Redbridge Securities Fined by FINRA
The Financial Industry Regulatory Authority (FINRA) said Friday that it has fined Redbridge Securities LLC $475,000 for multiple compliance failures.
The regulator revealed in a filing that the failures included deficiencies in its anti-money laundering (AML) program and market manipulation oversight.
According to FINRA, between September 2019 and October 2023, Redbridge, which provides self-directed trading to retail investors, failed to establish an AML program reasonably designed to detect and report suspicious activity.
The firm’s oversight weaknesses is said to have resulted in missed red flags, such as customers engaging in potentially manipulative trading patterns and transactions involving low-priced securities linked to issuers with financial connections to Redbridge customers.
In addition, the firm reportedly did not implement a reasonable system to verify customer identities or risk profiles.
FINRA said it found that Redbridge’s customer identification procedures failed to account for risks posed by clients from high-risk jurisdictions, including China.
The firm also neglected to follow up on inconsistencies between customer financial profiles and their trading activities.
Furthermore, Redbridge did not conduct adequate independent AML testing in 2019 and 2020 and failed to perform any such testing in 2021. In addition, the regulator said the firm also lacked a robust supervisory system to prevent market manipulation, failing to properly monitor trading behaviours such as wash trades and spoofing.
As part of the settlement, Redbridge agreed to retain an independent consultant to review and improve its compliance policies. The firm neither admitted nor denied FINRA’s findings but accepted the sanctions to resolve the matter.
