A.I.M. Users Bulletin Board

[SFSecurity]

Hey Shifting Sands, Very interesting but not all that useful without a link to the article.

I'm not sure if this is what you are referring to or not but a quick read of Finra's Report seems to indicate they were manipulating the sale of OTC stuff for their own benefit.

SEC ADMIN RELEASE 34-79580 / DECEMBER 16, 2016: THE SECURITIES AND EXCHANGE COMMISSION ("COMMISSION") DEEMS IT APPROPRIATE AND IN THE PUBLIC INTEREST THAT PUBLIC ADMINISTRATIVE AND CEASE-AND-DESIST PROCEEDINGS BE, AND HEREBY ARE, INSTITUTED AGAINST WILSON-DAVIS & CO., INC. ("WDCO" OR THE "RESPONDENT"). AFTER AN INVESTIGATION, THE DIVISION OF ENFORCEMENT ALLEGES THAT FROM AT LEAST NOVEMBER 2011 THROUGH MAY 2013, WDCO WILLFULLY VIOLATED REGULATION SHO BY TAKING ADVANTAGE OF THE BONA-FIDE MARKET MAKING EXCEPTION TO THE "LOCATE" REQUIREMENT FOR SHORT SALES IN RULE 203(B)(2)(III) WITHOUT BEING ENTITLED TO RELY ON THE EXCEPTION. RULE 203(B)(1) OF REGULATION SHO REQUIRES A BROKER-DEALER, PRIOR TO EFFECTING A SHORT SALE IN AN EQUITY SECURITY FOR ITS OWN ACCOUNT, TO "LOCATE" A SOURCE OF BORROWABLE SECURITIES THAT CAN BE DELIVERED ON THE DATE THAT DELIVERY IS DUE, AND DOCUMENT SUCH LOCATE. RULE 203(B)(2)(III) PROVIDES A LIMITED EXCEPTION TO THE LOCATE REQUIREMENT FOR SHORT SALES EFFECTED BY A MARKET MAKER IN CONNECTION WITH BONA-FIDE MARKET MAKING ACTIVITIES IN THE SECURITIES FOR WHICH THE EXCEPTION IS CLAIMED. DURING THE RELEVANT TIME, WDCO CONSIDERED ALL OF ITS PROPRIETARY TRADING TO BE BONA-FIDE MARKET MAKING ACTIVITY AND RELIED ON THE BONA-FIDE MARKET MAKING EXCEPTION IN RULE 203(B)(2)(III). THIS RELIANCE WAS IMPROPER BECAUSE MUCH OF WDCO'S TRADING WAS NOT, IN FACT, BONA-FIDE MARKET MAKING. AS A RESULT, WDCO VIOLATED RULE 203(B)(1) OF REGULATION SHO. WHILE IMPROPERLY AVAILING ITSELF OF THE EXCEPTION, WDCO ENGAGED IN NUMEROUS SHORT SALES IN OVER-THE-COUNTER EQUITY SECURITIES THAT RESULTED IN SIGNIFICANT AND IMPROPER TRADING PROFITS. AS A RESULT OF THE CONDUCT, WDCO COMMITTED WILLFUL VIOLATIONS OF RULE 203(B)(1) OF REGULATION SHO.

DURING THE YEARS 2012, 2013, AND 2014, WDCO ALSO WILLFULLY VIOLATED SECTION 15(C)(3) OF THE EXCHANGE ACT AND RULE 15C3-5 BY FAILING TO HAVE CONTROLS AND SUPERVISORY PROCEDURES REASONABLY DESIGNED TO PREVENT THE ENTRY OF: (A) ORDERS THAT EXCEEDED APPROPRIATE PRE-SET CAPITAL THRESHOLDS, (B) ERRONEOUS ORDERS, AND (C) ORDERS UNLESS THERE HAS BEEN COMPLIANCE WITH ALL REGULATORY REQUIREMENTS THAT MUST BE SATISFIED ON A PRE-ORDER ENTRY BASIS AS REQUIRED BY RULE 15C3-5(B) AND (C). IN ADDITION, WDCO FAILED TO ESTABLISH, DOCUMENT AND MAINTAIN A SYSTEM FOR REGULARLY REVIEWING THE EFFECTIVENESS OF THE RISK MANAGEMENT CONTROLS AND SUPERVISORY PROCEDURES UNDER RULE 15C3-5(E), INCLUDING FAILING TO REVIEW PROPERLY ITS BUSINESS ACTIVITY IN CONNECTION WITH MARKET ACCESS TO ASSURE THE OVERALL EFFECTIVENESS OF ITS CONTROLS AND SUPERVISORY PROCEDURES AS WELL AS FAILING TO EXECUTE THE REQUIRED CHIEF EXECUTIVE OFFICER ("CEO") CERTIFICATIONS. AS A RESULT OF THE CONDUCT, WDCO COMMITTED WILLFUL VIOLATIONS OF SECTION 15(C)(3)OF THE EXCHANGE ACT AND RULE 15C3-5(B), (C) AND (E) THEREUNDER.

