The SEC has levied charges against Wilson-Davis & Co. Inc., as well as CEO Paul Davis, head trader Byron Barkley and former proprietary trader Anthony Kerrigone, for allegedly violating market structure rules.

According to the regulator, Wilson-Davis improperly relied on a limited exception to Regulation SHO for short sales executed in connection with bona fide market-making between November 2011 and May 2013. Much of the company's proprietary trading was not actually bona-fide market making, the SEC said. While improperly using the exception, Wilson-Davis engaged in a number of short sales and reaped improper profits.

Davis, Barkley and Kerrigone all agreed to settle the charges without admitting or denying the findings. Kerrigone will pay a disgorgement of $486,840, prejudgment interest of about $63,161 and a penalty of $50,000. Barkley agreed to pay disgorgement of $67,710, prejudgment interest of $8,978 and a penalty of $50,000. Davis will pay a $25,000 penalty.

The case against Wilson-Davis is being contested.