SogoTrade
The findings stated that the firm’s single-order quantity and single-order notional value were not reasonably designed to prevent the firm’s customers from entering erroneous orders that exceed appropriate price or size parameters on an order-by-order basis and the firm did not document its rationale for its existing controls.
The firm did not maintain a reasonable pre-trade price deviation control designed to reject orders priced more than a certain percentage away from a reference price and did not document its rationale for its existing controls. The firm’s single-order price deviation control was not reasonably designed because most of the firm’s single-order price deviation limits were set at or above industry-wide execution guidelines under FINRA and applicable exchange rules.
In addition, the firm’s WSPs relating to market access were not reasonably designed because they failed to describe the firm’s market access controls or the thresholds applied by those controls and the methodology and rationale for how the firm determined the thresholds. The findings also stated that the firm failed to conduct at least annually a review of its market access controls and supervisory procedures and to complete the related chief executive officer (CEO) certifications. Specifically, the firm did not review the overall effectiveness of its risk management controls as designed, including with respect to the reasonableness of the thresholds used.
The firm’s annual CEO certifications failed to comply with applicable rules because they did not include statements from the CEO that the firm’s risk management controls and supervisory procedures comply with paragraphs (b) and (c) of Rule 15c3-5 of the Securities Exchange Act of 1934, or that the firm conducted a review of its business activity related to market access. In December 2024, the firm conducted a review of its market access business activity and in 2025 obtained a certification from its CEO that included the required statements for 2024.
