SEC Charges ATSI for Failing to File Suspicious Activity Reports
The SEC announced charges against Archipelago Trading Services Inc. (ATSI) for failing to file hundreds of legally required Suspicious Activity Reports (SARs) between August 2012 and September 2020. The charges related to transactions in OTC securities executed on ATSI’s alternative trading system (ATS). ATSI has agreed to pay $1.5 million to settle the charges without admitting or denying the SEC’s findings.According to the SEC’s order, ATSI failed to establish an anti-money laundering surveillance program for its transactions until September 2020 and, therefore, failed to surveil for fraudulent activity. As a result, the SEC’s order found ATSI had failed to file at least 461 SARs, most of which involved microcap or penny stock securities. This violated Section 17(a) of the Securities Exchange Act and Rule 17a-8. The investigation was conducted by the Chicago Regional Office with assistance from other SEC teams and divisions. ATSI agreed to a censure and a cease-and-desist order in addition to the penalty.