Precision Securities

Precision Securities was fined a total of $70,000 by FINRA and NYSE Arca for failing to implement market access controls to limit its financial exposure pursuant to SEC Rule 15c3-5(b), (c) and (e).

The findings stated that the firm did not have any pre-set credit thresholds for its customers or capital thresholds for the firm, and it did not implement any controls to prevent the entry of duplicative orders.

In addition, the firm’s controls were not reasonably designed to prevent the entry of erroneous orders.

The findings also stated that the firm failed to implement controls and supervisory procedures to restrict the use of its market access.

The firm did not have any controls reasonably designed to prevent the entry of orders for securities that a customer was restricted from trading.

The findings also included that twice the firm did not perform an annual review of the overall effectiveness of its market access risk management controls and supervisory procedures. In both years, the firm reviewed only a single control.

Furthermore, the firm’s CEO certifications in those two years did not state that the firm’s controls and procedures complied with Rule 15c3-5 of the Exchange Act.

FINRA found that the firm’s WSPs included certain controls and supervisory procedures relating to its provision of market access, but these were not reasonably designed.