Securities Lawyers Blog
Brokerage firms such as CODA Markets, Inc. have a duty to supervise their financial advisors and to recommend only investments that are suitable for their customers. When a firm breaches that duty through negligent supervision, overconcentration, excessive investment risk, or misrepresentation, investors have the right to bring a claim against the brokerage firm. The broker misconduct attorneys at Gana Weinstein LLP represent investors in these claims and can evaluate whether your investment losses were caused by misconduct.
CODA Markets is an agency-only broker-dealer that operates an auction-based alternative trading system and smart order router for United States equities, aggregating liquidity through intraday stock auctions. Originally known as PDQ ATS and incorporated in Connecticut in 1993, the firm is based in Wilmette, Illinois, and has been owned by ACS Global Holdings since 2024 after a period under Apex Fintech Solutions.
CODA Markets, Inc. – By the Numbers:
- CRD #: 36187
- Regulatory Events: 15
- Broker Employees: 13
CODA Markets, Inc. – In the News:
FINRA v. CODA Markets, Inc. (Case #2015044078201) – From July 14, 2011 through the present, CODA Markets provided its subscribers with direct market access (DMA) to multiple exchanges and unaffiliated ATSs through its market participant identifiers, and DMA became its largest revenue source. CODA Markets failed to establish and maintain a supervisory system, including written supervisory procedures (WSPs), and regulatory risk management controls reasonably designed to monitor for potentially manipulative trading, such as layering, spoofing, wash trades, prearranged trades, marking the close, and odd-lot manipulation, during a period in which its trading generated more than 350,000 exceptions and alerts at FINRA and multiple exchanges. CODA Markets also failed to develop and implement a reasonably designed anti-money laundering (AML) program, failed to establish reasonably designed financial risk management controls to prevent the entry of orders exceeding pre-set credit thresholds and erroneous orders, and failed to comply with supervisory control and certification requirements. As a result, CODA Markets violated Exchange Act § 15(c)(3) and Rule 15c3-5 thereunder, FINRA Rules 3110, 3120, 3130, 3310, and 2010, and NASD Rules 3010 and 3012.
FINRA v. CODA Markets, Inc. (Case #2016048498401) – During the period of June 2010 through October 2017 (the “review period”), the firm published inaccurate data in monthly reports it was required to make public pursuant to Rule 605 of Regulation NMS (“Rule 605 reports”). During the review period, the firm failed to establish and maintain a supervisory system and written supervisory procedures (“WSPs”) reasonably designed to achieve compliance with Rule 605 of Regulation NMS, in violation of NASD Rule 3010 (prior to December 1, 2014), and FINRA Rules 3110 (on and after December 1, 2014) and 2010.
FINRA v. CODA Markets, Inc. (Case #2016049105201) – During the period January 1, 2015 through July 20, 2018, the Firm failed to report millions of reportable order events (“ROEs”) to the Order Audit Trail System (“OATS”) and reported over one billion ROEs that contained inaccurate, incomplete or improperly formatted data. Also, from January 1, 2015 through January 17, 2019, the Firm failed to maintain a supervisory system, including written supervisory procedures (“WSPs”), reasonably designed to achieve compliance with FINRA Rules concerning OATS reporting. FINRA uses OATS data as an integral part of its automated market surveillance program to detect manipulative activity and other potential violations of FINRA rules and the federal securities laws. As such, a failure to report to OATS or inaccurate reporting can impede FINRA’s ability to detect potential violative conduct and/or create false positive alerts. Moreover, these failures cause the order audit trail to be inaccurate. As a result of the conduct described above, the Firm violated FINRA Rules 7450 and 3110 and 2010.
The FINRA actions described above involve CODA Markets, Inc. itself, and investors whose losses are connected to the conduct FINRA identified may have claims against the firm. Gana Weinstein LLP offers free consultations and we welcome all inquiries.