Lime Brokerage to pay fine for overstating trade volume advertised through Bloomberg
During February 2015 and August 2015, Lime inaccurately advertised its executed trade volume in at least 4,280 instances, overstating its trade volume by a total of 186,818,546 shares.
Lime Brokerage LLC has agreed to pay a fine of $100,000 as a part of a settlement with the United States Financial Industry Regulatory Authority (FINRA).
The settlements relates to rule violations that occurred during the period of February 9, 2015 through September 30, 2015 (the “Review Period”). Lime has been found to have overstated its executed trade volume advertised through Bloomberg, L.P. in violation of FINRA Rules 5210 and 2010. In addition, during the Review Period, Lime failed to establish and maintain a supervisory system and failed to establish, maintain, and enforce written procedures that were reasonably designed to achieve compliance with the regulatory requirements under FINRA Rule 5210 that govern the accuracy of advertised trading volumes, in violation of FINRA Rules 3110 and 2010.
In early 2015, Lime determined to advertise its executed trade volume on Bloomberg and tasked a registered representative (RR) at Lime to do so. During the Review Period, the RR was responsible for collecting data and submitting it to Bloomberg for advertising as Lime’s executed trade volume. However, in February and August 2015, the RR inadvertently collected and submitted to Bloomberg for advertising trade volume that was not attributable to Lime.
Specifically, the data submitted by the RR overstated Lime’s executed trade volume by including “Access Only” order flow that was attributable to other broker- dealers that used Lime as a technology vendor, not as a broker-dealer. Lime neither executed nor routed that order flow and should not have advertised it as Lime’s executed trade volume.
In total, during the months of February 2015 and August 2015, Lime, through the RR, inaccurately advertised its executed trade volume in at least 4,280 instances, overstating its trade volume by a total of 186,818,546 shares. In addition, on August 12, 2015, Lime inadvertently submitted duplicate trade volume to Bloomberg for one symbol.
Lime ceased advertising executed trade volume on Bloomberg on September 30, 2015, after FINRA inquired about Lime’s trade volume advertisements.
Moreover, beginning in early 2015, when Lime started publishing its executed trade volume on Bloomberg, and continuing throughout the Review Period, Lime had no supervisory system or written supervisory procedures addressing its new practice of advertising executed trade volume, or how such trade volume should be collected and submitted to Bloomberg.
On top of that, the RR tasked to collect and submit trade volume to Bloomberg had no prior experience advertising trade volume, received no training in how to properly advertise, and was unaware of Bloomberg’s rules regarding advertising trade volume. Furthermore, no one at Lime supervised the RR in connection with the publication of its executed trade volume on Bloomberg and Lime failed to supervise the RR’s collection and submission of Lime’s executed trade volume to Bloomberg.
During the Review Period, Lime also failed to establish, maintain, and enforce written procedures to supervise the types of business in which it engages and the activities of its associated persons that are reasonably designed to achieve compliance with applicable securities laws and regulations, and with applicable FINRA rules regarding the advertisement of trade volume.
In addition to the fine, Lim consents to a censure.
