In re OTC LINK LLC

 UNITED STATES OF AMERICA 
 Before the 
 SECURITIES AND EXCHANGE COMMISSION 
 
 
SECURITIES EXCHANGE ACT OF 1934 
Release No. 100692 / August 12, 2024 
 
ADMINISTRATIVE PROCEEDING 
File No. 3-21991 
 
 
In the Matter of 
 
OTC LINK LLC, 
 
Respondent. 
 
 
 
 
ORDER INSTITUTING ADMINISTRATIVE 
AND CEASE-AND-DESIST PROCEEDINGS, 
PURSUANT TO SECTIONS 15(b) AND 21C 
OF THE SECURITIES EXCHANGE ACT OF 
1934, MAKING FINDINGS, AND IMPOSING 
REMEDIAL SANCTIONS AND A CEASE-
AND-DESIST ORDER 
   
 
I. 
 
 The Securities and Exchange Commission (“Commission”) deems it appropriate and in the 
public interest that public administrative and cease-and-desist proceedings be, and hereby are, 
instituted pursuant to Sections 15(b) and 21C of the Securities Exchange Act of 1934 (“Exchange 
Act”) against OTC Link LLC (“OTC Link” or “Respondent”).   
 
II. 
 
 In anticipation of the institution of these proceedings, Respondent has submitted an Offer 
of Settlement (the “Offer”) which the Commission has determined to accept.  Solely for the 
purpose of these proceedings and any other proceedings brought by or on behalf of the 
Commission, or to which the Commission is a party, and without admitting or denying the findings 
herein, except as to the Commission’s jurisdiction over it and the subject matter of these 
proceedings, which are admitted, Respondent consents to the entry of this Order Instituting 
Administrative and Cease-and-Desist Proceedings Pursuant to Sections 15(b) and 21C of the 
Securities Exchange Act of 1934, Making Findings, and Imposing Remedial Sanctions and a 
Cease-and-Desist Order (“Order”), as set forth below. 
 

 
 
2 
III. 
 
 On the basis of this Order and Respondent’s Offer, the Commission finds
1
 that: 
 
Summary 
 
1. This proceeding concerns OTC Link’s failure to monitor, investigate and file 
Suspicious Activity Reports (“SARs”) between March 2020 and May 2023 (the “Relevant Period”) 
relating to suspicious transactions conducted through its Alternative Trading System (“ATS”) 
platforms known as OTC Link ATS, OTC Link ECN and OTC Link NQB (collectively, the “OTC 
Link ATS Platforms”).  The OTC Link ATS Platforms only admit U.S. registered broker-dealers as 
subscribers and exclusively trade in Over-the-Counter (“OTC”) securities, many of which are 
considered microcap or penny stock securities.
2
   
 
2. As a registered broker-dealer, OTC Link was required to comply with the Bank 
Secrecy Act (“BSA”) and its implementing regulations, which require OTC Link to file SARs 
relating to suspicious transactions conducted through the OTC Link ATS Platforms that OTC Link 
knew, suspected, or had reason to suspect involved the use of these trading platforms to facilitate 
fraudulent activity or that had no business or apparent lawful purpose.  However, until June 2023, 
OTC Link failed to adopt or implement reasonably designed anti-money laundering (“AML”) 
policies and procedures (“AML Policies”) to surveil transactions conducted through the OTC Link 
ATS Platforms for possible red flags of suspicious activity.   
 
3. Due to these deficiencies, OTC Link failed to surveil, investigate, or file SARs on 
numerous transactions that it had reason to suspect involved possible fraudulent activity or for 
which there was no business or apparent lawful purpose.  In particular, during the Relevant Period, 
OTC Link failed to surveil for, recognize and investigate red flags of: (a) sell orders from 
subscribers representing a large volume of trading relative to the average daily trading volume in 
thinly-traded microcap issuers; (b) consistent one-sided trading by a subscriber in a particular thinly-
traded microcap issuer accompanied by a significant increase in stock price; (c) trading activity by 
subscribers involving apparent pre-arranged securities trading, including wash or cross trades, in 
thinly-traded microcap securities; or (d) transactions involving subscribers who were publicly 
known to be the subject of criminal, civil or regulatory actions for crime, corruption, or misuse of 
 
1
 The findings herein are made pursuant to Respondent’s Offer of Settlement and are not binding 
on any other person or entity in this or any other proceeding.  
 
2
 “OTC securities” are securities that are not listed on a national securities exchange.  The 
securities at issue here are primarily microcap and penny stock securities.  The term “microcap 
stock” generally refers to securities issued by companies with a market capitalization of less than 
$250 to $300 million.  The term “penny stock” generally refers to a security issued by a very 
small company that trades at less than $5 per share.  See https://www.investor.gov/introduction-
investing/investing-basics/glossary/microcap-stock; Section 3(a)(51) of the Exchange Act and 
Rule 3a51-1 thereunder.   

 
 
3 
public funds.  As a result, OTC Link failed to file numerous SARs and, accordingly, willfully 
violated Section 17(a) of the Exchange Act and Rule 17a-8 thereunder. 
 
Respondent and Relevant Entities  
 
4. OTC Link is a Delaware limited liability company with its principal place of 
business in New York, New York.  OTC Link is an indirect, wholly-owned subsidiary of OTC 
Markets Group, Inc.  It has been registered with the Commission as a broker-dealer since 2012.  
OTC Link’s sole line of business is its operation of three ATS platforms: OTC Link ATS, OTC 
Link ECN and OTC Link NQB.   
 
5. OTC Link ATS is an ATS operated by OTC Link for OTC securities.  In 2012, 
OTC Link ATS noticed its operations as an ATS by filing a Form ATS initial operation report with 
the Commission.  OTC Link ATS operates as a Qualified Interdealer Quotation System (“IDQS”).  
OTC Link ATS provides a fully attributable, network-based model for quoting and facilitating 
transactions in OTC securities that publishes broker-dealer quotations, delivers trade messages, and 
allows subscribers to execute or negotiate trades with known counterparties.  OTC Link ATS is not 
a national securities exchange or self-regulatory organization. 
 
6. OTC Link ECN is an ATS operated by OTC Link for OTC securities.  Launched 
in 2017, OTC Link ECN operates pursuant to a Form ATS on file with the Commission as an 
Electronic Communication Network and provides subscribers with anonymous order matching 
functionality.  OTC Link ECN is not a national securities exchange or self-regulatory organization.    
 
7. OTC Link NQB is an ATS operated by OTC Link for OTC securities.  Launched 
in 2021, OTC Link NQB operates pursuant to a Form ATS on file with the Commission as an 
IDQS with an order matching functionality.  OTC Link NQB is not a national securities exchange 
or self-regulatory organization.    
 
Background 
 
8. The BSA and implementing regulations promulgated by the U.S. Department of the 
Treasury’s Financial Crimes Enforcement Network (“FinCEN”) require broker-dealers such as 
OTC Link to file SARs with FinCEN to report, among other things, a transaction (or a pattern of 
transactions of which the transaction is a part) conducted or attempted by, at, or through the 
broker-dealer involving or aggregating funds or other assets of at least $5,000 that the broker-
dealer knows, suspects, or has reason to suspect: (1) involves funds derived from illegal activities 
or was intended or conducted to disguise or hide funds or assets derived from illegal activities; (2) 
is designed to evade any requirement of the BSA; (3) has no business or apparent lawful purpose 
or is not the sort in which the particular customer would normally be expected to engage and the 
broker-dealer knows of no reasonable explanation for the transaction after examining the available 
facts; or (4) involves the use of the broker-dealer to facilitate criminal activity.  See 31 C.F.R. § 
1023.320(a)(2) (the “SAR Rule”). 
 

