SEC Charges Bloomberg Tradebook for Order Routing Misrepresentations

The Securities and Exchange Commission today filed settled charges against registered broker-dealer Bloomberg Tradebook LLC for making material misrepresentations and omitting material facts about how the firm handled certain customer trade orders. The SEC’s order finds that Tradebook routed certain customer orders – primarily orders entered by customers who paid relatively low commission rates – using an undisclosed arrangement that it referred to internally as the “Low Cost Router.” As part of this arrangement, Tradebook allowed three unaffiliated broker-dealers to determine the venues to which certain customer “immediate-or-cancel” orders would be routed for execution. Tradebook did not inform affected customers that a significant portion of their orders would be routed by an unaffiliated broker-dealer instead of by Tradebook.