The Financial Industry Regulatory Authority (FINRA) disclosed it has fined Tastytrade, Inc. $30,000 for supervisory failings related to monitoring employees’ outside securities accounts.
Tastytrade Fined By FINRA
The Chicago-based brokerage, a FINRA member since 2016, was also censured as part of the settlement.
Between July 2021 and July 2023, FINRA said Tastytrade failed to establish and maintain a supervisory system in compliance.
They added that the firm’s written supervisory procedures (WSPs) were said to have been inadequate, lacking clear processes for reviewing outside account transactions disclosed by employees.
Delays and omissions in these reviews spanned nearly two years, according to FINRA. “In total, from July 2021 through June 2023, tastytrade failed to review, on a quarterly basis, approximately 84 outside securities accounts belonging to 35 employees,” stated the firm. “This included 14 accounts that the firm failed to review at all until June 2023, during FINRA’s cycle examination of the firm.”
According to FINRA, the lapses contravened its rules, which mandate robust systems to oversee securities transactions and guard against violations, such as insider trading. Tastytrade has since updated its WSPs and enhanced its supervisory practices.
In agreeing to the settlement, Tastytrade neither admitted nor denied FINRA’s findings but accepted the sanctions to avoid further proceedings.
