Velox Clearing LLC will pay a US$1.3 million fine and retain an independent consultant as part of a settlement with the Financial Industry Regulatory Authority (FINRA), following a series of compliance failures spanning over five years.
FX News Group reports that the clearing firm, which provides services to foreign financial institutions trading low-priced, thinly traded securities via omnibus accounts, was found to have operated without an anti-money laundering (AML) program reasonably tailored to its risk exposure. According to FINRA, from January 2019 onward, Velox failed to detect or investigate indicators of market manipulation such as spoofing, layering, bid support, and marking the close—activities that are typically red flags in high-risk trading environments.
In addition to AML violations under FINRA Rules 3310 and 2010, the firm also breached several supervision and recordkeeping obligations. It failed to monitor and retain business-related communications conducted on non-firm platforms, in violation of both SEC and FINRA rules.
No adequate supervision
Further findings show that between January 2019 and February 2024, Velox did not adequately supervise employees’ outside brokerage accounts, another requirement under FINRA Rule 3110(d).
The sanctions include censure alongside the financial penalty. As part of the settlement, Velox has neither admitted nor denied the findings but has agreed to implement corrective measures under the guidance of an independent compliance consultant.
