Notice of Disciplinary Action against G-2 Trading, LLC,
Member Organization, and David S. Abramson, Chief
Operating Officer of G-2 Trading, LLC
To:Members, Member Organizations, Participants and Participant Organizations

From:

John C. Pickford, Enforcement Counsel, NASDAQ OMX PHLXSM

DATE:December 20, 2013

Enforcement No. 2013-06
FINRA No. 20100242780
On December 20, 2013, the Business Conduct Committee (the “Committee”) issued adisciplinary decision against G-2 Trading, LLC (“G-2”), a member organization of the
Exchange, and David S. Abramson, G-2’s Chief Operating Officer. In response to a
Statement of Charges issued in this action, G-2 and Abramson submitted an Offer ofSettlement, Stipulation of Facts and Consent to Sanctions (“Offer”). Solely to settle thisproceeding, and without admitting or denying the charges, G-2 and Abramson consented
to findings that during the period between January 1, 2010 and December 31, 2010, they
had violated Section 15(a)(1) of the Securities Exchange Act of 1934, as amended (the“Exchange Act”), and Exchange Rules 603 and 707 by, among other things: (i) causing a
non-broker-dealer entity to operate as an unregistered broker-dealer by sharing with theentity remunerations derived from trading-related revenues at G-2’s Westport,Connecticut Branch Office (the “Westport Office”); (ii) sharing and jointly occupying theWestport Office with an entity that was not a member of the Exchange and that operated
a chat room without requesting or securing the requisite approval or waiver from theExchange to enter or maintain the joint occupancy; and (iii) failing to detect the presenceof several individuals in the Westport Office who were not employed by or otherwise
associated with G-2, or failing to detect and prevent such individuals from trading
securities for their personal accounts while physically present at the Westport Officewithout being registered with the Exchange.
Additionally, G-2 and Abramson consented to findings that they had violated Exchange
Rule 748(g) by failing to: (i) implement controls reasonably designed to prevent anddetect, and failing to supervise the Westport Office, its Branch Manager and the activitiesof traders in the Westport Office with a view toward preventing and detecting: (a) thepayment of transaction-based compensation to an unregistered broker-dealer; (b)violations of G-2’s written supervisory procedures (“WSPs”) prohibiting third-party fundingof trading accounts and participation by its associated persons in internet chat rooms; and(c) joint occupancy of the Westport Office with a non-member firm and unregisteredpersons; and (ii) establish, maintain and enforce WSPs, and a system of supervision, thatreasonably: (a) addressed the supervisory responsibilities of the Branch Manager of theWestport Office; (b) apprised the Branch Manager, and reviewed or oversaw theManager’s performance, of his supervisory responsibilities; and (c) provided for ongoingsupervision of the Westport Office during the Branch Manager’s absence.

The Committee found that G-2 and Abramson had violated Section 15(a)(1) of theExchange Act and Exchange Rules 603, 707 and 748(g), concurred in the sanctions
consented to by them, and ordered the imposition of the following sanctions: (i) acensure; (ii) a joint and several fine in the amount of $100,000; and (iii) a 20-day
supervisory suspension against Abramson.
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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