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FINRA Disciplinary Proceeding Against Knight Capital Americas, L.P.

On April 25, 2013, FINRA announced that it had fined Knight Capital Americas, L.P. $20,000.00, and that they were required to pay $890.14, plus interest, in restitution to customers.

FINRA’s findings state that during the period of January 1, 2009 through March 31, 2009 there were 21 instances when the Firm failed to contemporaneously or partially execute a customer limit order in seven NASDAQ securities after it traded each subject security for its own market-making account at a price that would have satisfied each customer’s limit order. The conduct described in this paragraph violates FINRA Rule 2010 and NASD IM-2110-2.

During the same time period outlined above there were also 31 instances where Knight Capital Americas, L.P. accepted customer market orders, traded for their own account at prices that would have satisfied the customer market orders, and failed to immediately thereafter execute the customer market orders up to the size and at the same price at which it traded for its own account or a at better price.  This is a distinct violation of FINRA Rule 2010 and NASD Rule 2111(b)

In settling this matter, Knight Capital Americas, L.P. neither admitted nor denied the charges, but consented to the entry of FINRA’s findings.