Notice, Pursuant to Exchange By-law 18-2, of Disciplinary
Action Against RBC Professional Trader Group, LLC, Member
Organization
To:Members, Member Organizations, Participants and Participant Organizations

From:

John C. Pickford, Enforcement Counsel, NASDAQ OMX PHLXSM

DATE:April 28, 2010

NASDAQ OMX PHLX No. 10-13
Enforcement No. 2010-02
On April 26, 2010, the Business Conduct Committee (the “Committee”) issued adisciplinary decision against RBC Professional Trader Group, LLC (“RBC”), a member
organization of the Exchange. In response to a Statement of Charges issued in thisaction, RBC submitted an Offer of Settlement, Stipulation of Facts and Consent toSanctions (“Offer”). Solely to settle this proceeding, and without admitting or denying thecharges, RBC consented to findings that it violated, Sections 15 and 17 of the ExchangeAct, Rules 15b3-1, 15c3-1, 17a-3, 17a-4, and 17a-5 promulgated thereunder, andExchange Rules 605, 703, 748, 760, 761, 907, and 921: (i) failing to provide Exchange
staff a satisfactory expense sharing agreement between itself and RBC Capital Markets,LLC. (ii) failing (a) compute its amended net capital upon the withdrawal of “temporarycapital”; (b) properly reflect temporary capital as a liability in its financial filings; and (c)maintain an accurate schedule of capital deposits, capital withdrawal and profit payouts.
(iii) failing to amend its Form BD to accurately reflect the equity ownership of its greaterthan 5% equity owners. (iv) failing to submit copies of its advertising and promotional
material to the Exchange for approval prior to its publication. (v) failing to ensure thatseveral of its employees updated their ITSFEA (Insider Trading and Securities Fraud
Enforcement Act of 1988) forms within thirty business days of any change in theirbrokerage accounts. (vi) failing to have one of its officers registered as a member of theExchange. (vii) failing to be qualified by an Exchange permit holder. (viii) failing toestablish, maintain and enforce written supervisory procedures, and a system for applying
such procedures, reasonably expected to prevent and deter, insofar as practicable,
violations of applicable securities laws and regulations including the by-laws and rules of
the Exchange, by failing to: (a) incorporate the following into its written procedures: (1)an updated list of branch office locations, officers, compliance designees and assigned
branch office managers; (2) a statement regarding its policy on the acceptance andholding of securities in the section dealing with its Anti-Money Laundering Compliance
Program (“AMLCP”); (3) a reference to its net capital requirement pursuant to Exchange
Act Rule 15c3-1; (4) the fact that Forms U-4 and U-5 are filed through Web CRD rather
than the Exchange; (5) outline a cycle pursuant to which it would inspect each office orlocation; and (6) the following primary conditions or requirements of Regulation SHO
promulgated under the Exchange Act: (A) Respondent must have written organizational
plans identifying its defined trading units, specifying its trading objectives, and supporting
its independent identity; (B) all traders in an aggregation unit pursue only the tradingobjectives or strategy of that aggregation unit; and (C) individual traders are assigned toonly one aggregation unit at any time; (b) ensure that all traders and employees
completed its AMLCP by December 31, 2008; (c) conduct an annual compliance meetingwith all registered representatives, employees, or associated persons, and retain a written
record of the dates, participants and topics covered in the meeting; (d) review all
employees’ email accounts; (e) ensure that all trader files were complete, and all
documents were updated as required; (f) ensure that all traders and employees update
their certificate of compliance forms on an annual basis; and (g) ensure that all tradersand employees complete all required compliance forms at the commencement of theiremployment
The Committee found that RBC violated Sections 15 and 17 of the Exchange Act, Rules
15b3-1, 15c3-1, 17a-3, 17a-4, and 17a-5 promulgated thereunder, and Exchange Rules
605, 703, 748, 760, 761, 907, and 921, concurred in the sanctions consented to by it, andordered the imposition of the following sanctions: (i) a censure and (ii) a fine of $10,000.
For more information, contact:
John C. Pickford, Enforcement Counsel, NASDAQ OMX PHLX, at +1 215 496 5273

 Copyright 2009 The NASDAQ OMX Group, Inc. All Rights Reserved.

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