SECURITIES AND EXCHANGE COMMISSION

Washington, D.C.

SECURITIES EXCHANGE ACT OF 1934

Release No. 99662 / March 4, 2024 

Admin. Proc. File No. 3-20362

In the Matter of the Application of

DEEP ATS, LLC

For Review of Action Taken by

FINRA

OPINION OF THE COMMISSION

REGISTERED SECURITIES ASSOCIATION – REVIEW OF DENIAL OF 

MEMBERSHIP APPLICATION

Registered securities association denied application for membership on the ground that 

firm failed to demonstrate that it meets association’s standards for membership. Held, 

application for review is dismissed.

APPEARANCES:

Deep ATS, LLC, pro se.

Alan Lawhead, Jante Turner, and Colleen E. Durbin for FINRA. 

Appeal filed: June 3, 2021 

Last brief received: November 2, 2021 
2

Deep ATS, LLC, appeals from a FINRA decision denying its new membership 

application. FINRA found that the firm did not adequately demonstrate that it satisfied FINRA 

Rule 1014(a)’s standards for membership. We find that FINRA properly denied the firm’s 

application and accordingly dismiss the application for review.

I. Background

A. FINRA by-laws and rules govern its membership application process.

FINRA evaluates applications for membership pursuant to Article III, Section 2 of its Bylaws. The By-laws authorize FINRA to set “financial responsibility and operational capability” 

standards for membership; to consider the “nature, extent, and type” of the applicant’s proposed 

securities business; and to apply those standards as “necessary or desirable” in its discretion. 

Under FINRA Rule 1014(a), FINRA’s Department of Member Supervision (“Member 

Supervision”) evaluates new member applications based on fourteen membership standards and 

in light of “the public interest and the protection of investors.”1 A new member application 

includes not only the application form but also, among other things, a detailed business plan; a 

list of all associated persons; copies of final or proposed contracts with banks; a description of 

the supervisors and principals’ experience and qualifications; any additional information and 

documents requested by Member Supervision; and a required interview.2 The applicant firm 

bears the burden of demonstrating that it satisfies each of the fourteen membership standards and 

that its membership is in the public interest.3 

B. Deep ATS filed its initial new member application.

Deep ATS filed its initial new membership application with Member Supervision on 

November 5, 2019. Deep ATS proposed to engage in four lines of business: (1) developing and 

operating an alternative trading system (“ATS”); (2) selling private placement securities to 

accredited investors; (3) engaging in proprietary trading; and (4) acting as an underwriter or 

selling group participant, which Deep ATS identified as “investment banking activities.” The 

firm stated that it would not hold customer funds or securities.

The initial application further stated that Deep ATS was wholly owned by Spot Quote 

Holdings, Inc. (“Spot Quote”), a Delaware corporation of which Sam Balabon was the majority 

owner. In its application, Deep ATS proposed that Balabon would serve as its chief executive 

officer (“CEO”), chief compliance officer (“CCO”), anti-money laundering compliance officer, 

and general securities principal responsible for the supervision of the firm’s ATS and proprietary 

trading activities. Deep ATS further proposed to register Ramesh Puranik as its financial and 

1 Member Supervision may approve, deny, or grant membership subject to business 

restrictions. FINRA Rule 1014(b).

2 FINRA Rule 1013(a)(1), (4), (b)(1), (5), (7).

3 Asensio & Co., Inc., Exchange Act Release No. 68505, 2012 WL 6642666, at * 4 (Dec. 

20, 2012).
3

operations principal (“FINOP”) and second general securities principal responsible for 

supervising the private placement and investment banking activities. 

The firm stated that it did not intend to retain any additional registered representatives 

and proposed to operate one office, located on property owned by Balabon, during the first 12 

months of operation. The firm also indicated that its parent company, Spot Quote, and another 

firm identified as Intelligent Resources, Inc., would initially pay Deep ATS’s expenses.

On November 11, 2019, Membership Supervision informed Deep ATS that it found the 

initial application “to be substantially incomplete.” Among other things, Member Supervision 

requested that Deep ATS provide additional information about Spot Quote; bank account 

information for Deep ATS and Spot Quote; Deep ATS’s procedures for its proposed private 

placement business; and whether the firm’s ATS was “demo-ready.” In response, Deep ATS 

filed a revised membership application. 

C. Member Supervision reviewed Deep ATS’s revised new member application.

After accepting Deep ATS’s revised application as substantially complete, Member 

Supervision made several additional requests for information.4 

1. Member Supervision made an initial information request.

On January 6, 2020, Member Supervision requested that Deep ATS submit an updated 

application clarifying the firm’s written supervisory procedures and answering questions about, 

among other things, Deep ATS’s ownership and control, the firm’s proposed business activities, 

and whether the firm would engage in activities that required Series 79 registration. Member 

Supervision also requested copies of documents such as a clearing agreement or letter of intent, a 

fidelity bond, and the name of the firm’s electronic storage/email archiving vendor and its 

contract with the vendor. 

