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Spoofing, Surveillance and Supervision

Jay Biondo, Product Manager - Surveillance at Trading Technologies, co-authored an article along with James Lundy and Nicholas Wendland, both of Drinker Biddle & Reath LLP, reviewing the CFTC's regulations and expanding efforts, 21st century surveillance and supervision, as well as strategic recommendations.

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July 1, 2011

Rodman Mum on OTCBB Plans

By Peter Chapman

Rodman & Renshaw Capital Group is not commenting on its previously announced acquisition of certain assets related to the OTC Bulletin Board from the Financial Industry Regulatory Authority.

"It's still in process," Rodman chief financial officer Dave Horin said last month at Sandler O'Neill's exchange and brokerage conference. "But we are still under a draconian nondisclosure agreement with FINRA, so we can't comment on it."

Last September, the brokerage announced it would acquire certain OTCBB assets from FINRA, but did not specify the nature of the assets, the price nor its intentions. In an April filing, FINRA told the Securities and Exchange Commission the assets in question were the OTCBB trademark, the operation's Internet address and content on the OTCBB Web site. The deal requires SEC approval.

Besides its role as a provider of information about over-the-counter companies quoted through OTCBB, FINRA also collects those quotes from dealers and disseminates them to market data firms. It plans to continue to operate that service under a new name, Non-NMS Quotation Service, it told the SEC. (It is also attempting to take over the quote dissemination service operated by rival OTC Markets Group.)

The sale to Rodman has been publicly criticized by OTC Markets, as well as Roth Capital Partners, a Rodman competitor. Roth told the SEC in a letter the deal would give Rodman an advantage over competitors, as the OTCBB is a well-known brand. The use of the OTCBB name by Rodman to promote its own offerings could also mislead investors, Roth said, as investors might assume the offerings had the blessing of FINRA.


-Peter Chapman