At the end of the trading day, Heynen entered fictitious sell transactions for the total amount of her long positions. The next morning her back office realized that the transactions did not match those reported with the Street and, in response, Heynen cancelled the transactions.
Heynen entered the fictitious sell transactions into her member firm’s Phase 3 order entry system, which is a back-office service provider and allows users to book transactions into the firm’s books and records without actually executing the claimed transactions. Heynen entered the fictitious sell transactions and maintained long positions to circumvent the firm’s trading account limits per security and total trading limit for her proprietary trading account.
As a result of entering the fictitious sell transactions, Heynen concealed a $76,810 unrealized trading loss from her firm. Heynen caused her firm’s books and records to reflect false and misleading information regarding securities transactions in her account and, by entering the fictitious sell transactions at prices that concealed her unrealized trading losses, she engaged in unethical business conduct.