The SEC noted that 6.4 million Bloomberg Tradebook customers were executed based on routing decisions by unaffiliated broker-dealers. The practice was inconsistent with its marketing materials, which stated that customer orders would be routed by its advanced technology based on factors such as price and liquidity.
In addition, the Commission observed that Bloomberg Tradebook provided unverifiable execution venue information to customers for over a million orders routed using Low Cost Router.
In a statement, Joseph G. Sansone, Chief of the Enforcement Division’s Market Abuse Unit, commented, “Contrary to representations in its marketing materials, Tradebook let unaffiliated brokers make decisions about the routing of certain customer trade orders in a way that lowered Tradebook’s costs. Broker-dealers must take care to provide customers with accurate and up to date information about important features of their order routing services.”
Bloomberg Tradebook agreed to pay $5 million to settle the SEC allegations
According to the SEC, Bloomberg Tradebook submitted an offer to settle without admitting or denying the allegations. It agreed to be censured and to pay a penalty of $5 million, which showed its significant cooperation with the Commission’s staff.
