(Reuters) – An electronic trading platform owned by JPMorgan Chase & Co. will pay a $ 2.75 million fine to liquidate the U.S. Securities and Exchange Commission and charge that it has not registered as a broker for more than a decade, the regulator said on Tuesday.
The enforcement action against Neovest Inc. prompted a rare 2,000-word disagreement from Hester Peirce, one of two Republicans in the Five-Person Commission, who said it could counteract innovation and was "unknown to the world's strongest securities market."
Neovest represents the first SEC case to introduce an order and execution management system that facilitates electronic trading by acting as an unregistered broker in 2005, but still continued to handle and accept payment for transactions, requesting clients and brokers through its website, bank conferences and
Neovest agreed to the fine and a mistrust without acknowledging or denying wrongdoing.
Mr Peirce said that Neovest did not meet the statutory definition of a broker, and that the SEC in March 2020 apologized for similar behavior from another. companies that applied for and received a letter without action.
“This action will lead prospective innovators. to draw the conclusion that they can not enter this space until they have hired consultants, spent months working with our staff and written on a set of inflexible terms for their business, ”Peirce wrote.
The SEC said broker-dealer registrations help clients by offering greater regulatory oversight and protection to protect their information and prevent identity theft.
"Neovest has taken a number of steps to improve its security measures in recent years," said JPMorgan spokesman Brian Marchiony in an email. "There is no evidence that customer data is compromised in any way."
Utah-based Neovest describes itself as a leading "broker-neutral" platform that allows clients to direct orders to buy and sell shares and options directly to more than 360 brokers.