Dark pool equities trading platform, BIDS Trading has been slapped with a censure order and a fine of $200,000 by the Financial Industry Regulatory Authority (FINRA) for overstating its advertised trading volume.

BIDS configured its systems to automatically advertise daily trading volume from July 2018 to August 2019. The company used two third-party service providers, Bloomberg and Thompson Reuters, for publishing the data.

Multiple Lapses

However, according to the FINRA order, the trading platform overstated the executed trade volume to the third-party service providers because of two separate but related system changes. The implemented changes inadvertently triggered and exacerbated a programming defect in the trade advertising software and resulted in BIDS submitting multiple end-of-day volumes reports in the same symbols.

The company made the first change in July 2018 that caused the overstating of advertised trading volume in 151 instances, resulting in the overstating of 12,298,256 shares for 92 securities.

The second instant of change came in May 2019 when the company reconfigured its servers. That caused the platform to overstate trade volume in 1,890 instances, which was for 427,620,013 shares for 951 securities.

Additionally, the trading platform was held by the regulator for not having a supervisory system to determine the accuracy of the advertised trades.
BIDS Trading, which is owned by Cboe, already agreed to pay the monetary sanction and has issued an acceptance, waiver and consent (AWS) letter.

“[The AWC letter] is submitted on the condition that, if accepted, FINRA will not bring any future actions against Respondents alleging violations based on the same factual findings described,” the letter stated.

Meanwhile, Cboe last March brought in financial industry veteran Stephen Berte to head BIDS Trading as the new President. Furthermore, he worked with other BIDS competitors like Liquidnet and has more than two decades of work experience.

Dark pool equities trading platform, BIDS Trading has been slapped with a censure order and a fine of $200,000 by the Financial Industry Regulatory Authority (FINRA) for overstating its advertised trading volume.

BIDS configured its systems to automatically advertise daily trading volume from July 2018 to August 2019. The company used two third-party service providers, Bloomberg and Thompson Reuters, for publishing the data.

Multiple Lapses

However, according to the FINRA order, the trading platform overstated the executed trade volume to the third-party service providers because of two separate but related system changes. The implemented changes inadvertently triggered and exacerbated a programming defect in the trade advertising software and resulted in BIDS submitting multiple end-of-day volumes reports in the same symbols.

The company made the first change in July 2018 that caused the overstating of advertised trading volume in 151 instances, resulting in the overstating of 12,298,256 shares for 92 securities.

The second instant of change came in May 2019 when the company reconfigured its servers. That caused the platform to overstate trade volume in 1,890 instances, which was for 427,620,013 shares for 951 securities.

Additionally, the trading platform was held by the regulator for not having a supervisory system to determine the accuracy of the advertised trades.
BIDS Trading, which is owned by Cboe, already agreed to pay the monetary sanction and has issued an acceptance, waiver and consent (AWS) letter.

“[The AWC letter] is submitted on the condition that, if accepted, FINRA will not bring any future actions against Respondents alleging violations based on the same factual findings described,” the letter stated.

Meanwhile, Cboe last March brought in financial industry veteran Stephen Berte to head BIDS Trading as the new President. Furthermore, he worked with other BIDS competitors like Liquidnet and has more than two decades of work experience.