Securities Lawyers Blog
The investment lawyers at Gana Weinstein LLP have experience helping investors determine whether their portfolio losses at investment firms, such as Sagetrader, LLC, were caused by broker misconduct. There are many different ways that your broker can impermissibly drain your accounts. Our attorneys can help you understand the cause of your investment losses, uncover misconduct, and apply the law to hold accountable those responsible.
SageTrader is a broker-dealer providing execution and clearing services for equities and options, serving proprietary trading firms, hedge funds, and self-directed retail traders, with accounts introduced to outside clearing firms. Organized in Delaware in 2003, the firm launched its current business in 2012 in San Francisco as the operating subsidiary of Sage Brokerage Holdings, founded by brokerage executive Douglas Engmann, and later added a New York sales team.
Sagetrader, LLC – By the Numbers:
- CRD #: 137862
- Regulatory Events: 16
- Broker Employees: 6
Sagetrader, LLC – In the News:
FINRA v. Sagetrader, LLC (Case #2018057956001) – From July 2017 through November 2017, SageTrader mismarked approximately 9.7 million principal short sell orders, that resulted in approximately 390,000 executions, as long in violation of Rule 200(g) of Regulation SHO of the Securities and Exchange Act of 1934 and FINRA Rule 2010. In addition, from July 2017 through February 2018, SageTrader failed to locate shares available for borrowing for approximately 490,000 principal short sales in violation of Rule 203(b)(1) of Regulation SHO and FINRA Rule 2010. Further, from July 2017 through August 2022, SageTrader failed to establish, maintain, and enforce a supervisory system, including written supervisory procedures, reasonably designed to achieve compliance with Regulation SHO’s order marking and locate requirements in violation of FINRA Rules 3110 and 2010.
FINRA v. Sagetrader, LLC (Case #2022073705601) – From April 2016 through December 2019, SageTrader failed to establish and implement anti-money laundering (AML) policies and procedures reasonably expected to detect and cause the reporting of suspicious activity, in violation of FINRA Rules 3310(a) and 2010.
FINRA v. Sagetrader, LLC (Case #2017053210201) – From 2013 through 2019 (the “Relevant Period”), Sagetrader failed to reasonably supervise for potentially manipulative trading on its platforms. Throughout the Relevant Period, Sagetrader provided routing and execution services to domestic and foreign entities, which were comprised of hundreds to thousands of individual day traders. Prior to 2015, the Firm lacked a supervisory system to detect potentially manipulative trading such as layering, spoofing, wash trades, or marking the close. In 2015, Sagetrader implemented an automated surveillance system that generated alerts to monitor for various forms of potential manipulation. However, the system failed to capture 70 traders of a client for five months. In addition, the Firm’s review of the surveillance alerts was unreasonable. Sagetrader had limited staff and other resources to sufficiently review and resolve alerts for potentially manipulative trading, which, by 2018, totaled more than 500,000 alerts per year. Further, the Firm’s guidance to and supervision of the assigned reviewers was unreasonable. As a result, Sagetrader violated NASD Rule 3010 and FINRA Rules 3110 and 2010.
FINRA v. Sagetrader, LLC (Case #2016049897301) – In connection with matter 20160498973, the Market Quality Team of the Department of Market Regulation (“Market Regulation”) reviewed the firm’s compliance with FINRA Rule 5131 during the period from July 1 through December 31, 2015 (the “review period”). Based on its review, the staff found that the firm violated FINRA Rules 2010, 3110 and 5131(d)(4).
Gana Weinstein LLP has successfully handled hundreds of customer investment disputes with their brokerage firms. Our attorneys can help you detect and uncover suspicious activity in your accounts. Our consultations are free and we welcome all inquiries.