 
 
4 
9. To be liable for failing to file a SAR, a broker-dealer must know, suspect, or have 
reason to suspect that a transaction falls into one of the four categories of suspicious activity in 31 
C.F.R. § 1023.320(a)(2).  The Financial Industry Regulatory Authority (“FINRA”) and FinCEN 
have longstanding regulatory guidance highlighting red flags related to penny stock transactions 
and FINRA has cautioned firms that its examples of red flags are “merely illustrative” and that 
other situations may arise that require further investigation.  See FinCEN’s The SAR Activity 
Review Trends Tips & Issues, Issue 15, “ln Focus: The Securities and Futures Industry;” FINRA’s 
Updated Small Firm Template Anti-Money Laundering (AML) Program (updated January 2010); 
FINRA Regulatory Notice 09-05 (Jan. 2009).  In May 2019, FINRA issued Regulatory Notice 19-
18, which included a list of previously identified red flags and provided additional examples of red 
flags potentially indicative of suspicious activity, including examples of manipulative trading of 
microcap and penny stock securities.  FINRA Regulatory Notice 19-18 (May 2019), at 3–11. 
 
10. The BSA and its implementing regulations require the filing of a SAR no later than 
30 calendar days after the date of the broker-dealer’s initial detection of facts that may constitute a 
basis for filing a SAR. If no suspect is identified on the date of such initial detection, a broker-
dealer may delay filing a SAR for an additional 30 calendar days to identify a suspect, but in no 
case shall reporting be delayed more than 60 calendar days after the date of such initial detection.  
31 CFR § 1023.320(b).   
 
11. Exchange Act Rule 17a-8 requires broker-dealers registered with the Commission 
to comply with the reporting, record-keeping, and record retention requirements of the BSA.  The 
failure to file a SAR, including continuing activity SARs, as required by the SAR Rule is a 
violation of Section 17(a) of the Exchange Act and Rule 17a-8 thereunder.  See SEC v. Alpine Sec. 
Corp., 308 F. Supp. 3d 775, 798–800 (S.D.N.Y. 2018), aff’d, 982 F.3d 68 (2d Cir. 2020), cert. 
denied, Alpine Sec. Corp. v. SEC, No. 19-3272, 595 U.S. ___ (2021).  
 
Facts 
 
12. OTC Link has operated OTC Link ATS since 2012, OTC Link ECN since 2017 
and OTC Link NQB since 2021, all of which are among the largest ATSs for trading OTC 
securities in the United States. As an operator of ATSs for OTC securities, OTC Link plays a 
significant role in executing trades of microcap and penny stock securities.  Microcap and penny 
stock securities tend to be high-risk securities because they typically have no minimum listing 
standards, lack liquidity, and have high volatility, and because there is often a lack of public 
information available about these securities.  OTC Link ECN and OTC Link NQB act as the 
executing party on an agency basis in relation to all transactions executed on these platforms, 
whereas OTC Link ATS facilitates transactions through, among other things, the publishing of 
quotes and delivery of trade-related messages. Despite tens of thousands of higher risk microcap 
and penny stock securities transactions conducted daily through the OTC Link ATS Platforms, 
during the Relevant Period, OTC Link failed to establish a reasonably designed AML surveillance 
program for its transactions, which resulted in its failure to file SARs during the Relevant Period in 
connection with numerous suspicious transactions.  
 

 
 
5 
13. During the Relevant Period, OTC Link’s AML department consisted of its Chief 
Compliance Officer, who was also designated as the Anti-Money Laundering Compliance Officer 
(the “AMLCO”), and a junior-level Compliance Associate.  OTC Link’s AML Policies specified 
that the AMLCO was responsible for, among other things, monitoring the firm’s compliance with 
its AML obligations and for filing SARs.  Between at least January 1, 2020 and June 30, 2021, the 
AMLCO allocated only approximately two hours per month to the oversight of OTC Link’s AML 
program. 
 
14. OTC Link’s AML Policies during the Relevant Period stated that “since the Firm 
does not handle customer orders, it focuses its oversight of red flags and suspicious activity efforts 
into the activity of the FINRA Member Broker Dealers arranging transactions through the Firm’s 
ATSs.”  Although OTC Link’s AML Policies specified certain “red flags” indicative of suspicious 
activity relating to potential microcap fraud, there was no reference to any red flags associated with 
other risks relevant to OTC Link’s business, including: (a) sell orders from subscribers 
representing a large volume of trading relative to the average daily trading volume in thinly-traded 
microcap issuers; (b) consistent one-sided trading by a subscriber in a particular thinly-traded 
microcap issuer accompanied by a significant increase in stock price; (c) trading activity by 
subscribers involving apparent pre-arranged securities trading, including wash or cross trades, in 
thinly-traded microcap securities; or (d) transactions involving subscribers who were publicly 
known to be the subject of criminal, civil or regulatory actions for crime, corruption, or misuse of 
public funds. Additionally, OTC Link’s AML Policies provided that “[s]ince the firm does not 
have customer information or insight into the client (or retail broker) entering orders the firm is 
somewhat limited in its ability to identify fraud.”   
 
15. During the Relevant Period, OTC Link failed to surveil the vast majority of 
transactions conducted through the OTC Link ATS Platforms for red flags of potentially suspicious 
conduct concerning, among other things, the following types of potentially unlawful, manipulative 
transactions (see FINRA Regulatory Notice 19-18 (May 2019), FINRA Regulatory Notice 09-05 
(Jan. 2009)):  
 
a. Trading activity involving a significant proportion of the daily trading volume in a thinly 
traded or low-priced security;  
 
b. Trading activity involving a sudden spike in investor demand for, coupled with a 
rising/decreasing price in, a thinly-traded or low-priced security;  
 
c. Trading activity involving pre-arranged or other non-competitive securities trading, 
including wash or cross trades, with no apparent business purpose (“pre-arranged or wash 
trading”); or 
 
d.  Transactions involving subscribers who were publicly known to be the subject of 
criminal, civil or regulatory actions for crime, corruption, or misuse of public funds. 
 

 
 
6 
16. In addition, although OTC Link used automated surveillance to identify other forms 
of potentially suspicious trading activity conducted through the OTC Link ATS Platforms, it did 
not allocate sufficient compliance and operations resources to review the vast majority of these 
alerts generated from its automated surveillance system.  
 
17. Specifically, OTC Link did not devote sufficient resources to review the alerts 
generated by its automated surveillance system.  For example, between January 1, 2020 and June 
30, 2021, OTC Link’s automated surveillance system generated 1,862 alerts averaging 310 alerts 
per month.  The AMLCO and Compliance Associate who were responsible for reviewing the 
trading alerts and devoted only approximately five hours per month towards this task, and none of 
these alerts resulted in further AML review or investigation by OTC Link.   
 
