Financial Industry Regulatory Authority (FINRA) has fined SogoTrade $75,000 and issued a formal censure after finding the online brokerage failed to maintain adequate market-access risk controls and supervisory procedures over several years.
The settlement, reached through a Letter of Acceptance, Waiver and Consent, relates to deficiencies dating back to January 2018. According to FINRA, SogoTrade did not establish or properly document controls designed to prevent erroneous or disruptive orders, in violation of U.S. securities regulations and FINRA rules.
SogoTrade, a FINRA member since 1986, neither admitted nor denied the findings but agreed not to contest them as part of the settlement.
FINRA also found that the firm failed to carry out required annual reviews of its market-access controls and did not obtain compliant chief executive officer certifications between 2018 and 2024.
Regulators said SogoTrade’s systems for blocking orders that exceeded appropriate price or size limits were not reasonably designed and lacked documented justification. Single-order quantity and notional-value thresholds were set too high to effectively prevent erroneous trades, while certain safeguards applied only to low-touch electronic orders and not to higher-touch trades routed through the firm’s trading desk.
In addition, FINRA determined that SogoTrade did not maintain adequate written supervisory procedures describing how its market-access controls were implemented and monitored.
Under the terms of the settlement, SogoTrade is required to certify within 60 days that it has remediated the identified deficiencies and implemented a supervisory system reasonably designed to comply with regulatory requirements. FINRA may request additional evidence to verify the remediation.
Earlier this month, FINRA also fined Kingswood Capital Partners $150,000 for supervision failures.
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By
Staff Writer
