SEC Censures OTC Link LLC for Regulation SCI Compliance Failures
The U.S. Securities and Exchange Commission ordered the New York-based broker dealer to pay a $575,000 penalty for repeated violations between 2016 and 2025.
AI illustrationThe U.S. Securities and Exchange Commission censured New York-based broker dealer OTC Link LLC and ordered it to pay a $575,000 civil penalty for longstanding violations of Regulation Systems Compliance and Integrity (SCI).
According to the U.S. Securities and Exchange Commission, between August 2016 and March 2025, OTC Link LLC failed to establish, maintain, and enforce certain written policies and procedures required by Regulation SCI for OTC Link ATS, an alternative trading system for over-the-counter securities.
The required policies and procedures pertained to system security, access control, and application vulnerability management, testing, and remediation.
The SEC’s Division of Examinations examined OTC Link ATS several times during the period and flagged deficiencies each time. OTC Link LLC repeatedly failed to promptly remediate such deficiencies.
“OTC Link’s continual failure to remediate deficiencies even after they were repeatedly flagged by Division of Examinations staff reflects a disregard for their findings and the overall examinations process and justifies a meaningful penalty,” said Laura D’Allaird, Chief of the Division of Enforcement’s Cyber and Emerging Technologies Unit.
The SEC’s order finds that OTC Link LLC lacked written policies and procedures reasonably designed to ensure that OTC Link ATS’s SCI systems and indirect SCI systems had levels of capacity, integrity, resiliency, availability, and security adequate to maintain operational capability and promote fair and orderly markets. This violated Rule 1001(a)(1) of Regulation SCI.
By failing to have the required minimum policies and procedures, to periodically review their effectiveness, and to take prompt action to remedy deficiencies, OTC Link LLC also violated Rules 1001(a)(2) and 1001(a)(3).
Without admitting the findings, OTC Link LLC agreed to a cease-and-desist order, a censure, and a civil penalty of $575,000. The SEC issued its order on Sept. 22, 2026.