Velox Clearing LLC has agreed to pay a fine of $1.3 million as a part of a settlement with the Financial Industry Regulatory Authority (FINRA).

Velox Clearing provides clearing services to a number of foreign financial institutions that transact in thinly traded, low-priced securities through omnibus accounts.

Since January 2019, Velox failed to establish and implement an AML program reasonably designed to detect and cause the reporting of suspicious transactions given this business, in violation of FINRA Rules 3310 and 2010.

As a result, the firm failed to detect or investigate red flags of spoofing, layering, bid support, and marking the close.

The firm also has failed to retain and review business communications on non-firm communications platforms, in violation of Exchange Act § 17(a), Exchange Act Rule 17a-4 and FINRA Rules 3110, 4511, and 2010.

Additionally, between January 2019 and February 2024, the firm failed to reasonably supervise outside brokerage accounts in violation of FINRA Rule 3110(d).

For these violations Velox was censured, fined $1.3 million, and has agreed to retain an independent consultant.