Cboe censures Ronin Capital for violation of net capital requirements
Cboe Exchange, Inc has censured Ronin Capital, LLC for alleged rule violations.
The matter originated from three separate notifications Ronin made in March and July 2020, to Cboe, its Designated Examining Authority. Ronin reported to Cboe through those notifications that the Firm’s net capital was below the minimum amount required by Section 15(c) of the Exchange Act and Rule 15c3-1 thereunder on March 16, 18, 19, and 20, 2020. It was determined that Ronin’s net capital was also below the minimum amount on 12 trade dates between April 20 and May 7, 2020.
In March 2020, Ronin experienced significant trading losses due to a sudden price drop in an equity position and market volatility affecting other Firm positions. The losses caused the Firm’s net capital to fall below the required $250,000 minimum on March 16, 18, 19, and 20. Ronin submitted notifications to Cboe on March 17, 18, and July 27, 2020 pursuant to Exchange Act Rule 17a-11(a)(1) disclosing the net capital deficiencies.
Additionally, Ronin incorrectly classified in its April 2020 net capital calculations a clearing deposit it had with the Fixed Income Clearing Corporation (FICC) as an allowable asset for the purpose of net capital. As a result, Ronin’s net capital also fell below the required $250,000 minimum amount on 12 trade dates between April 20 and May 7, 2020.
In light of the alleged rule violations described above, and prior relevant disciplinary history, the Firm consented to the imposition of a censure. Cboe says this sanction balances the significance of the violations with the financial condition of the firm, the fact that the Firm filed a full BDW, terminated its registration, and wound down its business.