The firm responded that it planned to engage in private placement and investment 

banking activities that required a Series 79 registration (investment banking representative) and 

that Puranik would be taking the Series 79 examination. Deep ATS also stated that Balabon 

would “conduct and supervise the [firm’s] proprietary trading activity” and that the firm did not 

think that he needed to pass any additional exams. And the firm represented that it was 

“propos[ing] to enter into” a clearing arrangement, “making arrangements” for a fidelity bond, 

and “plan[ning] to subscribe” to a vendor “to store electronic data and email archiving.”

4 FINRA may serve requests for any additional information or documents necessary to 

render a decision on an applicant’s new member application, and applicants must provide the 

requested information within 60 days of an initial request and 30 days of a subsequent request. 

FINRA Rule 1013(a)(4). A new member application “shall lapse” if the applicant does not 

timely “respond fully” to a request by FINRA for more information or documents. FINRA Rule 

1012(b)(1)(A).
4

2. Member Supervision made a second information request.

On April 1, 2020, after a telephone conversation with Puranik, Member Supervision 

emailed him for clarification and additional information. Among other requests, Member 

Supervision asked what licenses allowed Balabon to “conduct and supervise the proposed

proprietary trading/market making activities” and “why the Series 57 is not needed.” Member 

Supervision also asked for a description of “the overall business of Intelligent Resources and any 

planned interaction between Intelligent Resources and Deep ATS, both operationally and 

financially,” and of any payments that Spot Quote and Intelligent Resources made on Deep 

ATS’s behalf. Member Supervision also requested that Deep ATS provide Puranik’s resume and 

“a detailed narrative description of [his] specific experience with investment banking and 

underwriting, including structuring and pricing deals.”

Deep ATS wrote in response that it “fe[lt] series 52 [sic] is not needed now” because 

“[t]rading/market making activity would be for the firm’s own account and shall not be carried 

out for customers or third parties.” The firm also wrote that Spot Quote and Intelligent 

Resources would pay Deep ATS’s expenses because Deep ATS “is a start up and will have no 

income until it starts business operations.” Deep ATS further provided that, through Intelligent 

Resources, Balabon “carried out several business operations” and used the company “to meet 

several running expenses” such as “the remuneration of Ramesh Puranik,” “Auditor’s fee,” and 

“office expenses.” Deep ATS included Puranik’s resume and explained that he had “worked in a 

bank for 12 years and has experience in Investment Banking and Venture Capital” and would be 

taking the Series 79 exam shortly.5 The firm also included updated WSPs that identified Puranik 

as the proposed CCO, replacing Balabon. 

3. Member Supervision made a third information request.

On June 3, 2020, Member Supervision emailed Puranik for an update on Deep ATS’s 

“efforts to partner with an investor in connection with the development of the proposed ATS.” It 

also sought information about the adequacy of Puranik’s experience to serve as the firm’s CCO 

and for a “detailed description” of his “experience specific to investment banking and 

underwriting, including structuring and pricing deals” and “his specific responsibilities related to 

compliance.” Member Supervision added that, under FINRA registration guidance, the Series 57 

is required for proprietary trading of equities, as well as certain types of debt, and asked the firm 

to clarify what products Deep ATS intended to trade for its own account and why Balabon did 

not need a Series 57 to conduct such trading. In addition, Member Supervision advised Deep 

ATS that the firm needed to provide copies of contracts or agreements evidencing that it had 

secured a fidelity bond, a third-party provider of electronic storage, and an auditor.

In a written submission dated July 3, 2020, Deep ATS represented that it would attempt 

to obtain financing once its membership application was approved. Deep ATS further responded 

that Puranik had “worked in a bank in India for 12 years in a managerial capacity,” where he was 

involved with due diligence and preparation of prospectuses for companies engaged in public or 

5 Puranik took the Series 79 examination in November 2019 and July 2020 and failed each 

time.
5

private placement of securities, and in pricing private placements. The firm also represented that 

Puranik served as a principal and FINOP of a prior FINRA broker-dealer that Balabon had 

owned.6 Deep ATS explained that, while that broker-dealer lacked an investment banking 

business, its parent company “had some private placements and Mr. Puranik has taken care of 

the procedures to [sic] in the issue of securities and subsequent reporting to state agencies.” 

Deep ATS also represented that Puranik had handled other compliance requirements such as 

computing net capital, filing FOCUS reports with FINRA, and working with FINRA during 

inspections. 

The firm stated that Balabon was not required to obtain the Series 57 license because 

“[p]roprietary trading is defined as investment by a firm for direct market gain rather than 

earning commissions by trading on behalf of its clients” and “Deep ATS does not propose to 

indulge in proprietary trading by investing [its] own funds.” As to the request that it secure the 

necessary contracts and agreements, Deep ATS responded that it had “identified” service 

providers and “obtained letters on [sic] intent,” but that “actual contracts would be signed” after 

FINRA approved its application.

4. Member Supervision made a fourth information request.

On July 17, 2020, Member Supervision sent Deep ATS a final information request, 

asking the firm to elaborate on Puranik’s compliance experience and describe what Puranik’s 

day-to-day responsibilities would be at Deep ATS. In response, Deep ATS provided the 

following description: 

Mr. Puranik has worked for Intelligent Resources for [sic] since 1999. He has attended to 

administrative duties including compliance with Finra and state security agencies since 

2006. He served as a series 24 principal and series 27 FinOp for a Finra BD from 2006 to 

2019 that was owned by Spot Quote. 

