On 12 August 2022, SEC imposed $125K fine on B/D for naked short selling.
- SEC reported settlement for violations of bona fide market making in short sell trades.
- Settlement names defendant broker-dealer firm IMC Chicago LLC, for violations of Regulation SHO and Rule 203(b)(1) thereunder, (17 CFR 242.203(b)(1)) re short sales.
- From June 2017 - November 2020, defendant executed millions of trades claiming exemption as bona fide market maker and relief from locate requirements for making short sales.
- Violations made through the firm's single-dealer platform (SDP) where IMC did not engage in continuous, firm quotations but rather posted indications of interest (IOIs).
- SDP served as the firm's trading platform where it acted as the sole counterparty to its principal trades; IOIs were advertised without a price and were neither bid nor offer.
- The execution system assigned a price and determined to execute the trade, but the firm did not locate/borrow shares to support the short sale regime under its SDP.
- Penalty of $125K, censure, cease-and-desist without admission or denial of findings.