SEC Charges TMC Bonds With Failing to Protect Confidential Subscriber Information
Washington, D.C.--(Newsfile Corp. - September 24, 2019) - The Securities and Exchange Commission today announced that TMC Bonds LLC, operator of an alternative trading system (ATS) for fixed income securities, has agreed to pay $2.1 million to settle charges arising from TMC Bonds’ failure to protect confidential subscriber information.
The SEC’s order finds that, between at least January 2016 and June 2018, TMC Bonds publicly touted its anonymous trading platform, but, in fact, disclosed the identities of certain firms seeking to trade corporate bonds to potential counterparties over 2,500 times during a two-and-a-half year period. According to the order, these disclosures occurred because TMC Bonds failed to establish and implement adequate safeguards or procedures to protect the confidential trading information of its subscribers. The SEC’s order also finds that TMC Bonds failed to provide notice to the SEC that it was operating in a way that was inconsistent with its SEC filings.
“Alternative trading systems -- whether they trade equities or fixed income securities -- must have in place adequate policies and procedures to protect their subscribers’ confidential trading information. Despite advertising an anonymous platform, TMC Bonds failed to meet its Reg. ATS obligation,” said Joseph Sansone, Chief of the SEC’s Market Abuse Unit.
Without admitting or denying the findings, TMC Bonds consented to the entry of the SEC’s order finding that it violated Rules 301(b)(10) and 301(b)(2) of Regulation ATS, directing TMC Bonds to cease and desist from committing or causing any future violations of those provisions, censuring TMC Bonds, and ordering it to pay a $2.1 million penalty.
The SEC’s investigation has been conducted by Martin Zerwitz, John P. Lucas, and Deborah A. Tarasevich of the SEC’s Cyber Unit and Mandy Sturmfelz of the SEC’s Market Abuse Unit. The case was supervised by Mr. Sansone.