In describing Puranik’s proposed compliance responsibilities as Deep ATS’s CCO, the firm 

explained that he may not have “specific day to day responsibilities” because initially “the 

proposed firm may not have customers and trading business.” The firm also stated, without 

elaboration, that Puranik “will be responsible for any compliance and administrative tasks related 

to keeping the BD in good standing with Finra and SEC” and “will also continue as FinOp of the 

firm.”

6 Balabon’s prior FINRA broker-dealer was also named Deep ATS from August 2005 until 

early September 2015 and then renamed Spot Quote LLC. Spot Quote LLC became OKCoin 

Securities in August 2019 when it was sold to a third party.
6

D. Member Supervision conducted the membership interview of Deep ATS.

On June 23, 2020, Member Supervision emailed Deep ATS, requesting that, during the 

required membership interview,7 Deep ATS provide a demonstration of its ATS platform. But 

during the subsequent interview, Deep ATS did not demonstrate an operational ATS platform. 

The firm instead presented schematics and screenshots. During the interview, Deep ATS also 

expressed an interest in securing a large partner such as a global bank to take over the project. 

And on the same day as the interview, Balabon emailed Member Supervision staff that he would 

be willing to “hand over all the patents to FINRA and all technology already built to FINRA for 

a 3% royalty of sales . . . .”

E. Member Supervision discovered information that Deep ATS failed to disclose.

Member Supervision conducted an independent due diligence review of Deep ATS, 

Balabon, and Puranik to determine, among other things, whether the firm had disclosed all 

outside business activities.8 During this review, Member Supervision discovered that the firm 

had not disclosed that Balabon was CEO of Moentum Token (“Moentum”), a crypto asset 

company that operated from the same address as Deep ATS. Member Supervision also 

discovered that Balabon had not disclosed this outside business activity on his Uniform 

Application for Securities Industry Registration of Transfer (“Form U4”), despite having 

otherwise updated his Form U4 in December 2018 while associated with his previous firm.9

F. Member Supervision denied Deep ATS’s new member application and Deep ATS 

appealed to the NAC.

On September 21, 2020, Member Supervision denied Deep ATS’s new member 

application for failing to comply with the standards in FINRA Rule 1014. Deep ATS appealed 

the decision to FINRA’s National Adjudicatory Council (“NAC”). 

After holding an evidentiary hearing, the NAC affirmed the denial of Deep ATS’s new 

member application. The NAC found that the firm failed to meet the admission criteria in 

FINRA Rule 1014 because (1) the application was not “complete and accurate” given the firm’s 

statements proposing to sell the main business line described in the application and failure to 

disclose that Deep ATS’s CEO also served as the CEO of another company that operated from 

the same address as Deep ATS; (2) Deep ATS’s proposed supervisors lacked the required 

licenses to supervise the proposed broker-dealer; (3) Deep ATS lacked the required contracts and 

7 FINRA Rule 1013(b)(1) provides that, before Member Supervision issues its decision on 

a new membership application, it “shall conduct a membership interview with a representative or 

representatives of the Applicant.” 

8 As part of a new member application, an applicant is required to disclose “any business 

activities that the [Applicant’s] supervisors or principals may engage in outside of their 

association with the Applicant.” FINRA Rule 1013(a)(1)(O).

9 Form U4, Section 13 “Other Business” (requiring identifying information and details 

about any other business that individual is engaged in “as a proprietor, partner, officer, director, 

employee, trustee, agent or otherwise”).
7

agreements to operate as a broker-dealer; (4) one of Deep ATS’s proposed supervisors lacked 

adequate experience; and (5) FINRA had evidence that Deep ATS may circumvent or evade 

federal securities laws or FINRA rules from Deep ATS’s and Balabon’s failure to disclose 

Balabon’s involvement with Moentum. In reaching this conclusion, the NAC also rejected Deep 

ATS’s procedural arguments, including claims about the timeliness of Member Supervision’s 

decision.10 This appeal followed.

II. Analysis

Section 19(f) of the Securities Exchange Act of 1934 governs our review of FINRA’s 

denial of an application for membership.11 “FINRA has discretion in applying and interpreting 

its membership rules,” and an “applicant firm bears the burden of demonstrating that it satisfies 

the membership standards and that its membership is in the public interest.”12 We must dismiss 

Deep ATS’s appeal of FINRA’s membership denial if we find that (i) the specific grounds on 

which FINRA based its denial exist in fact; (ii) the denial was in accordance with FINRA’s rules; 

and (iii) FINRA’s rules are, and were applied in a manner, consistent with the purposes of the 

Exchange Act.13 FINRA’s decision satisfies these criteria.14

A. The specific grounds for FINRA’s denial of Deep ATS’s new member application 

exist in fact.

