Cboe BZX Exchange, Inc has posted its disciplinary decision notice regarding Mirae Asset Securities (USA) Inc.

Between October 2022 and the present (the “Relevant Period”), Mirae failed to reasonably surveil for instances of potentially manipulative trading where multiple customers worked in concert to potentially manipulate the market, such as potential prearranged or coordinated trading.

The firm had no system to detect potential manipulation effected by groups of accounts working in concert, such as potential prearranged or coordinated trading by multiple customers within an omnibus account.

In addition, the firm’s written supervisory procedures (WSPs) failed to describe how trading patterns that could indicate potentially prearranged or coordinated trading would be identified, or how they would be investigated, when the transactions were executed within a single omnibus account, nor did the WSPs address the circumstances in which the Firm should inquire about the ultimate beneficial owners of securities held in an omnibus account.

During the Relevant Period, Mirae also failed to establish and maintain WSPs reasonably designed to detect momentum ignition, when a market participant initiates a series of orders or transactions in an attempt to ignite a price movement in that market or a related market. The firm’s procedures did not describe this trading pattern or how to identify it, and were silent regarding escalation of trade reviews demonstrating this pattern or how to resolve them.

As a result, Mirae sent orders to the Exchange that the firm did not reasonably surveil for potentially manipulative trading activity.

The conduct described above constitutes violations of Exchange Rule 5.1 by the firm, in that the firm failed to establish, maintain and enforce a reasonably designed supervisory system, including reasonably designed WSPs, to enable the firm to supervise orders for potential manipulative trading.

Mirae does not have any prior relevant disciplinary history specifically related to supervision of potentially manipulative trading.

In light of the alleged rule violations, the firm consented to the imposition of the following sanctions:

• A censure; and
• A monetary fine in the amount of $12,400.

The firm neither admits nor denies that violations of Exchange Rules have been committed.