Liquidnet, Inc.

Liquidnet, Inc. was fined $50,000 for publishing inaccurate data in monthly reports it was required to publish pursuant to Regulation NMS Rule 605.

The findings stated that those reports were inaccurate because the firm misclassified, and incorrectly reflected in its Rule 605 reports, certain marketable limit orders in NMS stocks as inside-the-quote limit orders.

Specifically, the firm received “parent” limit orders from its customers and, upon receipt, simultaneously routed “child” orders to its alternative trading systems.

The firm incorrectly classified these order types for purposes of Rule 605 in one of its alternative trading systems based on the execution price of the child order instead of the limit price of the parent order. This misclassification affected 30 consecutive Rule 605 reports published by the firm.