FINRA’s findings regarding Deep ATS’s new member application, the licenses held by 

Balabon and Puranik, Deep ATS’s contractual arrangements, and Puranik’s experience, 

discussed above, exist in fact. Deep ATS does not contest these facts, and they are established 

by the firm’s application materials, interview, and publicly available information. 

10 Because the FINRA Board did not call the NAC’s decision for review, the NAC decision 

became FINRA’s final decision. See FINRA Rule 1015(j)(3).

11 See Bering Strait Secs., Inc., Exchange Act Release No. 76307, 2015 WL 6575667, at *4 

(Oct. 29, 2015) (citing 15 U.S.C. § 78s(f)).

12 Id. (citing Exchange Servs., Inc., Exchange Act Release No. 22245, 1985 WL 548404, at 

*3 & n.11 (July 10, 1985) (explaining that the Commission “will not substitute our judgment for

that of the” SRO in reviewing a decision under § 19(f)), aff’d, 797 F.2d 188 (4th Cir. 1986)).

13 15 U.S.C. § 78s(f). 

14 Exchange Act Section 19(f) also requires us to set aside FINRA’s action if we find that 

the action imposes an undue burden on competition. Id. Deep ATS does not claim, nor does the 

record support a finding, that FINRA’s denial imposes such a burden.
8

B. The denial of Deep ATS’s new member application was in accordance with 

FINRA’s rules.

1. Deep ATS did not establish that its new member application was complete 

and accurate.

FINRA Rule 1014(a)(1) requires that a new member “application and supporting 

documents [be] complete and accurate.” In the various iterations of its new member application, 

Deep ATS indicated that it intended to develop and operate an ATS, along with three other lines 

of business. But in its membership interview, Deep ATS expressed an interest in selling its ATS 

business to a global bank and in subsequent correspondence Balabon offered to give FINRA the 

firm’s patents and technology for the ATS business in exchange for “a 3% royalty.” We agree 

with FINRA that these varying statements about its intentions with respect to its ATS business 

call into question the extent to which the firm intends to conduct one of the primary businesses 

for which it is seeking membership, rendering the firm’s application incomplete and inaccurate 

under FINRA Rule 1014(a)(1).

In its reply brief, Deep ATS argues that Balabon, “as a businessman, may utilize any 

lawful opportunity for gains . . . [and] if FINRA is interested in the technology he might pass it 

on for a royalty.” But the question is not whether Balabon may sell the firm’s ATS. The 

question is whether Deep ATS demonstrated that its new member application was “complete and 

accurate.” And based on the firm’s expressed interest in selling one of the main business lines 

described in Deep ATS’s application, FINRA was justified in concluding that the firm’s 

application was not complete and accurate.

We also agree with FINRA that Deep ATS’s failure to disclose Moentum as one of 

Balabon’s outside business activities made the application incomplete and inaccurate.15 Rule 

1013(a)(1)(O) requires an application to disclose all outside business activities of an applicant’s 

supervisors and principals. Deep ATS does not dispute that its application failed to disclose 

Moentum as one of Balabon’s outside business activities. Instead, the firm suggests that 

Balabon’s failure to disclose Moentum on his Form U4 could not “breach” FINRA’s rule on 

outside business activities—Rule 3270—because “the firm never had any clients and thus it 

would have been impossible for Rule 3270 to have any effect in protecting the general public.” 

But FINRA did not deny Deep ATS’s new membership application based on Balabon’s violating 

Rule 3270. FINRA denied the application as incomplete and inaccurate under Rule 1014(a)(1), 

based on Deep ATS’s failure to disclose all of its supervisors’ and principals’ outside business 

activities as required by Rule 1013(a)(1)(O). Although the NAC cited Rule 3270 in its decision, 

15 See FINRA Rule 1013(a)(1)(O) (requiring Applicant to disclose its supervisors and 

principals’ “business activities . . . outside of their association with the Applicant”); cf. FINRA

Form NMA, Standard 1: Overview of the Applicant, Additional Information Regarding 

Applicant, Request 4 (requiring the applicant to “[i]dentify by name all entities (including other 

broker-dealers and investment advisory firms) under common control with the Applicant, 

describe the nature of each such entity’s business, and identify each entity’s relationship to the 

Applicant”).
9

it did so only by analogy, to support the proposition that FINRA’s disclosure rules apply to all 

outside business activities. 

In an apparent effort to argue that Balabon had effectively disclosed his involvement with 

Moentum to the Commission (and thus did not need to include the activity on Deep ATS’s new 

member application), Deep ATS also claims that Balabon informed the Commission about 

Moentum’s activities and had a phone call regarding crypto assets with “two SEC attorneys . . . 

[and] no action was taken by the SEC.” But any conversation that Balabon may have had about 

Moentum with Commission staff are not relevant to Deep ATS’s new member application filed 

with FINRA. And Deep ATS’s failure to disclose Balabon’s outside business interests with 

Moentum in its new membership application rendered that application incomplete and 

inaccurate.

