NASDAQ PHLX LLCNOTICE OF ACCEPTANCE OF AWC

Certified, Return Receipt Requested
TO:

SG Americas Securities, LLC
Mr. Jeffrey Rosen
Managing Director
245 Park Avenue
New York, NY 10167

FROM:

Nasdaq PHLX LLC ("PHLX")
do Financial Industry Regulatory Authority ("FINRA")
Department of Enforcement
9509 Key West Avenue
Rockville, MD 20850

DATE:

October 24, 2018

RE:

Notice of Acceptance of Letter of Acceptance, Waiver and Consent No. 20150483276-02

Please be advised that your above-referenced Letter of Acceptance, Waiver and Consent ("AWC") hasbeen accepted on October 24, 2018 by the PHLX Review Council's Review Subcommittee, or by theOffice of Disciplinary Affairs on behalf of the PHLX Review Council, pursuant to PHLX Rule 9216. A
copy of the AWC is enclosed herewith.
You are again reminded of your obligation, if currently registered, immediately to update your Uniform
Application for Broker-Dealer Registration ("Form BD") to reflect the conclusion of this disciplinaryaction. Additionally, you must also notify FINRA (or PHLX if you are not a member of FINRA) inwriting of any change of address or other changes required to be made to your Form BD.
You are reminded that Section I of the attached Letter of Acceptance, Waiver, and Consent includes anundertaking. In accordance with the terms of the AWC, a registered principal of the firm is required tonotify the Compliance Assistant, Department of Enforcement, 9509 Key West Avenue, Rockville, MD
20850, of completion of the undertaking.
You will be notified by the Registration and Disclosure Department regarding sanctions if a suspension
has been imposed and by Nasdaq's Finance Department regarding the payment of any fine if a fine hasbeen imposed.

SG Americas Securities, LLC
Page 2

If you have any questions concerning this matter, please contact me at (240) 386-6189.

ack Macken
Senior Counsel
Department of Enforcement, FINRA
Signed on behalf of PHLX
Enclosure
FINRA District 10 New York
Michael Solomon
Senior Vice President and Regional Director(Via email)Counsel for Respondent
Brendan Gibbon
Director and Counsel - Litigation, Enforcement & Investigations
Societe Generale - Americas
245 Park Ave
New York, NY 10167

NASDAQ PHLX LLCLETTER OF ACCEPTANCE, WAIVER AND CONSENT
NO. 20150483276-02TO:

Nasdaq PHLX LLC
do Department of Enforcement
Financial Industry Regulatory Authority ("FINRA")RE:

SG Americas Securities, LLC, Respondent
Broker-Dealer
CRD No. 128351

Pursuant to Rule 9216 of Nasdaq PHLX LLC ("PHLX" or the "Exchange") Code of Procedure,
SG Americas Securities, LLC, (the "firm") submits this Letter of Acceptance, Waiver andConsent ("AWC") for the purpose of proposing a settlement of the alleged rule violations
described below. This AWC is submitted on the condition that, if accepted, PHLX will not bringany future actions against the firm alleging violations based on the same factual findings
described herein.
I.
ACCEPTANCE AND CONSENTA.

The firm hereby accepts and consents, without admitting or denying the findings, andsolely for the purposes of this proceeding and any other proceeding brought by or on
behalf of PHLX, or to which PHLX is a party, prior to a hearing and without anadjudication of any issue of law or fact, to the entry of the following findings by PHLX:BACKGROUND
The firm has been registered with the Securities and Exchange Commission and FINRAsince April 23, 2004, and has been a member of PHLX since April 26, 2004.
RELEVANT DISCIPLINARY HISTORYOn April 10, 2015, FINRA accepted an AWC in which the firm was censured and fined,
among other fines, $10,000 for equity trade reporting violations.
On December 15, 2015, FINRA accepted an AWC in which the firm was censured andfined $22,500 for, among others, equity trade reporting violations.
On December 30, 2015, FINRA accepted an AWC in which the firm was censured andfined, among other fines, $10,000 for equity trade reporting violations.

