Notice of Disciplinary Action against PTR, Inc., a Member
Organization
To:Members, Member Organizations, Participants and Participant Organizations

From:John C. Pickford, Enforcement Counsel, NASDAQ OMX PHLXSMDATE:July 1, 2015

FINRA Matter Nos. 20130355444 et al.
Enforcement Nos. 2014-15 and 2015-05
On July 1, 2015, the Business Conduct Committee (the “Committee”) issued a disciplinary
decision against PTR, Inc. (“PTR” or the “Firm”), a member organization of the NASDAQOMX PHLX LLC (“PHLX” or the “Exchange”). In response to Statements of Charges issued inthis action, PTR submitted an Offer of Settlement, Stipulation of Facts and Consent toSanctions (“Offer”). Solely to settle these proceedings, and without admitting or denying
the charges, PTR consented to findings that during the period between January 2013 andDecember 2013 (the “Review Period”), PTR had committed violations of Exchange Rules
119, 120, 611, 612, 613, 640(a)(2), 707, 748(h), 760, 1014, 1024, 1025, and 1067.
Specifically, PTR consented to findings that during the Review Period, it had: (i) executed 12options transactions that traded through the Exchange’s Best Bid and Offer and one optionstransaction that traded ahead of a customer order on the Exchange’s Limit Order Book; (ii)failed to properly register: (a) an individual as a Proprietary Trader Principal with theExchange who maintained a similar registration with the Chicago Board Options Exchange,
Inc. (“CBOE”); (b) two individuals with NYSE MKT, LLC as General Securities
Representatives who maintained similar registrations with the Exchange; and (c) fourindividuals with the Exchange as Proprietary Traders who maintained similar registrations
with CBOE; (iii) permitted one of its officers to function as a Principal without properly
registering and qualifying him as a Principal, or otherwise obtaining a waiver of suchregistration or qualification from the Exchange; (iv) permitted a person who had failed tocomplete the Regulatory Element of its Continuing Education (“CE”) Program, and had
thereby become CE inactive, to continue to perform the duties of a registered person
without obtaining from the Exchange an extension of the timeframe for the CE inactive
person to complete the Regulatory Element of the Firm’s CE Program; (v) and failed toretain copies of customer options agreements and Special Statement for Uncovered Options
forms for several of its customers.
PTR also consented to findings that it had failed to: (i) secure, or could not provide evidence
that it had obtained, written customer agreements from eight non-BD customers to manage
their options accounts in accordance with applicable securities laws, including the rules of
the Exchange; and (ii) provide, or could not provide evidence that it had provided, a copyof the Special Statement for Uncovered Option Writers notice explaining the risks associatedwith writing uncovered short options to six non-BD customers that had requested to conduct
uncovered short options writing.

Finally, PTR consented to findings that it had committed various supervision-related
violations: namely, that: (i) its written supervisory procedures (“WSPs”) did not sufficiently
specify the nature of the annual review the Firm conducted of its business activities andthose of its employees and provide for the reviewing and monitoring of its trading andbusiness activities on a sufficiently frequent basis to ensure compliance with the Exchange’sorder handling rules; (ii) it had failed to enforce and supervise compliance with its WSPs,
which required: (a) the Firm to monitor for, and notify affected employees regarding,completion of the Regulatory Element of its CE Program, and (b) the registration ofprincipals, Representatives, and other employees; and (iii) it had failed to establish,
maintain and enforce WSPs to govern the maintenance of records related to its businesswith customers.
The Offer submitted by PTR was accepted by the Committee and was the basis of its
Decision. The Committee found that PTR had violated Exchange Rules 119, 120, 611, 612,613, 640(a)(2), 707, 748(h), 760, 1014, 1024, 1025, and 1067, and imposed the following
sanctions: (i) a censure; and (ii) a fine in the amount of $5,000.
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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