Deep ATS also provided insufficient answers to Member Supervision about the firm’s 

relationship with Intelligent Resources. Namely, in responding to requests from Member 

Supervision about that company, Deep ATS answered only that Intelligent Resources was a 

company through which Balabon “had carried out several business operations” and used “to 

meet several running expenses” such as “the remuneration of Ramesh Puranik,” “Auditor’s fee,” 

and “office expenses.” As FINRA found, and Deep ATS does not dispute, such Deep ATS’s 

answers about Intelligent Resources were so unspecific as to be non-responsive and therefore 

rendered Deep ATS’s application not complete and accurate under Rule 1014(a)(1). 

2. Deep ATS did not establish that it had the required licenses to supervise its 

proposed lines of business.

FINRA Rule 1014(a)(2) requires an applicant firm to demonstrate that it and “its 

Associated Persons have all licenses and registrations required by state and federal authorities 

and self-regulatory organizations.” FINRA found, and we agree, that Deep ATS failed to show 

that its associated persons had the necessary licenses and registrations. Deep ATS identified four 

proposed lines of business in its new member application, including proprietary trading and 

investment banking. Those lines of business required Series 57 and 79 registrations, 

respectively.16 But neither Balabon nor Puranik obtained those registrations.

16 FINRA rules generally require an applicant for FINRA membership to have at least two 

registered principals who, in turn, must possess specific qualifications depending on the 

applicant’s proposed business lines. FINRA Rule 1210.01. A firm that proposes to engage in 

investment banking must have an associated person who is a registered Investment Banking 

Principal, which requires, among other things, that the person have passed the Series 79 exam. 

FINRA Rule 1220(a)(5). And a firm that proposes to engage in proprietary trading must have an 

associated person who is a registered Securities Trader Principal, which requires, among other 

things, passing the Series 57 exam. FINRA Rule 1220(a)(4), (7); see also Series 24 – General 

Securities Principal Exam, FINRA, available at https://www.finra.org/registration-examsce/qualification-exams/series24 (defining corequisite exams to the Series 24 exam to obtain 

specific registrations). 
10

Deep ATS argues that it does not need those registrations, because it will not be trading 

for customers or itself, and therefore Balabon’s Series 24 license is sufficient without a Series 57 

registration to supervise the market-making activities of the firm. But Deep ATS identified 

proprietary trading as one of its proposed business lines, and FINRA Rule 1220 requires that 

each principal supervising proprietary trading pass the General Securities Principal qualification 

examination and register as both a Securities Trader and a Securities Trader Principal.17 

Although Balabon passed the General Securities Principal qualification examination, FINRA 

Rule 1220 required him also to pass the Securities Industry Essentials and the Series 57 

examinations to become a Securities Trader Principal able to supervise proprietary trading.18 

And, as the firm acknowledges, Balabon has not done so. 

Deep ATS further admits that Puranik failed to pass the Series 79 examination, which is 

required for its planned investment banking line of business. The firm argues that FINRA 

nevertheless “could have approved the BD without investment banking activity instead of 

denying the entire BD application.” But where an application does not satisfy all the standards 

for FINRA membership, as is the case here, FINRA’s rules entitle it to decide whether to grant 

the application subject to restrictions or deny the application outright.19 And given the extensive 

shortcomings in Deep ATS’s application describe herein, denial of the application was 

reasonable. 

3. Deep ATS did not establish that it had the contracts and agreements 

necessary to operate as a broker-dealer.

FINRA Rule 1014(a)(4) requires an applicant firm to demonstrate that it has established 

all contractual arrangements and business relationships necessary to initiate its planned business 

operations and comply with the federal securities laws, regulations, and rules.20 We agree with 

17 FINRA Rule 1220(a)(7)(A) (“Each principal . . . who is responsible for supervising the 

securities trading activities specified in paragraph (b)(4) of this Rule shall be required to register 

with FINRA as a Securities Trader Principal.”); FINRA Rule 1220(a)(7)(B) (“Each person 

seeking to register as a Securities Trader Principal shall, prior to or concurrent with such 

registration, become registered pursuant to paragraph (b)(4) of this Rule as a Securities Trader 

and pass the General Securities Principal qualification examination.”); FINRA Rule 

1220(b)(4)(A) (“Each representative . . . shall be required to register with FINRA as a Securities 

Trader if . . . such person is engaged in proprietary trading . . . or the direct supervision of such 

activities . . . .”); FINRA Rule 1220(b)(4)(B) (“[I]ndividuals registering as Securities Traders . . . 

shall, prior to or concurrent with such registration, pass the SIE and the Securities Trader 

qualification examination.”).

18 See Series 24 – General Securities Principal Exam, FINRA, available at

https://www.finra.org/registration-exams-ce/qualification-exams/series24 (defining corequisite 

exams to obtain specific registrations).