18. During the Relevant Period, OTC Link failed to investigate red flags or file any 
SARs in connection with numerous instances of suspicious manipulative trading activity conducted 
through the OTC Link ATS Platforms involving: (a) a large volume of thinly-traded, low-priced 
securities; (b) a sudden spike in investor demand for, coupled with a rising or decreasing price in, 
thinly-traded, low-priced securities; (c) suspicious manipulative, pre-arranged or wash trading 
activity; and/or (d) subscribers who were publicly known to be the subject of criminal, civil or 
regulatory actions for crime, corruption, or misuse of public funds.  
 
19. If OTC Link had in place reasonably designed AML Policies to surveil transactions 
conducted through its OTC Link ATS Platforms for red flags regarding potential suspicious trading 
activity during the Relevant Period, it would have identified the above-referenced suspicious 
transactions concerning potentially unlawful and manipulative trading (including possible 
spoofing, layering, wash trading, pre-arranged trading, and sudden spikes in volume coupled with 
significant volatility) that would have required the filing of numerous SARs. 
 
20. Further, after OTC Link told Enforcement staff that it had identified seven separate 
instances of suspicious activity that warranted the filing of SARs during the Relevant Period, it 
failed to file corresponding SARs in a timely manner due to an oversight by its operations staff.  In 
fact, OTC Link did not file SARs reflecting this suspicious activity until Enforcement staff 
inquired about their whereabouts.  These failures further demonstrate the lack of resources 
dedicated to ensuring an adequate AML surveillance program.  
 
21. As a result of OTC Link’s failure to have or implement reasonably designed AML 
Policies to surveil transactions conducted through the OTC Link ATS Platforms for possible red 
flags regarding suspicious activity, the firm failed to identify and investigate suspicious activity 
and ultimately failed to file a single SAR during the Relevant Period in connection with numerous 
transactions that it should have had reason to suspect involved possible fraudulent activity or had 
no business or apparent lawful purpose.   
 

 
 
7 
OTC Link’s Remedial Efforts 
 
22. In determining to accept the Offer, the Commission considered remedial acts 
undertaken by OTC Link and cooperation afforded the Commission staff. 
 
23. In response to comments that OTC Link received from the Commission’s Division 
of Examinations in March 2022, between May 2022 and May 2023, OTC Link expanded the alert 
criteria for its automated surveillance system by lowering sale volume thresholds for both 
subscribers with disciplinary history and for potential illegal unregistered distributions and has 
begun filing SARs relating to such activities. 
   
24. In October 2023, OTC Link retained a third-party compliance consultant 
(“Compliance Consultant”) to conduct a review of its compliance program and make 
recommendations to improve its AML Policies. 
   
25. In October 2023, OTC Link added two additional members to its AML compliance 
team to assist with its AML surveillance efforts.   
 
Undertakings 
 
 Respondent has undertaken to: 
 
26. Continue its retention of the Compliance Consultant to conduct a comprehensive 
review of OTC Link’s AML Policies relating to the monitoring and reporting of suspicious 
transactions across the three OTC Link ATS Platforms.  OTC Link shall exclusively bear all costs, 
including compensation and expenses, associated with the retention of the Compliance Consultant. 
 
27. OTC Link shall cooperate fully with the Compliance Consultant and shall provide 
the Compliance Consultant with access to such of its files, books, records, and personnel as are 
reasonably requested by the Compliance Consultant for review. 
 
28. OTC Link shall require the Compliance Consultant to submit to the Commission’s 
staff a certification stating whether OTC Link cooperated with the Compliance Consultant with 
every report submitted.  The certification and supporting material shall be submitted along with 
each required report to Sandeep Satwalekar, Assistant Regional Director, Division of Enforcement, 
Securities and Exchange Commission, 100 Pearl St., Suite 20-100, New York, NY 10004-2616. 
 
29. OTC Link shall require the Compliance Consultant to conduct, at the end of the 
second and fourth quarters after the date of the entry of this Order, comprehensive reviews of 
the effectiveness and implementation of OTC Link’s AML Policies (each, an “Interim 
Review”).  OTC Link shall require the Compliance Consultant to provide OTC Link with any 
recommendations for changes or improvements to the effectiveness and implementation of its 
AML Policies as the Compliance Consultant deems appropriate during any Interim Review and 
prior to the issuance of reports required in paragraphs 30, 31, and 34, below. 

 
 
8 
 
30. OTC Link shall require, within thirty (30) days from the completion of the first 
Interim Review, the Compliance Consultant to submit a written and detailed report to OTC Link 
and the Commission staff (the “Semi-Annual Report”).  The Semi-Annual Report will describe 
the first Interim Review, the names of the individuals who performed the Interim Review, the 
conclusions reached, any recommendations by the Compliance Consultant for changes in or 
improvements to OTC Link’s AML Policies and/or OTC Link’s implementation thereof, and 
the status of OTC Link’s adoption of such recommendations by the Compliance Consultant or 
failure to cooperate with reasonable requests to access its files, books, records, or personnel.  
 
31. OTC Link shall require, within thirty (30) days from the completion of the second 
Interim Review, the Compliance Consultant to submit a written and detailed report to OTC Link 
and the Commission staff (the “Anniversary Report”).  The Anniversary Report will describe the 
second Interim Review, the names of the individuals who performed the Interim Review, the 
conclusions reached, any recommendations by the Compliance Consultant for changes in or 
improvements to OTC Link’s AML Policies  and/or OTC Link’s implementation thereof, and the 
status of OTC Link’s adoption of such recommendations by the Compliance Consultant or failure 
to cooperate with reasonable requests to access its files, books, records, or personnel.  
 
32. OTC Link shall adopt all recommendations contained in the Semi-Annual Report 
and the Anniversary Report within forty-five (45) days of the date of each report; provided, 
however, that within thirty (30) days after the date of each report, OTC Link shall in writing 
advise the Compliance Consultant and the Commission staff of any recommendations that OTC 
Link considers to be unduly burdensome, impractical, or inappropriate.  With respect to any 
recommendation that OTC Link considers to be unduly burdensome, impractical, or 
inappropriate, OTC Link need not adopt that recommendation at that time but shall propose in 
writing an alternative policy, procedure, or system designed to achieve the same objective or 
purpose. 
 
33. As to any recommendation on which OTC Link and the Compliance Consultant do 
not agree, OTC Link shall attempt in good faith to reach an agreement with the Compliance 
Consultant on an alternative proposal within sixty (60) days after the date of the Semi-Annual 
Report or Anniversary Report, as applicable.  Within fifteen (15) days after the conclusion of the 
discussion and evaluation by OTC Link and the Compliance Consultant, OTC Link shall require 
that the Compliance Consultant inform OTC Link and the Commission staff in writing of the 
Compliance Consultant’s final determination concerning any recommendation objected to by OTC 
Link.  OTC Link shall abide by the determinations of the Compliance Consultant and, within thirty 
(30) days after final agreement between OTC Link and the Compliance Consultant or final 
determination of the Compliance Consultant, whichever occurs first, OTC Link shall adopt and 
implement all of the recommendations that the Compliance Consultant deems appropriate. 
 
34. Within thirty (30) days of OTC Link’s adoption of all of the recommendations in 
the Anniversary Report that the Compliance Consultant deems appropriate, OTC Link shall require 
the Compliance Consultant to submit a written final report to OTC Link and the Commission staff 

 
 
9 
(the “Final Report”).  The Final Report will (1) describe how OTC Link has adopted and 
implemented the Compliance Consultant’s recommendations, if any, from the Semi-Annual Report 
and Anniversary Report; (2) certify that the Compliance Consultant agrees with OTC Link’s 
adoption and implementation of its recommendations, if any; and (3) include an opinion of the 
Compliance Consultant on whether the AML Policies, and OTC Link’s implementation thereof, 
are reasonably designed to prevent violations of the federal securities laws by OTC Link and its 
employees. 
 
