Thread by @dlauer

Today @FINRA announced a $2M fine against Deutsche Bank for failing to ensure they were getting best execution for their customers.

If you read the order, it might sound very familiar to you, if you also read the book Flash Boys.

finra.org/media-center/n…

@FINRA While Flash Boys had some mistakes in it, the core message was the conflict-of-interest at the heart of order routing, and the failure of exchanges to maintain fair and efficient markets.

An extreme example of a conflict is a broker who operates and preferences their own ATS.

@FINRA In this case, that preferencing results in an extreme drop in fill rates. Funny - exactly what Flash Boys had pointed out.

But here's the question - why is Deutsche Bank allowed to continue to operate an ATS? What kind of violation does it take to result in more than a fine?

As long as firms face fines, and not more severe and significant penalties, we will continue to see violations exposed years later.

Good to see @FINRA enforce best ex, which is so rarely done, because it's like "trying to nail jello to a wall" according to a former regulator.

This is the same firm that was fined $37M for misleading clients about their dark pool, and was also fined previously by FINRA.
marketwatch.com/story/deutsche…

Thanks to @JoeSaluzzi
pointing out that DB has stopped operating an ATS, though not forced by FINRA.

https://twitter.com/JoeSaluzzi/status/1501229852078526468