STAR No. 20150483276 (JM)

SUMMARYIn Matter No. 20150483276, the Trade Reporting Team of FINRA's Department ofMarket Regulation (the "staff') reviewed the firm's compliance with PHLX rules
requiring members to input the correct capacity codes on equity orders entered into
exchange systems. The entry of inaccurate capacity codes causes the audit trail to beinaccurate which can impact surveillance patterns and adversely affect self-regulatoryorganizations' ("SROs") ability to surveil for conduct that may violate the SROs' rules
and the federal securities laws.
As a result of its review, the staff determined that the firm input millions of orders withincorrect capacity codes as the result of three system issues. The issues, which varied innature, persisted between May 22, 2012 and August 17, 2016. Specifically, as the resultof one system issue, a firm account improperly marked certain principal orders with anagency capacity code between May 22, 2012 and July 16, 2014.1 As the result of asecond system issue, the firm improperly marked certain agency orders entered on behalfof the firm's corporate parent with a principal capacity code between November 1, 2013
and May 28, 2015. As the result of a third system issue, the firm also improperly marked
certain agency orders entered on behalf of the firm's corporate parent with a principal
capacity code between March 1, 2015 and August 17, 2016. In total, the firm input
15,627,626 orders with incorrect capacity codes between May 22, 2012 and August 17,
2016, as the result of these issues, of which 406,642 orders were entered on theExchange.
In addition, the firm's supervisory system, including its written supervisory procedures("WSPs"), did not provide for supervision reasonably designed to achieve compliancewith respect to the submission of accurate capacity codes due in large part to systems
issues. Based on this review, the firm violated PHLX Rules 911(a)(6), 707, and 748.
FACTS AND VIOLATIVE CONDUCT
1. Between November 1, 2013 and May 28, 2015, and March 1, 2015 and August 17,
2016, as the result of two separate system issues, the firm failed to input the correct
capacity with respect to new orders entered on multiple exchanges. Specifically, as
the result of one issue, the firm improperly marked certain agency orders entered onbehalf of the firm's corporate parent with a principal capacity code between
November 1, 2013 and May 28, 2015. As the result of a second issue, the firm
improperly marked certain agency orders entered on behalf of the firm's corporate
parent with a principal capacity code between March 1, 2015 and August 17, 2016.
As the result of these two issues, the firm input 15,522,708 agency orders withprincipal capacity codes on multiple exchanges, of which 406,642 orders wereentered on the Exchange. The foregoing conduct constitutes separate and distinct
violations of PHLX Rules 911(a)(6) and 707.

I Although this issue had an impact on orders the firm entered on multiple exchanges, the review did not identify
any principal orders that the firm entered on the Exchange with an agency capacity code during the period reviewed.

22. During the period reviewed, the firm's supervisory system, including its WSPs, did
not provide for supervision reasonably designed to prevent and detect violations ofthe applicable securities laws and regulations, and PHLX Rule 911(a)(6), requiringfirms to enter accurate capacity information, including whether the firm acted in a
principal, agent, or riskless principal capacity. Specifically, the firm's WSPs required
quarterly and monthly reviews of samples of orders. However, given the breadth of
the firm's trading, the frequency of the reviews was not reasonably designed to ensurecompliance. The conduct described in this paragraph constitutes separate and distinct
violations of PHLX Rules 748 and 707.
B.

The firm also consents to the imposition of the following sanctions:
1. A censure, a fine in the amount of $175,000, of which $10,000 shall be paid toPHLX (comprised of $5,000 for the capacity marking violations and $5,000 for
the related supervisory violation); and2. An undertaking to submit to the COMPLIANCE ASSISTANT, DEPARTMENTOF ENFORCEMENT, 9509 KEY WEST AVENUE, ROCKVILLE, MD 20850,
no later than 30 business days after the AWC becomes final, a signed, datedletter, or an e-mail from a work-related account of the registered principal toMarketRegulationComp@finra.org, providing the following information: (1) areference to this matter; (2) a representation that the firm has revised its WSPs toaddress the deficiencies described in paragraph I.A.2; and (3) the date the revised
procedures were implemented.
Respondent agrees to pay the monetary sanction(s) in accordance with its executedElection of Payment Form.
Respondent specifically and voluntarily waives any right to claim that it is unable to pay,
now or at any time hereafter, the monetary sanction(s) imposed in this matter.
The sanctions imposed herein shall be effective on a date set by FINRA staff.

3

II.
WAIVER OF PROCEDURAL RIGHTS
Respondent specifically and voluntarily waives the following rights granted under PHLX's Codeof Procedure:A.