35. For the remainder of the engagement, OTC Link: (1) shall not have the authority to 
terminate the Compliance Consultant or substitute another compliance consultant for the 
Compliance Consultant without the prior written approval of the Commission staff; and (2) shall 
compensate the Compliance Consultant and persons engaged to assist the Compliance Consultant 
for services rendered pursuant to this Order at their reasonable and customary rates.   
 
36. OTC Link shall not enter into any employment, consultant, attorney-client, auditing 
or other professional relationship with Compliance Consultant, or any of its present or former 
affiliates, directors, officers, employees, or agents acting in these capacities, for a period of two 
years from completion of the engagement.   
 
37. The Semi-Annual Report, Anniversary Report and Final Report will likely include 
confidential financial, proprietary, competitive business or commercial information.  Public 
disclosure of a report could discourage cooperation, impede pending or potential government 
investigations or undermine the objectives of the reporting requirement.  For these reasons, among 
others, reports and the contents thereof are intended to remain and shall remain non-public, except 
(1) pursuant to court order, (2) as agreed to by the parties in writing, (3) to the extent that the 
Commission determines in its sole discretion that disclosure would be in furtherance of the 
Commission’s discharge of its duties and responsibilities, or (4) as otherwise required by law. 
 
38. Certification.  OTC Link undertakes to certify, in writing, compliance with the 
undertakings set forth above.  The certification shall identify the undertakings, provide written 
evidence of compliance in the form of a narrative, and be supported by exhibits sufficient to 
demonstrate compliance.  The Commission staff may make reasonable requests for further 
evidence of compliance, and Respondent agrees to provide such evidence.  The certification and 
supporting material shall be submitted to Sandeep Satwalekar, Assistant Regional Director, 
Division of Enforcement, Securities and Exchange Commission, 100 Pearl St., Suite 20-100, New 
York, NY 10004-2616, with a copy to the Office of Chief Counsel of the Enforcement Division, 
no later than sixty (60) days from the date of the completion of the undertakings.  
 
39. Recordkeeping.  OTC Link shall preserve for a period of not less than six (6) years 
from the end of the fiscal year last used, the first two years in an easily accessible place, any record 
of its compliance with the undertakings set forth herein.  
 
40. Deadlines.  For good cause shown, the Commission staff may extend any of the 
procedural dates relating to the undertakings.  Deadlines for procedural dates shall be counted in 

 
 
10 
calendar days, except that if the last day falls on a weekend or federal holiday, the next business 
day shall be considered the last day. 
 
Violations 
 
41. As a result of the conduct described above, OTC Link willfully
3
 violated Section 
17(a) of the Exchange Act and Rule 17a-8 thereunder, which require broker-dealers to comply with 
the reporting, record keeping, and record retention requirements of the BSA, including filing SARs 
as required by the SAR Rule, 31 C.F.R. § 1023.320. 
 
IV. 
 
 In view of the foregoing, the Commission deems it appropriate and in the public interest to 
impose the sanctions agreed to in Respondent OTC Link’s Offer. 
 
 Accordingly, pursuant to Sections 15(b) and 21C of the Exchange Act, it is hereby 
ORDERED that: 
 
A. Respondent OTC Link cease and desist from committing or causing any violations 
and any future violations of Section 17(a) of the Exchange Act and Rule 17a-8 promulgated 
thereunder. 
 
B. Respondent OTC Link is censured.   
 
C. Respondent OTC Link shall, within 30 days of the entry of this Order, pay a civil 
money penalty in the amount of $1,190,000.00 to the Securities and Exchange Commission for 
transfer to the general fund of the United States Treasury, subject to Exchange Act Section 
21F(g)(3).  If timely payment is not made, additional interest shall accrue pursuant to 31 U.S.C. 
§3717. 
 
Payment must be made in one of the following ways:   
 
 
3
 “Willfully,” for purposes of imposing relief under Section 15(b) of the Exchange Act, “‘means 
no more than that the person charged with the duty knows what he is doing.’”  Wonsover v. SEC, 
205 F.3d 408, 414 (D.C. Cir. 2000) (quoting Hughes v. SEC, 174 F.2d 969, 977 (D.C. Cir. 
1949)).  There is no requirement that the actor “also be aware that he is violating one of the 
Rules or Acts.”  Tager v. SEC, 344 F.2d 5, 8 (2d Cir. 1965).  The decision in The Robare Group, 
Ltd. v. SEC, which construed the term “willfully” for purposes of a differently structured 
statutory provision, does not alter that standard.  922 F.3d 468, 478-79 (D.C. Cir. 2019) (setting 
forth the showing required to establish that a person has “willfully omit[ted]” material 
information from a required disclosure in violation of Section 207 of the Advisers Act). 
 

 
 
11 
(1) Respondent may transmit payment electronically to the Commission, which 
will provide detailed ACH transfer/Fedwire instructions upon request;  
 
(2) Respondent may make direct payment from a bank account via Pay.gov 
through the SEC website at http://www.sec.gov/about/offices/ofm.htm; or  
 
(3) Respondent may pay by certified check, bank cashier’s check, or United 
States postal money order, made payable to the Securities and Exchange 
Commission and hand-delivered or mailed to:  
 
Enterprise Services Center 
Accounts Receivable Branch 
HQ Bldg., Room 181, AMZ-341 
6500 South MacArthur Boulevard 
Oklahoma City, OK 73169 
 
Payments by check or money order must be accompanied by a cover letter identifying OTC 
Link as a Respondent in these proceedings, and the file number of these proceedings; a copy of the 
cover letter and check or money order must be sent to Sandeep Satwalekar, Assistant Regional 
Director, Division of Enforcement, Securities and Exchange Commission, 100 Pearl St., Suite 20-
100, New York, NY 10004-2616. 
 

 
 
12 
D. Amounts ordered to be paid as civil money penalties pursuant to this Order shall be 
treated as penalties paid to the government for all purposes, including all tax purposes.  To 
preserve the deterrent effect of the civil penalty, Respondent agrees that in any Related Investor 
Action, it shall not argue that it is entitled to, nor shall it benefit by, offset or reduction of any 
award of compensatory damages by the amount of any part of Respondent’s payment of a civil 
penalty in this action (“Penalty Offset”).  If the court in any Related Investor Action grants such a 
Penalty Offset, Respondent agrees that it shall, within 30 days after entry of a final order granting 
the Penalty Offset, notify the Commission’s counsel in this action and pay the amount of the 
Penalty Offset to the Securities and Exchange Commission.  Such a payment shall not be deemed 
an additional civil penalty and shall not be deemed to change the amount of the civil penalty 
imposed in this proceeding.  For purposes of this paragraph, a “Related Investor Action” means a 
private damages action brought against Respondent by or on behalf of one or more investors based 
on substantially the same facts as alleged in the Order instituted by the Commission in this 
proceeding. 
 
E. Respondent shall comply with the undertakings enumerated in paragraphs 26 
through 40 above. 
 
 By the Commission. 
 
