DriveWealth, LLC
The findings stated that if a notional order resulted in both a whole and fractional share quantity, the firm routed out the whole share amount on an agency basis, and executed the fractional share separately as either principal or riskless principal. The firm believed it did not have any trade reporting obligations for principal and riskless principal fractional share transactions until FINRA notified the firm that it was required to report these fractional share transactions. As a result, the firm failed to report approximately 211 million fractional share trades to the TRFs.
In addition, the firm inaccurately reported approximately 2.1 billion reportable events to the CAT Central Repository. Furthermore, the firm failed to report approximately 169 million reportable events concerning fractional share transactions to the CAT Central Repository and failed to report 173 million route cancellation events.
The findings also stated that the firm effected over 110,000 fractional share trades during 96 trading halts, pauses, and market-wide circuit breakers (MWCBs). In over 52,000 transactions that the firm effected during those halts, pauses, and MWCBs, it gave customers inferior prices than they would have received had the firm waited to execute the trades until trading resumed. These transactions effected at inferior prices impacted 11,719 customer accounts, which the firm identified, and to which the firm will pay restitution totaling $55,122.15.
The findings also included that the firm failed to establish a supervisory system reasonably designed to achieve compliance with its trade reporting, CAT reporting, and trading during halts obligations. The firm had no supervisory system or WSPs relating to trade reporting. In October 2021, the firm implemented supervisory reviews related to the timeliness of its trade reporting, as well as the monitoring of TRF rejections. However, through November 2025, the firm had no process to ensure that the data fields reported to the TRFs contained accurate information, which was unreasonable. In addition, the firm did not have WSPs relating to trade reporting until November 2025. The firm did not implement WSPs related to CAT reporting until February 2024.
The firm’s daily reviews of its CAT reports did not compare the data it reported to CAT against the firm’s order and trade records to ensure that the data fields contained accurate information. Beginning in October 2021, when the firm began reporting to the TRFs, it implemented a supervisory review to monitor for compliance with rules related to trading halts, pauses, and MWCBs. However, the firm did not establish related WSPs until May 2025.