To have a Formal Complaint issued specifying the allegations against the firm;B.

To be notified of the Formal Complaint and have the opportunity to answer theallegations in writing;C.

To defend against the allegations in a disciplinary hearing before a hearing panel,to have a written record of the hearing made and to have a written decision issued;
andD.

To appeal any such decision to the PHLX Review Council and then to the U.S.
Securities and Exchange Commission and a U.S. Court of Appeals.

Further, Respondent specifically and voluntarily waives any right to claim bias or prejudgmentof the Chief Regulatory Officer, the PHLX Review Council, or any member of the PHLX
Review Council, in connection with such person's or body's participation in discussions
regarding the terms and conditions of this AWC, or other consideration of this AWC, including
acceptance or rejection of this AWC.
Respondent further specifically and voluntarily waives any right to claim that a person violated
the ex parte prohibitions of Rule 9143 or the separation of functions prohibitions of Rule 9144,
in connection with such person's or body's participation in discussions regarding the terms andconditions of this AWC, or other consideration of this AWC, including its acceptance orrejection.

4

HI.
OTHER MATTERS
Respondent understands that:A.

Submission of this AWC is voluntary and will not resolve this matter unless anduntil it has been reviewed and accepted by FINRA's Department of Enforcement
and the PHLX Review Council, the Review Subcommittee, or the Office ofDisciplinary Affairs ("ODA"), pursuant to PHLX Rule 9216;

B.

If this AWC is not accepted, its submission will not be used as evidence to prove
any of the allegations against the Respondent; andC.

If accepted:

D.

1.

This AWC will become part of the Respondent's permanent disciplinary
record and may be considered in any future actions brought by PHLX or
any other regulator against the Respondent;

2.

PHLX may release this AWC or make a public announcement concerning
this agreement and the subject matter thereof in accordance with PHLX
Rule 8310 and IM-8310-3; and3.

Respondent may not take any action or make or permit to be made any
public statement, including in regulatory filings or otherwise, denying,directly or indirectly, any finding in this AWC or create the impressionthat the AWC is without factual basis. Respondent may not take any
position in any proceeding brought by or on behalf of PHLX, or to which
PHLX is a party, that is inconsistent with any part of this AWC. Nothing
in this provision affects the Respondent's right to take legal or factual
positions in litigation or other legal proceedings in which PHLX is not aparty.

Respondent may attach a Corrective Action Statement to this AWC that is astatement of demonstrable corrective steps taken to prevent future misconduct.
Respondent understands that it may not deny the charges or make any statementthat is inconsistent with the AWC in this Statement. This Statement does notconstitute factual or legal findings by PHLX, nor does it reflect the views ofPHLX or its staff.

5The undersigned, on behalf of the firm, certifies that a person duly authorized to act on its behalf
has read and understands all of the provisions of this AWC and has been given a full opportunity
to ask questions about it; that the firm has agreed to the AWC's provisions voluntarily; and that
no offer, threat, inducement, or promise of any kind, other than the terms set forth herein and theprospect of avoiding the issuance of a Complaint, has been made to induce the firm to submit it.

SG Americas Securities, LLC
Respondent

Date

By:
Name:

JEFFREY ROSEN—Managing-Director

Title:

Reviewed by:

Ie,ee'...v.'''.

Attorney NameCounsel for Respon ent
Firm NameAddress
City/State/Zip
Phone NumberL

Accepted by PHLX:/io/ 2.q
Dateack Macken
Senior Counsel
FINRA Department of Enforcement
Signed on behalf of PHLX, by delegatedauthority from the Director of ODA

6

PAYMENT INFORMATION
The fine amount will be reflected on an upcoming invoice and will be direct debited from theaccount for your firm that Nasdaq currently has on file. Please DO NOT submit payment at thistime.
Please inform your finance or applicable department of this forthcoming debit.
If you would like to arrange for an alternative method of payment, please enter the billing
contact information below and Nasdaq's Billing Department will contact you. Otherwise, pleaseleave the following information blank.
4-tot,17Billing Contact Name:
Billing Contact Address: 1
Billing Contact Email: )\e 1 We-u)

j_ . L 6 toBilling Contact Phone Number: 2 17-7g

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Respectfully submitted,

Respondent
SG Americas Securities, LLC

Date

By:Name:Title:STAR No. 20150483276 (IM)JEFFREY ROSENManaging Director