A firm settled FINRA charges for inaccurately coded options orders submitted by customers on its thinkorswim ("TOS") platform.
According to the Letter of Acceptance, Waiver and Consent, the firm routed to various options exchanges orders that were marked as "Customers" rather than "Professional Customers." This resulted in the execution of approximately 500,000 mismarked options orders. FINRA alleged that the miscoding (i) led to inaccurate order records and (ii) potentially caused "those orders to be given undue priority for execution on the options exchanges." FINRA determined that the firm failed to implement (i) a supervisory system to detect whether customers' options orders were accurately coded and (ii) a written supervisory procedure for orders executed on the TOS platform.
Without admitting to or denying the charges, the firm agreed to a censure and to pay a fine of $250,000.