 
 
Vanessa A. Countryman 
        Secretary 
 

UNITED STATES OF AMERICA 

 Before the 

 SECURITIES AND EXCHANGE COMMISSION 

 

 

SECURITIES EXCHANGE ACT OF 1934 

Release No. 100692 / August 12, 2024 

 

ADMINISTRATIVE PROCEEDING 

File No. 3-21991 

 

 

In the Matter of 

 

OTC LINK LLC, 

 

Respondent. 

 

 

 

 

ORDER INSTITUTING ADMINISTRATIVE 

AND CEASE-AND-DESIST PROCEEDINGS, 

PURSUANT TO SECTIONS 15(b) AND 21C 

OF THE SECURITIES EXCHANGE ACT OF 

1934, MAKING FINDINGS, AND IMPOSING 

REMEDIAL SANCTIONS AND A CEASE-

AND-DESIST ORDER 

   

 

I. 

 

 The Securities and Exchange Commission (“Commission”) deems it appropriate and in the 

public interest that public administrative and cease-and-desist proceedings be, and hereby are, 

instituted pursuant to Sections 15(b) and 21C of the Securities Exchange Act of 1934 (“Exchange 

Act”) against OTC Link LLC (“OTC Link” or “Respondent”).   

 

II. 

 

 In anticipation of the institution of these proceedings, Respondent has submitted an Offer 

of Settlement (the “Offer”) which the Commission has determined to accept.  Solely for the 

purpose of these proceedings and any other proceedings brought by or on behalf of the 

Commission, or to which the Commission is a party, and without admitting or denying the findings 

herein, except as to the Commission’s jurisdiction over it and the subject matter of these 

proceedings, which are admitted, Respondent consents to the entry of this Order Instituting 

Administrative and Cease-and-Desist Proceedings Pursuant to Sections 15(b) and 21C of the 

Securities Exchange Act of 1934, Making Findings, and Imposing Remedial Sanctions and a 

Cease-and-Desist Order (“Order”), as set forth below. 

 



 

 

2 

III. 

 

 On the basis of this Order and Respondent’s Offer, the Commission finds1 that: 

 

Summary 

 

1. This proceeding concerns OTC Link’s failure to monitor, investigate and file 

Suspicious Activity Reports (“SARs”) between March 2020 and May 2023 (the “Relevant Period”) 

relating to suspicious transactions conducted through its Alternative Trading System (“ATS”) 

platforms known as OTC Link ATS, OTC Link ECN and OTC Link NQB (collectively, the “OTC 

Link ATS Platforms”).  The OTC Link ATS Platforms only admit U.S. registered broker-dealers as 

subscribers and exclusively trade in Over-the-Counter (“OTC”) securities, many of which are 

considered microcap or penny stock securities.2   

 

2. As a registered broker-dealer, OTC Link was required to comply with the Bank 

Secrecy Act (“BSA”) and its implementing regulations, which require OTC Link to file SARs 

relating to suspicious transactions conducted through the OTC Link ATS Platforms that OTC Link 

knew, suspected, or had reason to suspect involved the use of these trading platforms to facilitate 

fraudulent activity or that had no business or apparent lawful purpose.  However, until June 2023, 

OTC Link failed to adopt or implement reasonably designed anti-money laundering (“AML”) 

policies and procedures (“AML Policies”) to surveil transactions conducted through the OTC Link 

ATS Platforms for possible red flags of suspicious activity.   

 

3. Due to these deficiencies, OTC Link failed to surveil, investigate, or file SARs on 

numerous transactions that it had reason to suspect involved possible fraudulent activity or for 

which there was no business or apparent lawful purpose.  In particular, during the Relevant Period, 

OTC Link failed to surveil for, recognize and investigate red flags of: (a) sell orders from 

subscribers representing a large volume of trading relative to the average daily trading volume in 

thinly-traded microcap issuers; (b) consistent one-sided trading by a subscriber in a particular thinly-

traded microcap issuer accompanied by a significant increase in stock price; (c) trading activity by 

subscribers involving apparent pre-arranged securities trading, including wash or cross trades, in 

thinly-traded microcap securities; or (d) transactions involving subscribers who were publicly 

known to be the subject of criminal, civil or regulatory actions for crime, corruption, or misuse of 

 
1 The findings herein are made pursuant to Respondent’s Offer of Settlement and are not binding 

on any other person or entity in this or any other proceeding.  

 
2 “OTC securities” are securities that are not listed on a national securities exchange.  The 

securities at issue here are primarily microcap and penny stock securities.  The term “microcap 

stock” generally refers to securities issued by companies with a market capitalization of less than 

$250 to $300 million.  The term “penny stock” generally refers to a security issued by a very 

small company that trades at less than $5 per share.  See https://www.investor.gov/introduction-

investing/investing-basics/glossary/microcap-stock; Section 3(a)(51) of the Exchange Act and 

Rule 3a51-1 thereunder.   

https://www.investor.gov/introduction-investing/investing-basics/glossary/microcap-stock
https://www.investor.gov/introduction-investing/investing-basics/glossary/microcap-stock


 

 

3 

public funds.  As a result, OTC Link failed to file numerous SARs and, accordingly, willfully 

violated Section 17(a) of the Exchange Act and Rule 17a-8 thereunder. 

 

Respondent and Relevant Entities  

 

4. OTC Link is a Delaware limited liability company with its principal place of 

business in New York, New York.  OTC Link is an indirect, wholly-owned subsidiary of OTC 

Markets Group, Inc.  It has been registered with the Commission as a broker-dealer since 2012.  

OTC Link’s sole line of business is its operation of three ATS platforms: OTC Link ATS, OTC 

Link ECN and OTC Link NQB.   

 

5. OTC Link ATS is an ATS operated by OTC Link for OTC securities.  In 2012, 

OTC Link ATS noticed its operations as an ATS by filing a Form ATS initial operation report with 

the Commission.  OTC Link ATS operates as a Qualified Interdealer Quotation System (“IDQS”).  

OTC Link ATS provides a fully attributable, network-based model for quoting and facilitating 

transactions in OTC securities that publishes broker-dealer quotations, delivers trade messages, and 

allows subscribers to execute or negotiate trades with known counterparties.  OTC Link ATS is not 

a national securities exchange or self-regulatory organization. 

 

6. OTC Link ECN is an ATS operated by OTC Link for OTC securities.  Launched 

in 2017, OTC Link ECN operates pursuant to a Form ATS on file with the Commission as an 

Electronic Communication Network and provides subscribers with anonymous order matching 

functionality.  OTC Link ECN is not a national securities exchange or self-regulatory organization.    

 

7. OTC Link NQB is an ATS operated by OTC Link for OTC securities.  Launched 

in 2021, OTC Link NQB operates pursuant to a Form ATS on file with the Commission as an 

IDQS with an order matching functionality.  OTC Link NQB is not a national securities exchange 

or self-regulatory organization.    

 

Background 

 

8. The BSA and implementing regulations promulgated by the U.S. Department of the 

Treasury’s Financial Crimes Enforcement Network (“FinCEN”) require broker-dealers such as 

OTC Link to file SARs with FinCEN to report, among other things, a transaction (or a pattern of 

transactions of which the transaction is a part) conducted or attempted by, at, or through the 

broker-dealer involving or aggregating funds or other assets of at least $5,000 that the broker-

dealer knows, suspects, or has reason to suspect: (1) involves funds derived from illegal activities 

or was intended or conducted to disguise or hide funds or assets derived from illegal activities; (2) 

is designed to evade any requirement of the BSA; (3) has no business or apparent lawful purpose 

or is not the sort in which the particular customer would normally be expected to engage and the 

broker-dealer knows of no reasonable explanation for the transaction after examining the available 

facts; or (4) involves the use of the broker-dealer to facilitate criminal activity.  See 31 C.F.R. § 

1023.320(a)(2) (the “SAR Rule”). 