19 See FINRA Rule 1014(b)(3).

20 FINRA Rule 1014(a)(4) (“The Applicant has established all contractual or other 

arrangements and business relationships with banks, clearing corporations, service bureaus, or 

others necessary to . . . initiate the operations described in the Applicant’s business plan . . . and 
11

FINRA that Deep ATS did not demonstrate that it satisfied this standard here because it failed to 

(1) obtain a fidelity bond as required by FINRA Rule 4360; (2) secure an audit engagement letter 

as required by Exchange Act Rule 17a-5(f)(2);21 and (3) arrange for storage of its electronic 

records to comply with Exchange Act Rule 17a-4(b).22

Deep ATS claims, without further support or evidence, that it had “letters of in principle 

agreement/intent” and argues that signing “working contracts . . . is only possible after obtaining 

the BD license.” Deep ATS’s unsupported statements are insufficient to satisfy the requirement 

that the firm have “established all [necessary] contractual or other arrangements and business 

relationships” in order to become a FINRA member.23 Because Deep ATS lacked multiple 

critical contractual agreements and failed to submit even letters of intent or agreements in 

principle in lieu of such agreements, we agree with FINRA that Deep ATS did not meet its 

burden of showing in its application that it had established the contractual arrangements 

necessary for it to operate its planned businesses or fully comply with the federal securities laws. 

4. Deep ATS did not establish the adequacy of its supervisory system.

FINRA Rule 1014(a)(10) requires the applicant firm to establish that it has a supervisory 

system adequately designed to prevent and detect violations of the federal securities laws and 

related rules and regulations.24 The applicant firm must establish the adequacy of the 

supervisory system based on, among other things, the nature of the proposed business, and the 

experience and qualifications of its supervisory personnel.25 At a minimum, the applicant firm 

must establish that each supervisor “has at least one year of direct experience or two years of 

related experience in the subject area to be supervised.”26

comply with the federal securities laws, the rules and regulations thereunder, and FINRA 

rules.”).

21 17 C.F.R. § 240.17a-5(f)(2).

22 17 C.F.R. § 240.17a-4(b).

23 FINRA Rule 1014(a)(4). Member Supervision indicated that there had been past 

instances of a firm submitting an auditing engagement letter “shortly after” a membership 

approval, but “never for a fidelity bond or the electronic storage media.” To the contrary, staff 

from Member Supervision testified, a fidelity bond and an arrangement for electronic records 

“are absolutely required prior to FINRA granting an approval.”

24 FINRA Rule 1014(a)(10) (“The Applicant has a supervisory system, including written 

supervisory procedures, internal operating procedures (including operational and internal 

controls), and compliance procedures designed to prevent and detect, to the extent practicable, 

violations of the federal securities laws, the rules and regulations thereunder, and FINRA 

rules.”).

25 See id.; see also Bering Strait Secs., Inc., 2015 WL 6575667, at *8 (explaining that the 

adequacy of the system also depends on any other factors that “will have a material impact on 

the [firm’s] ability to detect and prevent violations”).

26 FINRA Rule 1014(a)(10)(D).
12

FINRA concluded that the Deep ATS did not establish the adequacy of its supervisory 

system because the firm had not demonstrated that Puranik had the experience or qualifications 

to enable him to supervise its investment banking business. We agree. Although Balabon 

previously owned another broker-dealer at which he and Puranik were principals, Deep ATS did 

not adequately explain how Puranik’s experience at the former broker-dealer qualified him to 

supervise the firm’s investment banking business or serve as its CCO. 

For example, FINRA asked Deep ATS for “a detailed description of Mr. Puranik’s 

experience specific to investment banking and underwriting,” including “his specific 

responsibilities related to structuring and pricing deals.” But Deep ATS responded with only 

generalities that Puranik (1) was “involved in the due diligence and preparation of prospectus 

[sic] for companies doing public or private placement of securities”; (2) was “involved in pricing 

of private placements seeking additional finance by the invested companies”; and (3) “had taken 

care of the procedures to in [sic] the issue of securities and subsequent reporting to state 

agencies” for private placements by the former broker-dealer’s parent company. In doing so, 

Deep ATS provided no specifics about Puranik’s responsibilities at his former broker-dealer. 

And despite its obligation to demonstrate the adequacy of its supervisory system, including its 

supervisors’ qualifications, Deep ATS also failed to explain how Puranik’s experience at the 

prior broker-dealer qualified him to act as the supervisor for Deep ATS’s investment banking 

business. Moreover, Puranik failed to pass the Series 79 exam needed to serve as the firm’s 

investment banking principal—further undermining Deep ATS’s claim that he has the 

qualifications and experience to supervise the firm’s investment banking activities.

Deep ATS also failed to demonstrate that Puranik has the experience or qualifications 

necessary to serve as Deep ATS’s CCO. FINRA asked Deep ATS to “provide a detailed 

description of [Puranik’s] specific responsibilities [at his prior firm] related to compliance.” In 

response, Deep ATS stated only that, when Puranik’s former firm “had trading activity, 

computing the net capital after haircuts on positions and filing the FOCUS with Finra was being 

done by Mr.Puranik” and that “[f]acilitating with Finra during annual inspections and subsequent 

correspondences was attended to by Mr.Puranik.” Deep ATS never explained what Puranik’s 

compliance experience entailed or how that experience qualifies him to operate as the CCO of 

Deep ATS. Moreover, as FINRA found and Deep ATS does not dispute, “Puranik’s previous 

broker-dealer was ‘inactive the entire time’ – such that Puranik would not have performed the 

duties of either role.” 

