A considerable number of US-based Exchanges as well as the US Financial Industry Regulatory Authority, or FINRA, has fined Lek Securities Corporation. The Exchanges involved are BX, NASDAQ, ISE, PHLX, NYSE, NYSE American NYSE Arca, BZX, Cboe, BYX, EDGX, and EDGA. A permanent ban of the company’s former CEO, Samuel Lek, has also been imposed.

Failure To Uphold Regulations and Rules

Lek Securities has been providing foreign traders with market access for several years, with the traders engaging in a number of manipulative trading practices. These traders committed acts of cross-product manipulation, spoofing and layering through the trade of US options and equity exchanges. Samual Lek, along with the company itself, supported these trading activities via a master-sub account held by Lek Securities and ‘failing’ to properly supervise it.

Even with all these blatant signs of suspicious activities and investigations done by other exchanges, FINRA and the Securities and Exchange Commission (SEC), Lek Securities continued these practices. Both the company and Samual Lek himself allowed it to continue for years as the investigations went on. The company even sourced computer servers, office space, trading software, and other services to dedicate to the master-sub account used by its suspected customer-traders.

Apparent Deliberate Actions

FINRA and the Exchanges have all found Lek Securities to have failed in supervising the various illegal activities of the firm’s registered members. Thus, the company was unable to comply with the laws and regulations of securities, further failing to establish and follow a written supervisory procedure. All in all, the company seemingly deliberately failed to properly supervise the business its firm engaged in via its customer-traders.

Lek Securities went one step further, violating the Market Access Rule. The Rule mandates broker-dealers providing its various customers access to an exchange or alternative trading platform to control the regulatory and financial risks involved consistently. Through the dismissal of communications and alerts from regulators in regards to the potential of manipulative trading, Lek Securities allowed these illegal practices.

Fine and Permanent Ban

As a result, Samual Lek is personally banned from ever doing business within the securities market of the US. His company, Lek Securities, was hit with a $900 000 fine as reparations. The firm agreed to certain intra-day foreign trading restrictions, as well as independent monitoring and undertakings.

With the matter settled, it should be essential to note that neither Lek Securities nor Samuel Lek admitted or denied these charges. Both simply consented to FINRA’s entry and the findings of the Exchanges.