 



 

 

4 

9. To be liable for failing to file a SAR, a broker-dealer must know, suspect, or have 

reason to suspect that a transaction falls into one of the four categories of suspicious activity in 31 

C.F.R. § 1023.320(a)(2).  The Financial Industry Regulatory Authority (“FINRA”) and FinCEN 

have longstanding regulatory guidance highlighting red flags related to penny stock transactions 

and FINRA has cautioned firms that its examples of red flags are “merely illustrative” and that 

other situations may arise that require further investigation.  See FinCEN’s The SAR Activity 

Review Trends Tips & Issues, Issue 15, “ln Focus: The Securities and Futures Industry;” FINRA’s 

Updated Small Firm Template Anti-Money Laundering (AML) Program (updated January 2010); 

FINRA Regulatory Notice 09-05 (Jan. 2009).  In May 2019, FINRA issued Regulatory Notice 19-

18, which included a list of previously identified red flags and provided additional examples of red 

flags potentially indicative of suspicious activity, including examples of manipulative trading of 

microcap and penny stock securities.  FINRA Regulatory Notice 19-18 (May 2019), at 3–11. 

 

10. The BSA and its implementing regulations require the filing of a SAR no later than 

30 calendar days after the date of the broker-dealer’s initial detection of facts that may constitute a 

basis for filing a SAR. If no suspect is identified on the date of such initial detection, a broker-

dealer may delay filing a SAR for an additional 30 calendar days to identify a suspect, but in no 

case shall reporting be delayed more than 60 calendar days after the date of such initial detection.  

31 CFR § 1023.320(b).   

 

11. Exchange Act Rule 17a-8 requires broker-dealers registered with the Commission 

to comply with the reporting, record-keeping, and record retention requirements of the BSA.  The 

failure to file a SAR, including continuing activity SARs, as required by the SAR Rule is a 

violation of Section 17(a) of the Exchange Act and Rule 17a-8 thereunder.  See SEC v. Alpine Sec. 

Corp., 308 F. Supp. 3d 775, 798–800 (S.D.N.Y. 2018), aff’d, 982 F.3d 68 (2d Cir. 2020), cert. 

denied, Alpine Sec. Corp. v. SEC, No. 19-3272, 595 U.S. ___ (2021).  

 

Facts 

 

12. OTC Link has operated OTC Link ATS since 2012, OTC Link ECN since 2017 

and OTC Link NQB since 2021, all of which are among the largest ATSs for trading OTC 

securities in the United States. As an operator of ATSs for OTC securities, OTC Link plays a 

significant role in executing trades of microcap and penny stock securities.  Microcap and penny 

stock securities tend to be high-risk securities because they typically have no minimum listing 

standards, lack liquidity, and have high volatility, and because there is often a lack of public 

information available about these securities.  OTC Link ECN and OTC Link NQB act as the 

executing party on an agency basis in relation to all transactions executed on these platforms, 

whereas OTC Link ATS facilitates transactions through, among other things, the publishing of 

quotes and delivery of trade-related messages. Despite tens of thousands of higher risk microcap 

and penny stock securities transactions conducted daily through the OTC Link ATS Platforms, 

during the Relevant Period, OTC Link failed to establish a reasonably designed AML surveillance 

program for its transactions, which resulted in its failure to file SARs during the Relevant Period in 

connection with numerous suspicious transactions.  

 



 

 

5 

13. During the Relevant Period, OTC Link’s AML department consisted of its Chief 

Compliance Officer, who was also designated as the Anti-Money Laundering Compliance Officer 

(the “AMLCO”), and a junior-level Compliance Associate.  OTC Link’s AML Policies specified 

that the AMLCO was responsible for, among other things, monitoring the firm’s compliance with 

its AML obligations and for filing SARs.  Between at least January 1, 2020 and June 30, 2021, the 

AMLCO allocated only approximately two hours per month to the oversight of OTC Link’s AML 

program. 

 

14. OTC Link’s AML Policies during the Relevant Period stated that “since the Firm 

does not handle customer orders, it focuses its oversight of red flags and suspicious activity efforts 

into the activity of the FINRA Member Broker Dealers arranging transactions through the Firm’s 

ATSs.”  Although OTC Link’s AML Policies specified certain “red flags” indicative of suspicious 

activity relating to potential microcap fraud, there was no reference to any red flags associated with 

other risks relevant to OTC Link’s business, including: (a) sell orders from subscribers 

representing a large volume of trading relative to the average daily trading volume in thinly-traded 

microcap issuers; (b) consistent one-sided trading by a subscriber in a particular thinly-traded 

microcap issuer accompanied by a significant increase in stock price; (c) trading activity by 

subscribers involving apparent pre-arranged securities trading, including wash or cross trades, in 

thinly-traded microcap securities; or (d) transactions involving subscribers who were publicly 

known to be the subject of criminal, civil or regulatory actions for crime, corruption, or misuse of 

public funds. Additionally, OTC Link’s AML Policies provided that “[s]ince the firm does not 

have customer information or insight into the client (or retail broker) entering orders the firm is 

somewhat limited in its ability to identify fraud.”   

 

15. During the Relevant Period, OTC Link failed to surveil the vast majority of 

transactions conducted through the OTC Link ATS Platforms for red flags of potentially suspicious 

conduct concerning, among other things, the following types of potentially unlawful, manipulative 

transactions (see FINRA Regulatory Notice 19-18 (May 2019), FINRA Regulatory Notice 09-05 

(Jan. 2009)):  

 

a. Trading activity involving a significant proportion of the daily trading volume in a thinly 

traded or low-priced security;  

 

b. Trading activity involving a sudden spike in investor demand for, coupled with a 

rising/decreasing price in, a thinly-traded or low-priced security;  

 

c. Trading activity involving pre-arranged or other non-competitive securities trading, 

including wash or cross trades, with no apparent business purpose (“pre-arranged or wash 

trading”); or 

 

d.  Transactions involving subscribers who were publicly known to be the subject of 

criminal, civil or regulatory actions for crime, corruption, or misuse of public funds. 

 



 

 

6 

16. In addition, although OTC Link used automated surveillance to identify other forms 

of potentially suspicious trading activity conducted through the OTC Link ATS Platforms, it did 

not allocate sufficient compliance and operations resources to review the vast majority of these 

alerts generated from its automated surveillance system.  

 

17. Specifically, OTC Link did not devote sufficient resources to review the alerts 

generated by its automated surveillance system.  For example, between January 1, 2020 and June 

30, 2021, OTC Link’s automated surveillance system generated 1,862 alerts averaging 310 alerts 

per month.  The AMLCO and Compliance Associate who were responsible for reviewing the 

trading alerts and devoted only approximately five hours per month towards this task, and none of 

these alerts resulted in further AML review or investigation by OTC Link.   