We accordingly agree with FINRA that the insufficient and incomplete information Deep 

ATS provided in its application about its proposed CCO’s prior experience—much of which 

Puranik gained at an inactive firm—does not demonstrate that the firm had an adequate 

supervisory system as required by FINRA Rule 1014(a)(10).

5. Evidence suggested that Deep ATS may circumvent or evade federal 

securities laws or FINRA rules.

FINRA Rule 1014(a)(13) prohibits approval of an applicant firm’s new member 

application if there is “any information indicating that the Applicant may circumvent, evade, or 

otherwise avoid compliance with the federal securities laws, the rules and regulations thereunder, 

or FINRA rules.” Here, FINRA found that numerous failures by Deep ATS and Balabon, its 
13

CEO, indicated that it might circumvent or evade the federal securities laws or FINRA rules, 

including: the firm’s failure to identify Moentum in its new member application; Balabon’s 

failure to disclose his affiliation with Moentum in his Form U4, including when he updated it in

December 2018;27 and the firm’s incomplete answers about Intelligent Resources’ operations and 

its relationship to the firm. We agree with FINRA’s assessment. 

Deep ATS’s failure to fully disclose outside business activities, combined with its 

proposed CEO’s failure to comply with his disclosure requirements, raises significant questions 

about whether the firm will comply with the obligations required of a FINRA member firm.28 

For example, Form U4 conveys critical information to the investing public about registered 

representatives of broker-dealers, and FINRA relies on full and accurate self-reporting on the 

form to effectively “determine who may enter (and remain in) the industry.”29 Balabon’s failure 

to comply with this disclosure obligation in his Form U4, along with Deep ATS’s failure to 

disclose outside business activities in its new membership application, raises concerns about 

their commitment to the firm’s complying with securities laws and regulations and, as a result, 

FINRA’s ability to monitor Deep ATS as a FINRA member. 

Deep ATS argues that a proper disclosure on Balabon’s Form U4 would not have had any 

effect in protecting the public, because Moentum never had any clients. And, as noted above,

Balabon claims to have discussed Moentum with Commission staff. But whether Balabon’s 

failure to disclose information caused investor harm, or whether he allegedly disclosed that 

information to Commission staff, does not change the importance to FINRA’s regulatory regime 

of complete and accurate disclosure on his Form U4. Nor were Balabon’s disclosure failures 

isolated, as Deep ATS also failed to identify Moentum in its membership application and gave 

incomplete responses about Intelligent Resources’ business operations—all of which, taken 

together, adequately support FINRA’s conclusion that the firm might circumvent or evade 

federal securities laws or FINRA rules. 

D. FINRA rules are, and were applied in a manner, consistent with the Exchange Act.

FINRA acted consistently with the Exchange Act when it denied Deep ATS’s new 

member application. FINRA reasonably exercised its authority under Exchange Act Section 

27 See supra note 9 and accompanying text.

28 Cf. Blair C. Mielke, Exchange Act Release No. 75981, 2015 WL 5608531, at *17 (Sept. 

24, 2015) (observing that associated persons “may not decide which specific FINRA information 

requests they will fulfill” and that their failure to disclose outside business interests was 

“inconsistent with just and equitable principles of trade and reflect[ed] poorly on their ability to 

comply with regulatory requirements”); Robert D. Tucker, Exchange Act Release No. 68210, 

2012 WL 5462896, at *8 (Nov. 9, 2012) (recognizing that “[u]ntruthful answers [on a Form U4] 

call into question an associated person’s ability to comply with regulatory requirements”).

29 Tucker, 2012 WL 5462896, at *8; see also Robert E. Kauffman, Exchange Act Release 

No. 33219, 1993 WL 483323, at *1 (Nov. 18, 1993) (explaining that FINRA “cannot investigate 

the veracity of every detail in each document filed with it” and “must depend on its members to 

report to it accurately and clearly in a manner that is not misleading”).
14

15A(g)(3)(A) to “examine and verify the qualifications of an applicant” based on FINRA 

standards of “training, experience, and competence” and “financial responsibility and operational 

capacity.”30

“The application process is designed to ‘fully evaluate relevant aspects of applicants and 

to identify potential weaknesses in their internal systems’ to ensure that member firms are 

‘capable of conducting their business in compliance with applicable regulation.’”31 Each 

membership standard plays a critical role in protecting the public interest and investors.32 And, 

“[e]ffective supervision and controls are critical ‘investor protection tools’ to help ‘identify and 

prevent abusive practices.’”33 Given the purpose of these requirements, and FINRA’s evaluation 

of the new member application, we find that FINRA’s rules are, and were applied in a manner, 

consistent with the purposes of the Exchange Act.

E. Deep ATS’s procedural and other arguments against liability are unavailing.

Much of Deep ATS’s appeal revolves around claims that “FINRA had no intention to 

approve the membership of [Deep ATS] as payback for Mr. Balabon suing them in federal 

court.” Specifically, the firm cites the fact that Balabon sued FINRA in federal court for alleged 

discrimination in assessing fines and tortious interference with his business. The court dismissed 

that complaint for failure to exhaust administrative remedies.34 And Deep ATS provides no 

evidence or other support, nor can we find any, that FINRA denied Deep ATS’s new member 

application as retribution. To the contrary, ample evidence shows that Deep ATS failed to meet 

the necessary member admission standards, as we have discussed herein. 

