TradeStation Securities

Kurta Law is investigating TradeStation Securities (CRD#: 39473). This brokerage firm offers online trading platforms and tools to investors. TradeStation Securities is based in Plantation, Florida.

TradeStation Securities has also operated under the following names:

• Online Trading Inc.Com
• TradeStation
• OnlineTrading.Com
• OnlineTradingInc.Com Corp
• Online Trading, Inc.

Fees and Conflicts of Interest

Brokerage firms are required to inform investors about the fees and conflicts of interest associated with their business in a Form CRS, or Customer Relationship Summary. TradeStation Securities discloses the following information in its Form CRS, as well as additional information on its website:

• TradeStation Securities charges fees on each transaction which vary depending on your pricing plan.
• If you engage in margin trading, you’ll pay interest on your balance. You may also incur Short Debit Fees to maintain short positions in your margin account, which will vary depending on market conditions. Margin interest and fees incentivize the firm to encourage you to trade on margin.
• Mutual funds charge 12b-1 and management fees that will be disclosed in the fund’s prospectus.
• TradeStation Securities also charges service fees, such as account transfer and annual IRA account fees.
• Some market centers (exchanges, electronic communication networks, and broker-dealers) compensate TradeStation Securities for routing equities and options orders to them. Higher trading volume may result in greater compensation for the firm, incentivizing it to encourage trading.
• If you lend out your securities through the firm’s Fully Paid Stock Lending Program, TradeStation Securities will receive a portion of the revenue generated by your securities.

Broker-Dealer Services

TradeStation Securities does not provide recommendations to investors or offer proprietary investments, but allows you to trade in stocks and other investments. Investors should be aware that some of these products can feature a high degree of risk:

• Exchange-traded funds (ETFs)
• Options
• Mutual funds
• Fixed income securities

Regulatory Actions

TradeStation Securities has allegations involving its systems of supervision from the SEC and FINRA in its regulatory history. You can access its full history of regulatory actions on its detailed BrokerCheck page.

AML Program Allegations

On February 9, 2024, TradeStation Securities consented to the entry of findings that it allegedly failed to establish and implement an anti-money laundering (AML) program reasonably designed to report suspicious trading.

In a Letter of Acceptance, Waiver & Consent (AWC), FINRA alleged that the firm’s AML program did not establish reasonable procedures for the escalation of potentially suspicious activity for review.

FINRA also alleged that TradeStation Securities’ Written Supervisory Procedures (WSPs) failed to describe the review and approval processes concerning the deposit and resale of low-priced securities, designed to prevent the firm from participating in the unregistered distribution of restricted securities.

TradeStation Securities consented to a censure, a $700,000 fine, and an undertaking to review its supervisory system for the issues alleged in the AWC. You can read the full AWC here.

Identity Theft Program Allegations

On July 27, 2022, the Securities and Exchange Commission filed cease-and-desist proceedings against TradeStation Securities, alleging that the firm failed to adequately develop a written identity theft prevention program from at least 2017 to 2019.

TradeStation Securities allegedly failed to appropriately respond to red flags and ensure the program was regularly updated.

The SEC censured the firm, fined it $425,000, and ordered TradeStation Securities to cease and desist from violations of Rule 201 of Regulation S-ID.

Order Flow Allegations

In an AWC filed on March 2, 2021, FINRA alleged that TradeStation Securities predominantly routed investors’ equity and option orders to certain market-makers and exchanges that compensated the firm for order flow.

FINRA alleged that TradeStation Securities failed to exercise reasonable diligence with regard to best execution and did not review the execution quality it received for certain types of orders.

Between 2014 and 2016, the firm allegedly also failed to report all of the material aspects of its order flow arrangements in its quarterly 606 reports to the SEC. These reports provide information about broker-dealers relationships with their routing venues and potential conflicts of interest.

FINRA censured TradeStation Securities and fined it $850,000. You can access the full AWC here.

Alleged Failure to Report Short Positions

On July 29, 2015, FINRA alleged in an AWC that TradeStation Securities failed to report a total of 2,803 short interest positions totaling 3,895,186 shares between 2008 and 2013. The firm allegedly also inaccurately reported 13 positions totaling 20,361 shares instead of 27,622 shares.

TradeStation Securities consented to a censure and a fine of $55,000. You can read the AWC here.

How Can Investors Recover Lost Funds from a Brokerage Firm?

If you have concerns about your broker’s conduct, you may be able to recover your losses through FINRA arbitration. Brokerage firms often require FINRA arbitration to resolve investor disputes, and a securities attorney can help you navigate the process.

Kurta Law Can Help

Investors who lost money working with TradeStation Securities should reach out to an investment fraud lawyer for help. Our attorneys offer free case evaluations and do not charge a fee unless we win your case. Call (877) 600-0098 or email info@kurtalawfirm.com.