 

18. During the Relevant Period, OTC Link failed to investigate red flags or file any 

SARs in connection with numerous instances of suspicious manipulative trading activity conducted 

through the OTC Link ATS Platforms involving: (a) a large volume of thinly-traded, low-priced 

securities; (b) a sudden spike in investor demand for, coupled with a rising or decreasing price in, 

thinly-traded, low-priced securities; (c) suspicious manipulative, pre-arranged or wash trading 

activity; and/or (d) subscribers who were publicly known to be the subject of criminal, civil or 

regulatory actions for crime, corruption, or misuse of public funds.  

 

19. If OTC Link had in place reasonably designed AML Policies to surveil transactions 

conducted through its OTC Link ATS Platforms for red flags regarding potential suspicious trading 

activity during the Relevant Period, it would have identified the above-referenced suspicious 

transactions concerning potentially unlawful and manipulative trading (including possible 

spoofing, layering, wash trading, pre-arranged trading, and sudden spikes in volume coupled with 

significant volatility) that would have required the filing of numerous SARs. 

 

20. Further, after OTC Link told Enforcement staff that it had identified seven separate 

instances of suspicious activity that warranted the filing of SARs during the Relevant Period, it 

failed to file corresponding SARs in a timely manner due to an oversight by its operations staff.  In 

fact, OTC Link did not file SARs reflecting this suspicious activity until Enforcement staff 

inquired about their whereabouts.  These failures further demonstrate the lack of resources 

dedicated to ensuring an adequate AML surveillance program.  

 

21. As a result of OTC Link’s failure to have or implement reasonably designed AML 

Policies to surveil transactions conducted through the OTC Link ATS Platforms for possible red 

flags regarding suspicious activity, the firm failed to identify and investigate suspicious activity 

and ultimately failed to file a single SAR during the Relevant Period in connection with numerous 

transactions that it should have had reason to suspect involved possible fraudulent activity or had 

no business or apparent lawful purpose.   

 



 

 

7 

OTC Link’s Remedial Efforts 

 

22. In determining to accept the Offer, the Commission considered remedial acts 

undertaken by OTC Link and cooperation afforded the Commission staff. 

 

23. In response to comments that OTC Link received from the Commission’s Division 

of Examinations in March 2022, between May 2022 and May 2023, OTC Link expanded the alert 

criteria for its automated surveillance system by lowering sale volume thresholds for both 

subscribers with disciplinary history and for potential illegal unregistered distributions and has 

begun filing SARs relating to such activities. 

   

24. In October 2023, OTC Link retained a third-party compliance consultant 

(“Compliance Consultant”) to conduct a review of its compliance program and make 

recommendations to improve its AML Policies. 

   

25. In October 2023, OTC Link added two additional members to its AML compliance 

team to assist with its AML surveillance efforts.   

 

Undertakings 

 

 Respondent has undertaken to: 

 

26. Continue its retention of the Compliance Consultant to conduct a comprehensive 

review of OTC Link’s AML Policies relating to the monitoring and reporting of suspicious 

transactions across the three OTC Link ATS Platforms.  OTC Link shall exclusively bear all costs, 

including compensation and expenses, associated with the retention of the Compliance Consultant. 

 

27. OTC Link shall cooperate fully with the Compliance Consultant and shall provide 

the Compliance Consultant with access to such of its files, books, records, and personnel as are 

reasonably requested by the Compliance Consultant for review. 

 

28. OTC Link shall require the Compliance Consultant to submit to the Commission’s 

staff a certification stating whether OTC Link cooperated with the Compliance Consultant with 

every report submitted.  The certification and supporting material shall be submitted along with 

each required report to Sandeep Satwalekar, Assistant Regional Director, Division of Enforcement, 

Securities and Exchange Commission, 100 Pearl St., Suite 20-100, New York, NY 10004-2616. 

 

29. OTC Link shall require the Compliance Consultant to conduct, at the end of the 

second and fourth quarters after the date of the entry of this Order, comprehensive reviews of 

the effectiveness and implementation of OTC Link’s AML Policies (each, an “Interim 

Review”).  OTC Link shall require the Compliance Consultant to provide OTC Link with any 

recommendations for changes or improvements to the effectiveness and implementation of its 

AML Policies as the Compliance Consultant deems appropriate during any Interim Review and 

prior to the issuance of reports required in paragraphs 30, 31, and 34, below. 



 

 

8 

 

30. OTC Link shall require, within thirty (30) days from the completion of the first 

Interim Review, the Compliance Consultant to submit a written and detailed report to OTC Link 

and the Commission staff (the “Semi-Annual Report”).  The Semi-Annual Report will describe 

the first Interim Review, the names of the individuals who performed the Interim Review, the 

conclusions reached, any recommendations by the Compliance Consultant for changes in or 

improvements to OTC Link’s AML Policies and/or OTC Link’s implementation thereof, and 

the status of OTC Link’s adoption of such recommendations by the Compliance Consultant or 

failure to cooperate with reasonable requests to access its files, books, records, or personnel.  

 

31. OTC Link shall require, within thirty (30) days from the completion of the second 

Interim Review, the Compliance Consultant to submit a written and detailed report to OTC Link 

and the Commission staff (the “Anniversary Report”).  The Anniversary Report will describe the 

second Interim Review, the names of the individuals who performed the Interim Review, the 

conclusions reached, any recommendations by the Compliance Consultant for changes in or 

improvements to OTC Link’s AML Policies  and/or OTC Link’s implementation thereof, and the 

status of OTC Link’s adoption of such recommendations by the Compliance Consultant or failure 

to cooperate with reasonable requests to access its files, books, records, or personnel.  

 

32. OTC Link shall adopt all recommendations contained in the Semi-Annual Report 

and the Anniversary Report within forty-five (45) days of the date of each report; provided, 

however, that within thirty (30) days after the date of each report, OTC Link shall in writing 

advise the Compliance Consultant and the Commission staff of any recommendations that OTC 

Link considers to be unduly burdensome, impractical, or inappropriate.  With respect to any 

recommendation that OTC Link considers to be unduly burdensome, impractical, or 

inappropriate, OTC Link need not adopt that recommendation at that time but shall propose in 

writing an alternative policy, procedure, or system designed to achieve the same objective or 

purpose. 

 

33. As to any recommendation on which OTC Link and the Compliance Consultant do 

not agree, OTC Link shall attempt in good faith to reach an agreement with the Compliance 

Consultant on an alternative proposal within sixty (60) days after the date of the Semi-Annual 

Report or Anniversary Report, as applicable.  Within fifteen (15) days after the conclusion of the 

discussion and evaluation by OTC Link and the Compliance Consultant, OTC Link shall require 

that the Compliance Consultant inform OTC Link and the Commission staff in writing of the 

Compliance Consultant’s final determination concerning any recommendation objected to by OTC 

Link.  OTC Link shall abide by the determinations of the Compliance Consultant and, within thirty 

(30) days after final agreement between OTC Link and the Compliance Consultant or final 

determination of the Compliance Consultant, whichever occurs first, OTC Link shall adopt and 

implement all of the recommendations that the Compliance Consultant deems appropriate. 

 

34. Within thirty (30) days of OTC Link’s adoption of all of the recommendations in 

the Anniversary Report that the Compliance Consultant deems appropriate, OTC Link shall require 

the Compliance Consultant to submit a written final report to OTC Link and the Commission staff 



 

 

9 

(the “Final Report”).  The Final Report will (1) describe how OTC Link has adopted and 

implemented the Compliance Consultant’s recommendations, if any, from the Semi-Annual Report 

and Anniversary Report; (2) certify that the Compliance Consultant agrees with OTC Link’s 

adoption and implementation of its recommendations, if any; and (3) include an opinion of the 

Compliance Consultant on whether the AML Policies, and OTC Link’s implementation thereof, 

are reasonably designed to prevent violations of the federal securities laws by OTC Link and its 

employees. 

