Notice of Disciplinary Action Against D&D Securities, Inc., aMember Organization, and Norman Jack Boyd, an Associated
Person of D&D Securities, Inc.
To:Members, Member Organizations, Participants and Participant Organizations

From:

John C. Pickford, Enforcement Counsel, NASDAQ OMX PHLXSM

DATE:

November 19, 2014

FINRA Matter Nos. 20100214169 et al
On November 14, 2014, the Business Conduct Committee (the “Committee”) issued adisciplinary decision against D&D Securities, Inc. (“D&D” or the “Firm”), a member
organization of the NASDAQ OMX PHLX LLC (“PHLX” or the “Exchange”), and Norman Jack
Boyd (“Boyd”), a floor broker with the Firm. In response to a Statement of Charges issued
in this action, D&D and Boyd submitted an Offer of Settlement, Stipulation of Facts andConsent to Sanctions (“Offer”). Solely to settle this proceeding, and without admitting ordenying the charges, D&D and Boyd consented to findings that during the period between
July 2009 and November 2012 (the “Review Period”), D&D had committed violations of
Exchange Rules 119, 120, 707, 748(g), 1014, 1051(a), 1063, Commentary .02, 1067, and1084, and Boyd had committed violations of Exchange Rules 707 and 1063, Commentary.02.
Specifically, D&D consented to findings that during the Review Period, it had: (i) executed
112 options transactions that traded through the Exchange’s Best Bid and Offer (“PBBO”)
and/or the National Best Bid and Offer (“NBBO”) markets, or traded ahead of customer
orders on the Exchange’s Limit Order Book (the “Book”) and/or ahead of Streaming Quote
Trader and/or Remote Stream Quote Trader quotations with established priority; (ii) while
acting through Boyd, misrepresented an options order as a customer order in a trading
crowd when, in fact, the order was for a broker-dealer; (iii) failed to report 10% or more of
its executed options transactions to the consolidated tape within 90 seconds of execution for
17 different months; and (iv) maintained written supervisory procedures (“WSPs”) thatwere deficient, in that its WSPs failed to: (a) specifically reference the Firm’s compliance with
the Exchange’s order priority rules or specify the nature of the review, and/or the monitoringof the Firm’s conduct for compliance with such rules; (b) provide for a review of the PBBO orNBBO at the relevant execution times; and (c) identify any procedures or tasks that weredesigned to prevent trade-through and order priority violations.
Additionally, Boyd consented to findings that during the Review Period, while acting on behalfof D&D and without ascertaining whether an options order entrusted to D&D for execution wasfor a customer or a broker-dealer, he mistakenly represented an order for the account of abroker-dealer to a trader crowd as a customer order.

The Offer submitted by D&D and Boyd was accepted by the Committee and was the basis ofits Decision. The Committee found that D&D had violated Exchange Rules 119, 120, 707,748(g), 1014, 1051(a), 1063, Commentary .02, 1067, and 1084, and Boyd had violated
Exchange Rules 707 and 1063, Commentary .02, and imposed the following sanctions: (i) acensure and a joint and several fine in the amount of $57,500 against D&D and Boyd; and(ii) an undertaking by D&D, within 60 days of the issuance of a Decision by the Committee,to: (a) correct the supervisory deficiencies identified in the Decision; (b) revise its WSPs toaddress such deficiencies; and (c) provide a signed, dated letter to FINRA’s MarketRegulation staff detailing the actions taken to remediate the supervisory deficiencies andenclosing a copy of the relevant excerpts of the revised WSPs.
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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