The Securities and Exchange Commission ordered Vandham Securities Corp. to pay $200,000 on various violations it committed when it facilitated the sale of shares for two of its broker/dealer customers.
The regulator said from January 2016 to April 2017, Vandham Securities routinely executed a series of short sales throughout the day for its own account in the stocks being sold by the other firms on behalf of their customers, and then later purchased those shares at a lower price from the other firms, also in its own account, to cover its short positions, thereby realizing a trading profit on each short sale. However, for at least several thousand short sales executed in this manner during the period, the company never located shares of those stocks, as required by regulations.
Vandham Securities also failed to comply with anti-money laundering regulations as it engaged in facilitating the sale of low priced and thinly traded over-the-counter stocks, according to the SEC.
