[ by Howard Haykin ]

FINRA announced Tuesday that it has expelled Biremis Corp. - fka "Swift Trade Securities USA, Inc.," - and barred its President and CEO for supervisory violations related to detecting and preventing manipulative trading activities such as "layering," short sale violations, failure to implement an adequate anti-money laundering program, and financial, operational and numerous other securities law violations.

Background of Respondents. Biremis, Corp. has been a FINRA member since mid-2004, and during all relevant times herein, Biremis was a wholly-owned subsidiary of BRMS Holdings, Inc. ("BRMS Holdings").  Peter Beck was the President and sole director of BRMS Holdings, and its controlling shareholder.  He owned 70.5% of BRMS Holdings.  Another individual owned 25%, and the remaining 4.5% was held by Midimax S.A. ("Midimax"), a Uruguayan entity - that was wholly-owned by Beck.

Biremis' sole business was providing trade execution services via a proprietary day trading platform and order management system to day traders located throughout the world.   From September 2007 until it ceased its operations on or about 7/14/11, Biremis received its order flow exclusively from two customers - Opal Stone Financial Services S.A. ("Opal Stone") and Swift Trade Inc. ("Swift Trade") - both of which are non-FINRA  member entities located outside the United States.

FINRA EVP and Head of Market Reg., Tom Gira, said... "In creating a business that allowed a significant volume of overseas day trading to pass through its systems on a regular basis, Biremis and Mr. Beck needed to devote the appropriate level of resources and personnel to ensure that this business was properly supervised, yet failed on both accounts.  Biremis' inadequate supervisory system resulted in the firm violating multiple rules designed to protect the integrity of the markets and to ensure that member firms adhere to the high standards required of the brokerage industry."

FINRA Findings and Allegations. FINRA found that during various periods from June 2007 to June 2010, Biremis and Mr. Beck allegedly failed to establish a supervisory system reasonably designed to achieve compliance with the applicable laws and regulations prohibiting manipulative trading activity.  Among other things, Biremis' supervisory system failed to include policies and procedures designed to detect and prevent layering on U.S. markets.  Layering involves the placement of non-bona-fide orders on one side of the market in order to cause market movement that will result in the execution of an order entered on the opposite side of the market, after which the non-bona-fide orders are then canceled.

Biremis also allegedly failed to establish policies and procedures reasonably designed to detect and prevent manipulative activity designed to affect the closing price of a security. As a result, Biremis failed to detect and prevent potential layering activity and potential manipulation of the closing price of equity securities on U.S. markets. FINRA found that despite the fact Biremis' only business was to execute transactions on behalf of day traders around the world, Biremis and Mr. Beck allegedly failed to implement an adequate anti-money laundering (AML) program to comply with the Bank Secrecy Act.  Among the violations related to its AML program, Biremis failed to properly detect suspicious activities and file suspicious activity reports (SARs) when appropriate.  Also, Mr. Beck appointed an unqualified and untrained individual to supervise Biremis' AML compliance program and Biremis failed to provide adequate AML training to employees. Biremis and Mr. Beck also are alleged to have violated a number of additional securities laws and rules.  Biremis failed to maintain a margin system and margin accounts, and did not have policies and procedures in place related to the use of margin.  The firm also failed to prepare customer reserve computations and failed to maintain a special reserve bank account for the exclusive benefit of customers. In addition, Biremis placed thousands of short sale orders, which was in violation of an emergency order issued by the SEC that temporarily banned short selling in certain securities.  Also, between at least April 2008 and May 2009, Biremis improperly calculated its net capital, operating in net capital deficiency by up to $25 million.  Additionally, the firm failed to maintain all required emails and instant messages over a five-year period. FINRA Staff Credits. Investigation by Market Reg and Enforcement - Seth Levy and Mark Dorsey; and Conway Lee, Jessica Dennehy. For further details, go to:  [FINRA News Release, 7/31/12] and [FINRA AWC NO. 2010021162202].