FINRA fines Justly Markets for failure to preserve memoranda of over 95M orders
Justly Markets LLC, formerly known as DBOT ATS, LLC, has agreed to pay a fine of $100,000 as a part of a settlement with the Financial Industry Regulatory Authority (FINRA).
From April 2017 to October 2019, the firm received over 95 million orders from its broker-dealer customers. The firm failed to preserve memoranda for all orders received prior to May 1, 2018. For orders received between May 1, 2018 and October 31, 2019, the firm used a third-party vendor to preserve order memoranda.
When the firm changed third-party vendors in October 2019, the original vendor deleted the firm’s order memoranda. The firm had not otherwise preserved the records.
The firm closed its ATS in February 2020 and has since reorganized as a private placement agent.
Therefore, Respondent violated, Section 17(a) of the Exchange Act, Exchange Act Rule 17a-4(b)(l), and FINRA Rules 4511 and 2010.
From April 2017 to February 2020, the firm failed to establish and maintain a supervisory system to achieve compliance with certain books and records requirements. The firm had no policies or procedures, and did not conduct any supervisory reviews, to ensure that the firm made and kept current, reviewed the accuracy of, or preserved order memoranda.
Therefore, the firm violated FINRA Rules 31 lO(a) and 2010.
On top of the fine, the firm has agreed to a censure.
Justly became a FINRA member in November 2012. The firm, which was known as DBOT ATS, LLC from November 2016 until September 2021, began operating as an alternative trading system (ATS) in April 2017. As an ATS, the firm matched, on an automated basis, buy and sell orders in OTC securities that it received from broker-dealers.
The firm ceased operations and de-registered its ATS with the United States Securities and Exchange Commission as of February 28, 2020. The firm now operates a private placement platform where it sells securities offered under Rule 506 of Regulation D and Regulation A to accredited investors and institutional clients.