FINRA Hits BD for Violating Day Trading Margin Rules and Reg. T
FINRA fined a large broker-dealer $200,000 for violating pattern day trading margin rules and for extending credit in violation of Regulation T. FINRA cited the BD for failing to halt pattern day traders whose margin account balance fell below $25,000. Instead, the BD merely sent warnings. FINRA also imposed the fine for allowing customers to bypass time limits specified in Regulation T for liquidating leveraged transactions.
OUR TAKE: Although these seem like technical violations, failing to enforce the margin rules and Regulation T could give certain customers a market advantage over others.