Bloomberg Tradebook agreed to pay $5 million and be censured to settle charges by the Securities and Exchange Commission claiming the Bloomberg division made “material misstatements” and omitted “material facts” about how it handled certain customer trade orders, the regulator said Wednesday.
The SEC’s order found that Tradebook violated an antifraud provision of the securities laws. Without admitting or denying the findings in the SEC’s order, Tradebook agreed to the regulator’s sanctions, including the $5 million fine, the SEC said. That dollar amount reflected Tradebook’s significant cooperation with the SEC staff, the regulator said.
“We are pleased to have resolved this matter with the SEC, which pertains to a period during which Tradebook was operating as an executing broker for U.S. stocks,” a Bloomberg spokeswoman said Thursday.
“Unrelated to this matter, Tradebook ceased to operate as an executing broker in U.S. stocks in September 2018,” she pointed out, adding: “We remain focused on ensuring that our business maintains best practices and the highest standards to bring transparency and fairness to the markets.”
The SEC’s order found that Tradebook routed certain customer orders — mainly orders entered by customers who paid relatively low commission rates — using an undisclosed arrangement that the firm referred to internally as the “Low Cost Router.”