THE SECURITIES AND EXCHANGE COMMISSION ("COMMISSION") DEEMS IT APPROPRIATE AND IN THE PUBLIC INTEREST THAT PUBLIC ADMINISTRATIVE AND CEASE-AND-DESIST PROCEEDINGS BE, AND HEREBY ARE, INSTITUTED AGAINST WILSON-DAVIS & CO., INC. ("WDCO" OR THE "RESPONDENT"). AFTER AN INVESTIGATION, THE DIVISION OF ENFORCEMENT ALLEGES THAT FROM AT LEAST NOVEMBER 2011 THROUGH MAY 2013, WDCO WILLFULLY VIOLATED REGULATION SHO BY TAKING ADVANTAGE OF THE BONA-FIDE MARKET MAKING EXCEPTION TO THE "LOCATE" REQUIREMENT FOR SHORT SALES IN RULE 203(B)(2)(III) WITHOUT BEING ENTITLED TO RELY ON THE EXCEPTION. RULE 203(B)(1) OF REGULATION SHO REQUIRES A BROKER-DEALER, PRIOR TO EFFECTING A SHORT SALE IN AN EQUITY SECURITY FOR ITS OWN ACCOUNT, TO "LOCATE" A SOURCE OF BORROWABLE SECURITIES THAT CAN BE DELIVERED ON THE DATE THAT DELIVERY IS DUE, AND DOCUMENT SUCH LOCATE. RULE 203(B)(2)(III) PROVIDES A LIMITED EXCEPTION TO THE LOCATE REQUIREMENT FOR SHORT SALES EFFECTED BY A MARKET MAKER IN CONNECTION WITH BONA-FIDE MARKET MAKING ACTIVITIES IN THE SECURITIES FOR WHICH THE EXCEPTION IS CLAIMED. DURING THE RELEVANT TIME, WDCO CONSIDERED ALL OF ITS PROPRIETARY TRADING TO BE BONA-FIDE MARKET MAKING ACTIVITY AND RELIED ON THE BONA-FIDE MARKET MAKING EXCEPTION IN RULE 203(B)(2)(III). THIS RELIANCE WAS IMPROPER BECAUSE MUCH OF WDCO'S TRADING WAS NOT, IN FACT, BONA-FIDE MARKET MAKING. AS A RESULT, WDCO VIOLATED RULE 203(B)(1) OF REGULATION SHO. WHILE IMPROPERLY AVAILING ITSELF OF THE EXCEPTION, WDCO ENGAGED IN NUMEROUS SHORT SALES IN OVER-THE-COUNTER EQUITY SECURITIES THAT RESULTED IN SIGNIFICANT AND IMPROPER TRADING PROFITS. AS A RESULT OF THE CONDUCT, WDCO COMMITTED WILLFUL VIOLATIONS OF RULE 203(B)(1) OF REGULATION SHO.

DURING THE YEARS 2012, 2013, AND 2014, WDCO ALSO WILLFULLY VIOLATED SECTION 15(C)(3) OF THE EXCHANGE ACT AND RULE 15C3-5 BY FAILING TO HAVE CONTROLS AND SUPERVISORY PROCEDURES REASONABLY DESIGNED TO PREVENT THE ENTRY OF: (A) ORDERS THAT EXCEEDED APPROPRIATE PRE-SET CAPITAL THRESHOLDS, (B)ERRONEOUS ORDERS, AND (C) ORDERS UNLESS THERE HAS BEEN COMPLIANCE WITH ALL REGULATORY REQUIREMENTS THAT MUST BE SATISFIED ON A PRE-ORDER ENTRY BASIS AS REQUIRED BY RULE 15C3-
5(B) AND (C). IN ADDITION, WDCO FAILED TO ESTABLISH, DOCUMENT AND MAINTAIN A SYSTEM FOR REGULARLY REVIEWING THE EFFECTIVENESS OF THE RISK MANAGEMENT CONTROLS AND SUPERVISORY PROCEDURES UNDER RULE 15C3-5(E), INCLUDING FAILING TO REVIEW PROPERLY ITS BUSINESS ACTIVITY IN CONNECTION WITH MARKET ACCESS TO ASSURE THE OVERALL EFFECTIVENESS OF ITS CONTROLS AND SUPERVISORY PROCEDURES AS WELL AS FAILING TO EXECUTE THE REQUIRED CHIEF EXECUTIVE OFFICER ("CEO") CERTIFICATIONS. AS A RESULT OF THE CONDUCT, WDCO COMMITTED WILLFUL VIOLATIONS OF SECTION 15(C)(3) OF THE EXCHANGE ACT AND RULE ND RULE 15C3-5(B), (C) AND (E).

And this is only one of the 54 issues in the report.