TradeUP Securities, Inc.
The findings stated that in July 2021, the firm began to self-clear customer short sales. However, the firm did not begin reporting its short interest to FINRA until May 2023 after receiving an inquiry from FINRA.
The firm had been under the mistaken belief that its third-party back-office vendor was reporting its short interest to FINRA on the firm’s behalf.
The findings also stated that the firm failed to establish and maintain a supervisory system, including WSPs, reasonably designed to achieve compliance with its short interest reporting obligations. The firm did not have any procedures in place to confirm that its short interest data was reported to FINRA.
In addition, the firm’s WSPs did not address its obligation to report short position data to FINRA under FINRA Rule 4560.
Ultimately, the firm implemented procedures designed to ensure the accuracy and timely submission of short interest reporting to FINRA and amended its WSPs to address its short interest reporting requirements.
