GTS Securities LLC

History Of GTS Securities LLC

The firm has been a member of FINRA since April 23, 201,1. and its registration remains
in effect. GTS Securities LLC is a proprietary trading firm with no customer order flow. GTS Securities LLC accounts for approximately live percent of all U.S. equities trading volume each day. The firm has
three branch offices, including its headquarters in New York. New York and
approximately 120 registered representatives.

Similar Report: SoLo Funds

The Respondent does not have any relevant disciplinary history with the SEC. any state
securities regulators. FINRA. or any other self-regulatory organization.

GTS Securities LLC Report

GTS Securities LLC Failed to Comnk with the Locate Requirement Because it Misidentified Certain
Securities as Easy to Borrow

1. Exchange Act Rule 203(b)(1) provides that “a broker or dealer may not accept a short
   sale order in an equity security from another person. or effect a short sale in an equity
   security for its own account. unless the broker or dealer has: (1) Borrowed the
   security, or entered into a bona-fide arrangement to borrow the security: or
   (ii) Reasonable grounds to believe that the security can be borrowed so that it can be
   delivered on the date delivery is due: and (iii) Documented compliance with this
   paragraph (b)(1).-
2. Easy-to-borrow (ETB) lists generally may be used to satisfy the locate requirement of
   Exchange Act Rule 203(b)(1).:’
3. From April 23. 2014 through July 31, 2015. GTS Securities LLC received ETB lists from two of its
   clearing firms.
4. One of the clearing firms modified an electronic tag on its ETB list without notifying
   GTS Securities LLC of the modification. GTS’s system did not recognize the modified tag. coding
   certain securities as ETB when they were not on the ETB list. As a result. from April
5. 2014 through July 31. 2015. GTS Securities LLC failed to obtain a locate in connection with
   26.727 proprietary short sale executions because it erroneously believed the securities
   were ETB. Those executions comprised a small fraction of all short sales that GTS Securities LLC
   executed during the period.
6. On July 31, 2015. GTS Securities LLC stopped using the clearing firm and. therefore, no longer
   relied on its ETB list for locates.

6. By virtue of the foregoing. GTS Securities LLC violated Exchange Act Rule 203(b)(1) and FINRA
   Rule 2010.3

‘ Disciplinary action is being taken concurrently on behalf of Cboe BYX Exchange. Inc.. Cboe BZX Exchange. Inc..
Cboe EDGA Exchange. Inc.. and Cboe EDGX Exchange. Inc. (collectively. Cboe). The firm was a member of
certain Cboe exchanges during the entire review period.
U.S. Securities and Exchange Commission (SEC) Division of Market Regulation: Responses to Frequently Asked
Questions Concerning Regulation SHO (Question 4.2).

GTS Failed to Have a Reasonable Super% ison System to Achie‘e Compliance s% kb the
Locate Requirement

7. NASD Rule 3010 (for conduct before December 1. 2014) and FINRA Rule 3110 (for
   conduct on or after December 1. 2014) require members to establish and maintain a
   system. including written supervisory procedures. to supervise the activities of
   associated persons that is reasonably designed to achieve compliance with applicable
   securities laws and regulations, and with applicable FINRA rules.
8. From April 23. 2014 through July 31. 2015. the firm had a supervisory system.
   including written supervisory procedures. that addressed Regulation SHO, including
   compliance with the locate requirement. The system. however, was not reasonably
   designed to achieve compliance with the locate requirement because it did not include
   any means by which to determine if the clearing firm’s ETB lists were correctly
   recognized by GTS’s systems and that its locate decisions were consistent with
   accurate ETB information. For this reason, the firm’s systems were not reasonably
   designed to achieve compliance with Rule 203(b)(1).
9. By virtue of the foregoing. GTS violated NASD Rule 3010 (for conduct before
   December 1. 2014) and FINRA Rule 3110 (for conduct on or after December 1,
   2014) and FINRA Rule 2010.

Penalties, Punishments & Sanctions

GTS also consents to the imposition of the following sanctions:

1. a censure: and
2. a total tine of $70,000 to be paid jointly to FINRA and Cboe. of which $30,0004 is
   allocated to FINRA.
   Respondent agrees to pay the monetary sanctions upon notice that this AWC has been
   accepted and that such payments are due and payable. Respondent has submitted an
   Election of Payment form showing the method by which it proposes to pay the fine
   imposed.
   Respondent specifically and voluntarily waives any right to claim an inability to pay.
   now or at any time hereafter, the monetary sanctions imposed in this matter.

GTS Securities LLC Review

From April 23.2014 through July 31. 2015. the firm failed to obtain a locate in
connection with over 26.000 proprietary short sale transactions as required by Rule
203(b)(1) of Regulation S1-10 of the Securities Exchange Act of 1934 (Exchange Act
Rule 203(b)(1)).1 The firm’s failure was attributable to a system coding issue that went
undetected. The firm’s supervisory system, including its written supervisory procedures.
was not reasonably designed to achieve compliance with Rule 203(b)(1) because it did
not include a review to determine if the easy-to-borrow designation for equity securities
was accurately captured into the firm’s systems.
Based on the foregoing. the firm violated Exchange Act Rule 203(b)(1). FINRA Rule

2010. NASD Rule 3010 (for conduct before December 1. 2014). FINRA Rule 3110 (for
      conduct on or after December 1. 2014). and FINRA Rule 2010.

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Help For Victims Of GTS Securities LLC

If you have lost funds because of misrepresentation, unsuitable investment, or unsuitable investment strategy from GTS Securities LLC. Then you can take legal action and get justice. Fraud, Malpractice & dereliction of duty should not be taken lightly, especially in this industry. We highly suggest that you notify authorities or seek legal action if your financial advisor or brokerage firm fails to abide by FINRA’s rules are regulations.

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Financial advisors are regulatory & legally obligated to suggest (recommend) the most suitable investments/investment strategies to their clients. Their suggestions should have their client’s best interests and should be appropriate for their client’s goals and needs. Similarly, the brokerage firm which hires financial advisors also has a regulatory & legal obligation to keep a close watch and supervise their Financial Advisors’ practices & behavior. They need to make sure that the financial advisor is not being manipulative or having an unreasonable bias towards certain investments. If the financial advisor and/or the brokerage firm breaches these duties, then the client/customer may be entitled to a full or partial recovery of their losses.

Financial advisors need to have the interest of their clients when giving suggestions related to investments and investment strategies. Reasonable basis suitability requires the advisor to do their best to analyze & identify the risks and rewards associated with their suggested investment and/or investment strategy.