Notice, Pursuant to Exchange By-Law 18-2, of Disciplinary
Action Against Optiver US, LLC, Member Organization
To:Members, Member Organizations, Participants and Participant Organizations

From:

John C. Pickford, Enforcement Counsel, NASDAQ OMX PHLXSM

DATE:June 27, 2011

FINRA Matter No. 20100215749
Enforcement No. 2011-06
On June 9, 2011, the Business Conduct Committee (the “Committee”) issued a disciplinary
decision against Optiver US, LLC (“Optiver” or the “Firm”), a member organization of theExchange. In response to a Statement of Charges issued in this action, Optiver submitted
an Offer of Settlement, Stipulation of Facts and Consent to Sanctions (“Offer”). Solely tosettle this proceeding, and without admitting or denying the charges, Optiver consented tofindings that during the period between January 1, 2009 and October 31, 2009 (the“Relevant Period”), it had violated Sections 15 and 17 of the Securities Exchange Act of1934, as amended (“Exchange Act”), Rules 15b3-1, 17a-3, 17a-4(b)(7), and 17a-5
promulgated under the Exchange Act, and Section 14(a) of the Securities Investor
Protection Act of 1970 (“SIPA”), and Exchange Rules 703, 748(e)(1), 748(g), 760, and761 by, among other things: (i) failing to keep accurate books and records; (ii) filing aninaccurate Financial and Operational Combined Uniform Single Report with the Exchange;(iii) failing to preserve, or to provide evidence that it had preserved, written records toreflect its expense sharing agreement with several affiliated entities; (iv) failing to amend
its Uniform Application for Broker-Dealer Registration filing to disclose an indirect owner ofthe Firm; (v) not fully paying the first half of its annual assessment to the Securities
Investor Protection Corporation (“SIPC”), curing such partial nonpayment, or securing an
exemption from paying the partial assessment from the Securities and Exchange
Commission, while maintaining its SIPC membership and engaging in business as a
broker-dealer; (vi) not documenting or otherwise ensuring that one of its associatedpersons had attended the Firm’s 2009 annual compliance meeting; and (vii) not: (a)ensuring that 11 employees had completed and returned to the Firm their ITSFEA
Accounts Form within 10 days of the commencement of their employment with the Firm;(b) detecting that three employees had failed to disclose a total of five accounts on theirrespective ITSFEA Account Forms, even though Optiver had received and reviewed theaccount statements pertaining to those accounts; (c) securing and reviewing the accountstatements of two accounts that were included on its Master Review Sheet; and (d)detecting that four employees had failed to update their ITSFEA Account Forms to disclose
accounts that were held away from Optiver.
The Firm also consented, without admitting or denying the charges, to findings by theCommittee that Optiver had not adequately established, maintained and enforced written
supervisory procedures, and a system for applying such procedures, that resulted insupervisory deficiencies regarding: (i) under Regulation SHO, promulgated under theExchange Act, the strategies and objective of, and assignment of traders to, aggregation
units, and the manner in which the net position in individual securities is determinedwithin each aggregation unit of the Firm; (ii) the requirement under applicable Exchange
rules that the Firm receive and review the brokerage account statements and related
confirmations of its associated persons on a monthly rather than on a quarterly basis; (iii)the requirement that all electronic communications be retained in the “Write Once, ReadMany” format; (iv) the requirement that all requests for extensions to file financial
reports, such as FOCUS Reports, be made through the WebFOCUS financial applicationand the obligation to file FOCUS Reports within seventeen business days from the end of
the month in which the report is due; (v) the Firm’s obligation to conduct and file with theappropriate regulatory authorities an annual audit, to designate a independent public
accountant to conduct such audit, and to set forth policies regarding requests to extend
the deadline for filing its annual audit; (vi) the responsibilities of the Firm’s FinOp; (vii)the obligation to register non-registered fingerprint persons; (viii) the Firm’s procedures toverify whether its employees and associated persons maintained non-self-directed trading
accounts; (ix) the creation of information barriers between the Firm’s market making andproprietary trading activities; (x) the prohibition against the use by Firm personnel ofsquawk boxes, electronic mail, instant messages, video conferencing equipment and otherelectronic devices to eavesdrop on the trading and/or trading strategy of other brokerdealers, hedge funds, banking institutions, and investment advisors, and against the useof material, non-public information; (xi) the rules and regulations requiring that the Firm
maintain, and the Firm’s procedures for supervising the maintenance of, written
employment agreements setting forth its compensation arrangement with each of its
associated persons; and (xii) procedures concerning the receipt of third party checks.
Optiver’s Offer was accepted by the Committee and was the basis of its Decision. TheCommittee found that Tiberius had violated Sections 15 and 17 of the Exchange Act, Rules
15b3-1, 17a-3, 17a-4(b)(7), and 17a-5 promulgated under the Exchange Act, and Section
14(a) of SIPA, Exchange Rules 748(a), 748(e)(1), 748(g), 760, and 761, concurred in thesanctions consented to by it, and ordered the imposition of the following sanctions: (i) acensure; (ii) a $7,500 fine; and (iii) an undertaking, within 60 days of the issuance of aDecision by the Committee, to:(a) correct the deficiencies identified by FINRA’s Risk Oversight andOperational Regulation department (“ROOR”) during the 2009
examination;(b) cooperate with ROOR to develop and implement reasonable procedures,
not unacceptable to ROOR, to disclose the foreign-based brokerage
accounts, if any, of its associated persons, and to receive and review
on a periodic basis the account statements and confirmations pertaining
to any such accounts with a view toward identifying the possible misuseof material, nonpublic information;(c) revise its WSPs to address the deficiencies identified by ROOR; and(d) submit to William Bunting, FINRA Financial Regulation Department,
1900 Market Street, Second Floor, Philadelphia, PA 19103, a signed,
dated letter providing the following:(1) a reference to this matter;2(2) a representation that the Firm has revised its WSPs to address thedeficiencies identified by ROOR;(3) the date the revised WSPs were implemented; and(4) a Corrective Action Statement detailing what specific actions
Respondent has taken to correct and prevent future recurrence ofthe deficiencies identified by ROOR during its examination ofRespondent.
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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