Online brokerage services provider TD Ameritrade agreed to pay a $600,000 fine for violations of Financial Industry Regulatory Authority (FINRA) rules over its automated approval system that allegedly allowed inexperienced traders to engage in options trading.
TD Ameritrade used an automated, electronic system to issue approvals and denials for customer options trading requests that was not reasonably designed to catch inconsistencies in customers’ descriptions of their trading experience, as well as other factors that might lead to their application being denied, according to a FINRA order published Friday.