Deep ATS also argues that “FINRA broke federal law by delaying their decision to 

decline the broker dealer application past the 180-day deadline.” If the reasons for denial “were 

genuine,” Deep ATS claims, FINRA should have been able to issue its decision within the 180-

day period “as prescribed by federal law.” But Deep ATS does not cite a federal law, nor are we 

aware of one, that governs the timeliness of Member Supervision’s decision. Rather, FINRA 

Rule 1014 provides that, if Member Supervision does not serve a decision within 180 days after 

an application is filed (or a later agreed-to date), an applicant “may file a written request with the 

FINRA Board requesting that the FINRA Board direct [Member Supervision] to serve a 

30 15 U.S.C. § 78o-3(g)(3)(A); Bering Strait Sec., Inc., 2015 WL 6575667 at *12 (citing 

Frank Kufrovich, Exchange Act Release No. 45437, 2002 WL 215446, at *4 (Feb. 13, 2002) 

(describing the steps an SRO must take when denying an application under the Exchange Act)).

31 Bering Strait Sec., Inc., 2015 WL 6575667, at *12 (citing Duties of Brokers, Dealers, and 

Investment Advisers, Exchange Act Release No. 69013, 2013 WL 771910, at *28 (Mar.1, 2013)).

32 Id.

33 Id. (citing Duties of Brokers, Dealers, and Investment Advisers, 2013 WL 771910, at 

*27).

34 See Balabon v. Ketchum, Case No. 1:17-cv-486-LY, 2018 WL 835206, at *2 (W.D. Tex. 

Feb. 9, 2018) (report and recommendation), adopted by 2018 WL 1858135 (Mar. 7, 2018), aff’d, 

785 F. App’x 263 (5th Cir. 2019).
15

decision.”

35

 And here, although Member Supervision did not issue a decision within 180 days of 

Deep ATS filing its application, Deep ATS did not then file a written request for the FINRA 

Board to direct Member Supervision to issue its decision.36 By not doing so, Deep ATS forfeited 

its right to object on such timeliness grounds.37 

Deep ATS also makes various broad and unsupported claims about its own business, 

FINRA, and the overall market. Deep ATS discusses, for example, the benefits of its unique 

trading platform; problems in the “markets”; and FINRA’s alleged “clueless[ness]” and “rigid 

system of rules.” Even if we accepted these claims as true, which we do not, they have no 

bearing on whether Deep ATS met its burden of establishing that it satisfied the standards for 

membership discussed above under FINRA Rule 1014(a). 

* * *

For the reasons above, we find that FINRA properly denied Deep ATS’s new 

membership application under FINRA rules.38

An appropriate order will issue.39

By the Commission (Chair GENSLER and Commissioners PEIRCE, CRENSHAW,

UYEDA and LIZÁRRAGA).

Vanessa A. Countryman

Secretary

35 FINRA Rule 1014(c)(3).

36 See Sierra Nevada Sec., Inc., Exchange Act Release No. 41330, 1999 WL 239682, at *5 

(Apr. 26, 1999) (finding that a procedural error did not deny the firm a fair hearing and that 

“[t]he only remedy for delay provided by Rule 1014 is an order requiring that a decision be 

issued immediately”). 

37 Cf. Potomac Cap. Mkts., LLC, Exchange Act Release No. 91172, 2021 WL 666510, at *2 

(Feb. 19, 2021) (explaining that “applicants who fail to exhaust administrative remedies before 

FINRA thereby forfeit any future challenge to FINRA’s actions before the Commission”).

38 On November 30, 2021, Deep ATS filed a letter from Balabon that the firm requested be 

added to the record. In the letter, Balabon “report[s] a felony committed by FINRA this year.” 

Balabon states that FINRA requested documents from him more than “two years after . . . all of 

his security licenses expired” and later informed him that he had violated FINRA Rule 8210 and 

“threatened to fine, ban him from the industry, and destroy his good name.” If Balabon wishes 

to have the Commission review any sanctions imposed by FINRA for a violation of FINRA Rule 

8210, he must do so in a separate appeal.

39 We have considered all of the parties’ contentions. We have rejected or sustained them 

to the extent that they are inconsistent or in accord with the views expressed in this opinion.
UNITED STATES OF AMERICA

before the

SECURITIES AND EXCHANGE COMMISSION

SECURITIES EXCHANGE ACT OF 1934

Release No. 99662 / March 4, 2024 

Admin. Proc. File No. 3-20362

In the Matter of the Application of

DEEP ATS, LLC

For Review of Action Taken by 

FINRA

ORDER DISMISSING APPLICATION FOR REVIEW

On the basis of the Commission’s opinion issued this day, it is

ORDERED that the application for review filed by Deep ATS, LLC, is dismissed.

By the Commission.

Vanessa A. Countryman

 Secretary