The Securities and Exchange Commission announced the censure of a New York-based broker dealer for longstanding compliance violations.
The SEC said OTC Link LLC was ordered to pay a $575,000 civil penalty for longstanding violations of Regulation Systems Compliance and Integrity. According to the settled order, OTC Link failed to establish, maintain and enforce certain written policies and procedures required by Regulation SCI for OTC Link ATS – an alternative trading system for over-the-counter securities that it operates – between August 2016 and March 2025. Those policies and procedures included ones pertaining to system security, access control, and application vulnerability management, testing and remediation. Although SEC staff examined OTC Link ATS several times and flagged certain required policies and procedures, the company repeatedly failed to remedy the deficiencies.
“OTC Link’s continual failure to remediate deficiencies even after they were repeatedly flagged by Division of Examinations staff reflects a disregard for their findings and the overall examinations process and justifies a meaningful penalty,” Laura D’Allaird, chief of the Division of Enforcement’s Cyber and Emerging Technologies Unit, said. “All SCI entities are expected to take their regulatory responsibilities seriously and promptly fix issues when they’re identified.”
The SEC said OTC Link LLC lacked written policies and procedures designed to ensure that OTC Link ATS’S SCI systems and indirect SCI systems had level of capacity, integrity, resiliency, availability, and security adequate to maintain the company’s operational capability and to promote the maintenance of fair and orderly markets. By failing to have required minimum policies and procedures, to review the effectiveness of its policies and procedures, and to take prompt action to remedy its deficiencies, the SEC found that OTC Link LLC violated SEC rules. Without admitting to the findings, the company agreed to a cease-and-desist order, a censure and the civil penalty.