May 6, 2020 / 9:08 PM / 18 days ago

Bloomberg Tradebook agrees to pay $5 million to settle SEC charges

WASHINGTON (Reuters) - The U.S. securities regulator on Wednesday said Bloomberg Tradebook LLC has agreed to pay a $5 million penalty to settle charges it made “material misrepresentations” over how the broker-dealer handled certain customer trade orders.

Tradebook violated an anti-fraud provision of U.S. securities laws by routing certain orders through unaffiliated dealers without informing the customers in an effort to cut costs when executing the orders, which began in 2010, the Securities and Exchange Commission said.

The firm did not admit or deny the SEC’s findings, the agency’s statement said. A representative for parent company Bloomberg L.P. said Tradebook was “pleased to have resolved this matter” and noted the firm ceased operating as an executing broker in U.S. stocks in September 2018.

The broker-dealer referred to the practice internally as the “Low Cost Router.” About 6.4 million customer orders between November 2010 and September 2018 were routed through these unaffiliated brokers, the SEC said.

“Contrary to representations in its marketing materials, Tradebook let unaffiliated brokers make decisions about the routing of certain customer trade orders in a way that lowered Tradebook’s costs,” Joseph Sansone, chief of the Enforcement Division’s Market Abuse Unit, said in the statement.

Reporting by Chris Prentice; Editing by Leslie Adler and Lisa Shumaker

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