 

35. For the remainder of the engagement, OTC Link: (1) shall not have the authority to 

terminate the Compliance Consultant or substitute another compliance consultant for the 

Compliance Consultant without the prior written approval of the Commission staff; and (2) shall 

compensate the Compliance Consultant and persons engaged to assist the Compliance Consultant 

for services rendered pursuant to this Order at their reasonable and customary rates.   

 

36. OTC Link shall not enter into any employment, consultant, attorney-client, auditing 

or other professional relationship with Compliance Consultant, or any of its present or former 

affiliates, directors, officers, employees, or agents acting in these capacities, for a period of two 

years from completion of the engagement.   

 

37. The Semi-Annual Report, Anniversary Report and Final Report will likely include 

confidential financial, proprietary, competitive business or commercial information.  Public 

disclosure of a report could discourage cooperation, impede pending or potential government 

investigations or undermine the objectives of the reporting requirement.  For these reasons, among 

others, reports and the contents thereof are intended to remain and shall remain non-public, except 

(1) pursuant to court order, (2) as agreed to by the parties in writing, (3) to the extent that the 

Commission determines in its sole discretion that disclosure would be in furtherance of the 

Commission’s discharge of its duties and responsibilities, or (4) as otherwise required by law. 

 

38. Certification.  OTC Link undertakes to certify, in writing, compliance with the 

undertakings set forth above.  The certification shall identify the undertakings, provide written 

evidence of compliance in the form of a narrative, and be supported by exhibits sufficient to 

demonstrate compliance.  The Commission staff may make reasonable requests for further 

evidence of compliance, and Respondent agrees to provide such evidence.  The certification and 

supporting material shall be submitted to Sandeep Satwalekar, Assistant Regional Director, 

Division of Enforcement, Securities and Exchange Commission, 100 Pearl St., Suite 20-100, New 

York, NY 10004-2616, with a copy to the Office of Chief Counsel of the Enforcement Division, 

no later than sixty (60) days from the date of the completion of the undertakings.  

 

39. Recordkeeping.  OTC Link shall preserve for a period of not less than six (6) years 

from the end of the fiscal year last used, the first two years in an easily accessible place, any record 

of its compliance with the undertakings set forth herein.  

 

40. Deadlines.  For good cause shown, the Commission staff may extend any of the 

procedural dates relating to the undertakings.  Deadlines for procedural dates shall be counted in 



 

 

10 

calendar days, except that if the last day falls on a weekend or federal holiday, the next business 

day shall be considered the last day. 

 

Violations 

 

41. As a result of the conduct described above, OTC Link willfully3 violated Section 

17(a) of the Exchange Act and Rule 17a-8 thereunder, which require broker-dealers to comply with 

the reporting, record keeping, and record retention requirements of the BSA, including filing SARs 

as required by the SAR Rule, 31 C.F.R. § 1023.320. 

 

IV. 

 

 In view of the foregoing, the Commission deems it appropriate and in the public interest to 

impose the sanctions agreed to in Respondent OTC Link’s Offer. 

 

 Accordingly, pursuant to Sections 15(b) and 21C of the Exchange Act, it is hereby 

ORDERED that: 

 

A. Respondent OTC Link cease and desist from committing or causing any violations 

and any future violations of Section 17(a) of the Exchange Act and Rule 17a-8 promulgated 

thereunder. 

 

B. Respondent OTC Link is censured.   

 

C. Respondent OTC Link shall, within 30 days of the entry of this Order, pay a civil 

money penalty in the amount of $1,190,000.00 to the Securities and Exchange Commission for 

transfer to the general fund of the United States Treasury, subject to Exchange Act Section 

21F(g)(3).  If timely payment is not made, additional interest shall accrue pursuant to 31 U.S.C. 

§3717. 

 

Payment must be made in one of the following ways:   

 

 
3 “Willfully,” for purposes of imposing relief under Section 15(b) of the Exchange Act, “‘means 

no more than that the person charged with the duty knows what he is doing.’”  Wonsover v. SEC, 

205 F.3d 408, 414 (D.C. Cir. 2000) (quoting Hughes v. SEC, 174 F.2d 969, 977 (D.C. Cir. 

1949)).  There is no requirement that the actor “also be aware that he is violating one of the 

Rules or Acts.”  Tager v. SEC, 344 F.2d 5, 8 (2d Cir. 1965).  The decision in The Robare Group, 

Ltd. v. SEC, which construed the term “willfully” for purposes of a differently structured 

statutory provision, does not alter that standard.  922 F.3d 468, 478-79 (D.C. Cir. 2019) (setting 

forth the showing required to establish that a person has “willfully omit[ted]” material 

information from a required disclosure in violation of Section 207 of the Advisers Act). 

 



 

 

11 

(1) Respondent may transmit payment electronically to the Commission, which 

will provide detailed ACH transfer/Fedwire instructions upon request;  

 

(2) Respondent may make direct payment from a bank account via Pay.gov 

through the SEC website at http://www.sec.gov/about/offices/ofm.htm; or  

 

(3) Respondent may pay by certified check, bank cashier’s check, or United 

States postal money order, made payable to the Securities and Exchange 

Commission and hand-delivered or mailed to:  

 

Enterprise Services Center 

Accounts Receivable Branch 

HQ Bldg., Room 181, AMZ-341 

6500 South MacArthur Boulevard 

Oklahoma City, OK 73169 

 

Payments by check or money order must be accompanied by a cover letter identifying OTC 

Link as a Respondent in these proceedings, and the file number of these proceedings; a copy of the 

cover letter and check or money order must be sent to Sandeep Satwalekar, Assistant Regional 

Director, Division of Enforcement, Securities and Exchange Commission, 100 Pearl St., Suite 20-

100, New York, NY 10004-2616. 

 

http://www.sec.gov/about/offices/ofm.htm


 

 

12 

D. Amounts ordered to be paid as civil money penalties pursuant to this Order shall be 

treated as penalties paid to the government for all purposes, including all tax purposes.  To 

preserve the deterrent effect of the civil penalty, Respondent agrees that in any Related Investor 

Action, it shall not argue that it is entitled to, nor shall it benefit by, offset or reduction of any 

award of compensatory damages by the amount of any part of Respondent’s payment of a civil 

penalty in this action (“Penalty Offset”).  If the court in any Related Investor Action grants such a 

Penalty Offset, Respondent agrees that it shall, within 30 days after entry of a final order granting 

the Penalty Offset, notify the Commission’s counsel in this action and pay the amount of the 

Penalty Offset to the Securities and Exchange Commission.  Such a payment shall not be deemed 

an additional civil penalty and shall not be deemed to change the amount of the civil penalty 

imposed in this proceeding.  For purposes of this paragraph, a “Related Investor Action” means a 

private damages action brought against Respondent by or on behalf of one or more investors based 

on substantially the same facts as alleged in the Order instituted by the Commission in this 

proceeding. 

 

E. Respondent shall comply with the undertakings enumerated in paragraphs 26 

through 40 above. 

 

 By the Commission. 

 

 

 

Vanessa A. Countryman 

        Secretary