Notice of Disciplinary Action against Deutsche Bank Securities
Inc., Member Organization
To:Members, Member Organizations, Participants and Participant Organizations

From:

John C. Pickford, Enforcement Counsel, NASDAQ PHLX LLCSM

DATE:March 23, 2016

Enforcement No. 2016-02
FINRA No. 20120330918
On March 23, 2015, the Business Conduct Committee (the “Committee”) of the NASDAQPHLX LLC (“PHLX” or the “Exchange”) issued a disciplinary decision against Deutsche Bank
Securities Inc. (“DBAB” or the “Firm”), a member organization of the Exchange. In
response to a Statement of Charges issued in this action, DBAB submitted an Offer ofSettlement. Solely to settle this proceeding, and without admitting or denying the charge,
DBAB consented to findings that during the period between August 2009 through present(the “Review Period”), DBAB violated Exchange Rules 748 and 1003. Specifically, DBAB
consented to findings that the Firm had failed to report and had failed to correctly report
options positions to the Large Options Positions Report during the Review Period as
follows: (i) in as many as 943,545 instances, DBAB had failed to report options positions
to the LOPR; (ii) in as many as 1,751,183 instances, DBAB had over-reported options
positions to the LOPR; (iii) for an unknown amount of positions, DBDB had enteredincorrect data in the “Effective Date” field due to errors involving the Firm’s third-party
vendor’s processing of certain trades, which caused the positions to be unreported for one
day and misreported for each day thereafter the position was reportable; and (v) in tensof millions of instances, DBAB had misreported options positions to the LOPR as a result oferrors in various required LOPR data fields (e.g., City, Quantity, and Tax Identification
fields) when reporting those positions and its failure to report Acting In Concert identifiersin certain instances. Additionally, DBAB had failed to have an adequate system andprocedures for supervision related to compliance with options reporting.
The Committee found that DBAB had violated Exchange Rules 748 and 1003, and ordered
the imposition of the following sanctions against DBAB: (i) a censure; (ii) a fine in theamount of $4,000,000, of which $1,333,333 shall be paid to the Exchange; and (iii) anundertaking, pursuant to which at intervals of 90 and 180 days after the Offer ofSettlement becomes final, DBAB shall make a written submission to FINRA, on behalf ofthe Exchange, regarding the Firm’s options positions reporting to the LOPR. The written
submission shall address, at a minimum, the following: (i) an assessment of the degree towhich the Firm has taken steps to confirm that the data Respondent submits to the LOPR
system is accurate and that the Firm has reported all reportable positions to the LOPR
system; and (ii) the adequacy of the Firm’s policies, systems, procedures, and training
relating to achieving complete and accurate reporting to the LOPR system. The Firm will
pay the balance of the fine to FINRA and International Securities Exchange, LLC.

For more information, contact:
John C. Pickford, Assistant General Counsel, NASDAQ OMX PHLX, at +1 215 496 5273

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

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