Securities Lawyers Blog
Our law firm represents individual and institutional investors that have been mistreated by their brokers and brokerage firms, such as Clearpool Execution Services, LLC. Many investors do not recognize broker misconduct in their accounts, and those that do are often hesitant to seek help. Broker misconduct spans many issues that violate industry rules, including unauthorized trading, breach of fiduciary duty, unsuitable asset allocation, and churning. The attorneys at Gana Weinstein LLP can analyze your accounts and investments to determine if there was misconduct in the handling of your account.
Clearpool Execution Services is an independent agency broker-dealer that provides electronic trading software and execution services, including customizable algorithms and smart order routing for U.S. and Canadian equities. Launched in New York in 2014 as part of Clearpool Group, the firm serves a client base of more than 100 U.S. broker-dealers and has been owned by BMO Financial Group since 2020.
Clearpool Execution Services, LLC – By the Numbers:
- CRD #: 168490
- Regulatory Events: 19
- Broker Employees: 34
Clearpool Execution Services, LLC – In the News:
FINRA v. Clearpool Execution Services, LLC (Case #2016048613101) – Clearpool executed client orders on a riskless principal basis from April 27, 2015 through May 17, 2017. With respect to its riskless principal business, Clearpool failed to comply with Regulation SHO of the Securities Exchange Act of 1934, trade reporting rules, and recordkeeping requirements. First, Clearpool violated Rule 203(b)(1) of Regulation SHO and FINRA Rule 2010 by effecting an estimated 9.27 million principal short sales without obtaining locates. Second, Clearpool violated FINRA Rules 6182, 7230B(d)(6), and 2010 by reporting an estimated 9.28 million short sale transactions to the FINRA/NYSE trade reporting facility (TRF) without the short sale indicator. Finally, Clearpool violated Exchange Act § 17(a) and Rule 17a-3(a)(1) thereunder and FINRA Rules 4511(a) and 2010 by failing to maintain accurate blotters of its purchases and sales of securities.
FINRA v. Clearpool Execution Services, LLC (Case #2014042373804) – In Matter No. 20140423738, FINRA’s Department of Market Regulation, Quality of Markets team, on behalf of FINRA and ten exchanges, identified and reviewed potentially manipulative trading activity by a foreign, unregistered proprietary trading fund (“Fund X”) that was an affiliate and customer of Clearpool. From July 2014 to September 2016, Clearpool executed Fund X’s trades and introduced its order flow to other broker-dealers for execution. Fund X traded through more than 1,000 foreign, unregistered individual traders, and triggered thousands of surveillance alerts at FINRA and multiple exchanges for potentially manipulative trading known as “layering” and “spoofing.” Despite being on notice of potentially manipulative trading by Fund X, Clearpool terminated the trading access of hundreds of individual traders, but continued to execute and introduce orders from Fund X. As a result, from July 2014 through September 2016, Clearpool failed to establish and maintain a system that was reasonably designed to achieve compliance with applicable securities laws and regulation and applicable FINRA rules. Thus, it violated NASD Rule 3010(a) (before December 1, 2014) and FINRA Rule 3110(a) (on and after December 1, 2014), as well as FINRA Rule 2010. In addition, Clearpool failed to establish, maintain, and enforce written procedures reasonably designed to achieve compliance with applicable securities laws and regulations, and with applicable FINRA rules. By virtue of the foregoing, Clearpool violated NASD Rule 3010(b) and FINRA Rule 3110(b), as well as FINRA Rule 2010.
FINRA v. Clearpool Execution Services, LLC (Case #2016050054901) – In Matter No. 20160500549, The Trade Reporting Team staff of FINRA’s Department of Market Regulation (the “staff”) reviewed the firm’s compliance with equity trade reporting requirements to the FINRA/NYSE Trade Reporting Facility (“FINRA/NYSE TRF”) during the period from July 13, 2015 through April 30, 2016 (the “review period”). As described further below, the firm failed to accurately report the capacity in which it acted (and mishandled its reporting of the contra party’s capacity) in connection with more than 77 million non-media reports of transactions to the FINRA/NYSE TRF during the review period. The misreporting resulted from the firm’s failure to implement certain coding changes to its trading systems in response to certain technical changes associated with reporting to the TRF that went into effect at the beginning of the review period. Because FINRA uses trade data as an integral part of its automated market surveillance program to surveil for customer protection and compliance with a variety of FINRA rules and the federal securities laws, a failure to transmit required trade data or the transmission of inaccurate trade data, can hamper FINRA’s ability to detect potentially violative conduct and/or create false positive alerts. The firm also lacked a supervisory system reasonably designed to achieve compliance with the applicable securities laws and regulations, and/or applicable FINRA Rules, concerning trade reporting accuracy, by lacking written supervisory procedures during the review period specific to accurate trade reporting to the FINRA/NYSE TRF and more generally. Accordingly, the firm violated FINRA Rules 7230B(d), 3110 and 2010.
Gana Weinstein LLP has successfully litigated broker disputes through verdict or settlement. We represent both individuals and institutions throughout the country in FINRA arbitration, as well as commercial litigation in state and federal courts. Our consultations are both free and thorough and our securities litigation attorneys can help you uncover wrongful activity in your account.