Avatar Securities, LLC has settled disciplinary charges with Nasdaq PHLX LLC over failures to supervise trader activity and prevent market manipulation adequately, the exchange announced on September 4, 2026. The settlement, documented through a Letter of Acceptance, Waiver and Consent (AWC), addresses supervision deficiencies spanning from March 2020 through July 2026 at the proprietary trading firm headquartered in New York.
- Period of Violations: March 2020 through July 2026
- Member Status: PHLX member since August 2014; FINRA member since February 2024
- Firm Size: Approximately 80 registered representatives across two branches
- CRD Number: 147763
- Disciplinary History: None before this matter
The exchange found that Avatar Securities failed to reasonably supervise a trader despite determining the individual warranted heightened oversight based on disciplinary history. More significantly, the firm’s supervisory systems were not reasonably designed to prevent or detect spoofing, layering, or disruptive quoting and trading activity between March 2020 and July 2026. The violations fall under Phlx Rule General 9, Sections 20(h) and 1(c), which require members to establish, maintain, and enforce written supervisory procedures designed to prevent and detect securities law violations.
The disciplinary matter originated from cross-market surveillance conducted by the Financial Industry Regulatory Authority (FINRA). Under the settlement terms, Avatar Securities neither admitted nor denied the findings but consented to the entry of findings for settlement purposes. The firm is required to update its Form BD registration documents and notify Nasdaq PHLX or FINRA of any address changes. The exchange will separately notify the firm regarding any fine imposed through Nasdaq’s Finance Department.
Avatar Securities is a proprietary trading firm that has maintained membership with PHLX since 2014 and joined FINRA in February 2024. The firm had no relevant disciplinary history before this enforcement action.
