210 and 2010 by overstating its advertised trade volume on Bloomberg, a private, subscription-based provider of market data, in approximately 3,300 instances by approximately 446 million shares.” — FINRA AWC No. 2021072257301, Overview Section

“From at least June 2019 through December 2023, XP violated FINRA Rules 3110 and 2010 by not establishing and maintaining a supervisory system, including written supervisory procedures (WSPs), reasonably designed to achieve compliance with FINRA Rule 5210.” — FINRA AWC No. 2021072257301, Overview Section

“Until June 2023, the firm had no supervisory system for reviewing the accuracy of its trade volume advertisements on Bloomberg, and it did not perform any such supervisory reviews.” — FINRA AWC No. 2021072257301, Facts and Violative Conduct Section

“No member shall publish or circulate, or cause to be published or circulated, any notice, circular, advertisement, newspaper article, investment service, or communication of any kind which purports to report any transactions as a purchase or sale of any security unless such member believes that such transaction was a bona fide purchase or sale of such security.” — FINRA Rule 5210, quoted verbatim in the enforcement document XP signed

“Respondent specifically and voluntarily waives any right to claim an inability to pay, now or at any time after the execution of this AWC, the monetary sanction imposed in this matter.” — FINRA AWC No. 2021072257301, Sanctions Section — XP waived the right to argue the fine was too large

Societal Impact Mapping: Who Actually Pays

Economic Inequality: The Two-Tier Market

■ The Misconduct   The financial markets have always operated on an informal hierarchy of information access. Institutional investors with Bloomberg terminals costing $24,000 a year per seat sit at the top. Retail investors scrolling free apps sit at the bottom. The premise that keeps this system nominally legitimate is that the data entering those tiers, while accessed at different speeds, is at least accurate at the source. XP cracked that premise for three years and paid less than the annual cost of two Bloomberg terminals to make it go away.

The firms and individuals who used XP’s inflated Bloomberg volume data as part of their decision-making did not receive any notification that the data was wrong. FINRA’s settlement contains zero requirement for XP to disclose the error to any data consumer, any institutional client, or any retail investor who may have acted on volume signals during the 2019-to-2022 window. The people who were misled received nothing. The firm that misled them received a censure and a fine that amounts to a rounding error on a mid-sized brokerage’s annual compliance budget.

Volume data is not an abstract metric. It feeds directly into algorithmic trading systems, momentum indicators, and liquidity assessments. When a security looks more actively traded than it is, it appears safer, more liquid, and more creditworthy to systematic investors. XP’s inflation benefited XP’s market image. Any downstream investor who made a decision based on that inflated credibility paid a price that was never calculated and will never be reimbursed.

Public Health of Democratic Markets: Trust as Infrastructure

Market integrity is infrastructure. The same way that clean water requires honest water-quality reporting, honest markets require honest data reporting. When a firm can publish 446 million fake share transactions across a three-year window, face no individual consequences, pay a fine smaller than the annual salary of the compliance officer who signed the settlement, and walk away with its license intact, the infrastructure corrodes. Not for the hedge funds, who have enough lawyers and data scientists to cross-check everything. For everyone else.

The settlement document includes an unusual clause: XP agreed that it “may not take any action or make or permit to be made any public statement, including in regulatory filings or otherwise, denying, directly or indirectly, any finding in this AWC.” In other words, the firm admitted misconduct for the purpose of closing the file, and it is now legally forbidden from publicly walking that admission back. That clause is not protection for the public. It is protection for FINRA’s record. The public gets no remedy. The regulator gets a cleaner precedent file.

The “Cost of a Life” Metric: Run the Numbers

The fine XP paid is less than the cost of one year’s worth of Bloomberg terminal subscriptions for roughly eight traders. The firm operates with approximately 100 registered representatives. A firm of that size, in that industry, could absorb this fine without a single meeting of its finance committee. For context: $185,000 is enough to cover rent for about 5 families for a full year, or to pay one year of in-state tuition for roughly 12 students. That is the price FINRA attached to three years of market data fraud.

What Now? Names, Watchlists, and Next Steps

Who Signed the Document

The settlement document was signed on behalf of XP Investments US, LLC. The signer’s title is listed as Chief Compliance Officer. The printed name on the document is partially legible in the source as [REDACTED – Not Fully Legible in Source]. Counsel for the firm was Michael A. Gross of UB Greensfelder LLP in Boca Raton, Florida. The FINRA enforcement action was accepted by Kimly Koziara, Principal Counsel, FINRA Department of Enforcement.

No individual at XP was charged. No individual was fined. No individual was suspended. The firm’s leadership structure beyond the Chief Compliance Officer is [REDACTED – Not in Source].

BrokerCheck: Use It

FINRA’s own enforcement document directs readers to BrokerCheck at www.finra.org/brokercheck to view XP Investments US, LLC’s full regulatory history, including “prior regulatory events.” This settlement will now appear as a permanent part of XP’s disciplinary record. If you are a client of XP, a counterparty, or an institution considering a relationship with this firm, that record is public and searchable.

Organize. Don’t Just Read. Share. Organize.

■ The Resistance   Regulatory capture does not end when a settlement is signed. It ends when enough people make enough noise that self-regulatory organizations like FINRA face real consequences for treating fines as a cost of business. Support organizations that push for stronger financial regulation and public accountability, including investor protection advocacy groups, independent financial journalism outlets, and local mutual aid networks building economic alternatives to Wall Street dependence. Share this document. The source is attached below.