Notice of Disciplinary Action against Husky Trading LLC, aFormer Member Organization
To:Members, Member Organizations, Participants and Participant Organizations

From:John C. Pickford, Enforcement Counsel, NASDAQ OMX PHLXSMDATE:March 7, 2014

Enforcement No. 2012-14
FINRA No. 20100214122
On February 3, 2014, a Hearing Panel of the NASDAQ OMX PHLX LLC (“PHLX” or the“Exchange”) issued a Summary Disposition as a result of FINRA’s Department of Market
Regulation’s Motion for Entry of Default Decision (“Default Motion”) against Husky Trading
LLC (“Husky” or the “Firm”). The Default Motion was filed after Husky had failed to Answer
a Statement of Charges issued by the Exchange’s Business Conduct Committee or torequest an extension of the time to file an Answer. The Statement of Charges alleged,
among other things, that Husky had: (i) filed an inaccurate Financial and Operational
Combined Uniform Single Report with the Exchange, in willful violation of Section 17 of
the Securities Exchange Act of 1934, as amended (the “Exchange Act”), Rules 17a-3 and17a-5 promulgated thereunder, and in violation of Exchange Rules 703, 707, and 760; (ii)failed to file Uniform Termination Notice for Securities Industry Registration filings forthree associated persons and to register four other associated persons as Non-Registered
Fingerprint (“NRF”) persons in FINRA’s Central Registration Depository database, inviolation of Exchange Rules 604(b), 620(b), and 707; (iii) on 114 occasions effected
options transactions that improperly traded through the Philadelphia Best Bid or Offer
and/or the National Best Bid or Offer, and/or traded ahead of customer orders on theExchange’s Limit Order Book (the “Book”) or the quotations of other market participants
with priority, in violations of Exchange Rules 119, 120, 707, 1014, 1067, and 1084; (iv)failed to systematize 203 options orders in the Exchange’s Floor Broker Management
System (“FBMS”) prior to representing the orders in a trading crowd, in violation ofExchange Rules 707 and 1063(e)(i); (v) created an inaccurate audit trail by entering
inaccurate order volumes in FBMS for 25 options orders, in violation of Exchange Rules
707 and 1063(e)(i); and (vi) failed to supervise its order handling activities and toestablish, maintain and enforce reasonable written supervisory procedures (“WSPs”) todetect and prevent violations of the Exchanges order priority rules, in violation ofExchange Rules 707 and 748(g).
Previously, on October 24, 2013, after Market Regulation had properly served Husky with
the Default Motion and Husky had thereafter failed to respond to the motion or otherwise
participate in the proceeding, the Hearing Panel issued an Order, finding Husky in default
and to have waived its right to provide a defense at a hearing. However, in order to assist
the Hearing Panel in issuing a decision on the Default Motion, the Hearing Panel requested
that Market Regulation make a brief evidentiary presentation in support of a prima faciecase against Husky.

The Hearing Panel’s Summary Disposition, issued after Market Regulation had made therequested evidentiary presentation to the Hearing Panel on January 15, 2014, found thatHusky had admitted the allegations contained in the Statement of Charges in accordancewith Exchange Rule 960.4 and had thereby violated Section 17 of the Exchange Act, Rules
17a-3 and 17a-5 promulgated under the Exchange Act, and Exchange Rules 119, 120,604(b), 620(b), 703, 707, 748(g), 760, 1014, 1063(e)(i), 1067, and 1084, and imposed
sanctions of a censure and a $397,500 fine against the Firm. The fine was allocated asfollows:•••••$317,000, or $1,000 per violation, for 317 order handing violations (114 orderpriority violations and 203 systematization violations);$12,500, or $500 per violation, for 25 inaccurate audit trail violations;$10,000 for inaccurate books and records violations;$8,000 for the registration violations; and$50,000 for inaccurate WSPs and the failure to supervise violations.

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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