The Financial Industry Regulatory Authority (FINRA) reported this week that it has fined Seaport Global Securities LLC $125,000 for supervisory and record-keeping failures linked to its options trading operations.
Seaport Global Securities Fined $125k By FINRA
The fine follows a settlement agreement in which Seaport neither admitted nor denied the findings but accepted the sanctions to resolve the matter.
According to FINRA, from March 2020 to June 2021, Seaport did not maintain adequate supervisory systems and written procedures for managing manual options transactions.
The lapses are said to have included insufficient oversight of the cancellation and re-execution of trades, commonly known as “busting” and “adjusting,” and the creation of incomplete and inaccurate order records.
The regulator explained in a report that Seaport’s deficiencies led to breaches of its rules, including FINRA Rules 3110 and 4511, as well as provisions under the Securities Exchange Act.
In four instances, Seaport is alleged to have adjusted manual options trades, resulting in prices that were less favorable to the firm’s customers than when the trades were originally executed.
FINRA said the firm has since offered full restitution totalling $111,400, plus interest, to the affected clients.
In addition, Seaport also committed to implementing enhanced supervisory procedures within 90 days and will provide FINRA with certification of its compliance.
Seaport is is a New York-based mid-size independent investment bank that offers capital market advisory, sales, research, and trading services. The firm has been a FINRA member since 2002.
