“WABR, therefore, did not take reasonable steps to establish that ISOs it routed met the requirements of Exchange Act Rule 600(b)(31) in violation of Exchange Act Rule 611(c) and FINRA Rule 2010.”

💡 The firm admits it failed to ensure its protective sweep orders complied with regulations designed to prevent investors from receiving worse prices.

“Between October 2019 and April 2021, WABR experienced three separate systems issues with the OMS that the firm used to send ISOs, which resulted in approximately 1,900 trade-throughs.”

💡 Nearly 2,000 illegal trades occurred over 18 months, demonstrating this was not an isolated error but a systematic failure.

“However, the firm only reviewed the report at month’s end. Accordingly, when Venue A began to reject ISOs routed by the firm due to a configuration issue with the OMS on October 28, 2019, the firm did not detect the issue until December 2019.”

💡 Monthly review schedules proved catastrophically inadequate, allowing two months of violations before detection despite a 2018 regulatory warning.

“Nevertheless, it did not detect this destination code issue until it received an inquiry from FINRA in May 2020. At this point, the firm learned that the OMS provider had resolved this issue in March 2020.”

💡 The firm’s internal monitoring failed to catch a five-month routing failure, and only external regulatory inquiry exposed the problem.

“Although the firm detected this issue in November 2020, it was not resolved as to one of its market participant identifiers (MPID) until December 2020 and as to its other MPID until April 2021. Nevertheless, WABR continued to use ISOs for both of its MPIDs and to avail itself of the Outbound ISO Exception for approximately five months after it discovered that those ISOs did not comply with the Outbound ISO Exception.”

💡 The firm knowingly continued violating regulations for up to five months after discovering the problem, prioritizing continued revenue over compliance.

“As a result of the foregoing conduct, between October 2019 and April 2021, WABR failed to establish and maintain a supervisory system, including WSPs, reasonably designed to prevent trade-throughs, in violation of Rules 611(a) and (c) of Regulation NMS and FINRA Rules 3110 and 2010.”

💡 The violations stemmed not just from technical errors but from systematic failure to maintain adequate supervision and written procedures.

“WABR handles large, not-held orders from broker-dealers and executes the trades as principal on a net basis. When the execution is at a price that is lower than a protected bid or higher than a protected offer, WABR relies on the Outbound ISO Exception of Regulation NMS.”

💡 The firm acts as principal and pockets the trading spread, creating direct financial incentive to execute quickly even when it means skipping required price protections.

“Although the firm revised its Reg NMS ISO Orders Report after receiving a warning from FINRA in May 2018, the Report did not identify whether the ISOs were received and executed as intended by the venues to which it directed the ISOs.”

💡 Even after a 2018 warning, the firm’s compliance reports lacked the basic functionality to verify whether protective orders actually worked.

“a $125,000 fine, of which $24,563.18 shall be paid to FINRA. The balance of the sanction will be paid to Cboe BYX Exchange, Inc., Cboe BZX Exchange, Inc., Cboe EDGA Exchange, Inc., Cboe EDGX Exchange, Inc., Investors Exchange, New York Stock Exchange LLC, NYSE Arca, Inc., and NYSE American LLC.”

💡 The entire fine goes to regulators and exchanges, with not one dollar designated for the investors who suffered actual trading losses.

“In March 2021, the firm hired an additional operations employee who assists with Rule 611 compliance. As of June 2021, the Reg NMS ISO Orders Report was reviewed on a daily basis.”

💡 The firm only added compliance staff and daily monitoring after 18 months of violations, implicitly admitting prior resources were inadequate.

“Respondent accepts and consents to the following findings by FINRA without admitting or denying them”

💡 The settlement structure allows the firm to accept sanctions while avoiding formal acknowledgment of wrongdoing.

“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.”

💡 The firm explicitly acknowledges the $125,000 fine poses no financial hardship, confirming the penalty is immaterial to its operations.

“First, between October 2019 and December 2019, Venue A rejected 247 ISOs routed by the firm due to a configuration issue with its OMS. As a result, the rejected ISOs caused additional simultaneously routed ISOs to route-through and, in approximately 170 instances, trade-through, one or more protected quotes.”

💡 The first system failure alone caused 170 illegal trades before detection, establishing a pattern of inadequate monitoring.

“Second, the reconfiguration of the OMS to resolve the Venue A reject issue introduced a separate systems issue that caused WABR not to route 1,600 ISOs to Venue A. This caused approximately 1,300 trade-throughs between December 2019 and March 2020.”

💡 The attempt to fix one problem created a worse problem, and the firm’s monitoring failed to catch 1,600 missing orders over three months.

“Finally, between October 2020 and April 2021, the OMS did not route 1,248 ISOs to Venue B or Venue C, which caused approximately 430 trade-throughs.”

💡 Even after two prior failures, the firm repeated the same type of destination code error with newly operational exchanges.

“Trade-through protection prevents unfairness to investors and facilitates best execution of customer orders.”

💡 The regulatory requirement exists specifically to prevent the type of investor harm Wall Street Access caused 1,900 times.