UNITED STATES SECURITIES AND EXCHANGE COMMISSION

SEC ADMIN RELEASE 33-9271, 34-65609, OCTOBER 24, 2011: THE SECURITIES AND EXCHANGE COMMISSION (COMMISSION) DEEMED IT APPROPRIATE AND IN THE PUBLIC INTEREST THAT PUBLIC ADMINISTRATIVE AND CEASE-AND-DESIST PROCEEDING BE, AND HEREBY ARE, INSTITUTED PURSUANT TO SECTION 8A OF THE SECURITIES ACT OF 1933 (SECURITIES ACT) AND SECTIONS 15(B) AND 21C OF THE SECURITIES EXCHANGE ACT OF 1934 (EXCHANGE ACT) AGAINST BERKELEY (RESPONDENT). THE FIRM OPERATED AN ALTERNATIVE TRADING SYSTEM ("ATS"), A PRIVATE STOCK-TRADING PLATFORM COMMONLY REFERRED TO AS A "DARK POOL." THE FIRM HELD OUT ITS ATS AS A "CROSSING NETWORK" THAT ANONYMOUSLY MATCHED CUSTOMERS' INTERESTS IN TRADING LARGE AMOUNTS OF STOCK. HOWEVER, THE FIRM DID NOT DISCLOSE TO ITS CUSTOMERS THAT THE OVERWHELMING MAJORITY OF THE SHARES TRADED ON ITS ATS WERE BOUGHT OR SOLD BY A WHOLLY OWNED SUBSIDIARY OF THE FIRM. THE UNDISCLOSED SUBSIDIARY (THE "AFFILIATE") WAS ENTIRELY OWNED AND FUNDED BY THE FIRM, WHICH CREATED THE AFFILIATE TO PROVIDE LIQUIDITY TO THE FIRM'S CUSTOMERS. THE FIRM ADVERTISED THAT IT HAD NO PROPRIETARY TRADING DESK GAMING [CUSTOMER] ORDERS. ITS ADVERTISING AND OTHER PUBLIC STATEMENTS REPEATEDLY CLAIMED THAT THE TRADING OPPORTUNITIES ON THE ATS WERE "NATURAL," THAT THE ATS WOULD NOT REVEAL THE SIDE OR PRICE OF A CUSTOMER ORDER BEFORE A TRADE WAS COMPLETED, THAT THE ATS DENIED "ARBITRAGEURS" AND "HIGH-FREQUENCY TRADERS" INFORMATION NEEDED TO "FRONT RUN," THAT IT PROVIDED A REFUGE FROM "PREDATORS," AND THAT IT PREVENTED "PRE-TRADE INFORMATION LEAKAGE." THESE CLAIMS WERE FALSE AND MISLEADING IN THAT THE AFFILIATE WAS ON THE OTHER SIDE OF THE VAST MAJORITY OF TRADES EXECUTED ON THE ATS. THE AFFILIATE SOUGHT TO PREDICT THE SIDE AND PRICE OF FIRM CUSTOMERS' ORDERS AND THEN TRADE ON THE SAME SIDE AS THOSE ORDERS IN OTHER TRADING VENUES BEFORE FILLING THEM ON THE ATS. WHILE THE FIRM ON THE ADVICE OF ITS COUNSEL DISCLOSED TO MOST OF ITS CUSTOMERS THE POSSIBILITY OF UNSPECIFIED FIRM AFFILIATES TRADING ON THE FIRM ATS, IT ASSURED ITS CUSTOMERS THAT ANY AFFILIATE TRADING ON THE ATS WOULD RECEIVE NO PREFERENTIAL TREATMENT AND WOULD HAVE NO ACCESS TO ORDER OR TRADE DATA OF OTHER SUBSCRIBERS. IN FACT, THE FIRM OCCASIONALLY REVEALED TO THE AFFILIATE, AFTER THE TRADES WERE CONSUMMATED, ORDER AND TRADE DATA OF OTHER CUSTOMERS. THE FIRM ALSO PROVIDED THE AFFILIATE WITH CERTAIN ACCESS AND INFORMATION THAT IMPROVED THE AFFILIATE'S ABILITY TO TRADE ADVANTAGEOUSLY, INCLUDING CERTAIN ELECTRONIC CONNECTIVITY TO THE ATS, INPUT INTO DESIGNING ATS RULES FOR DETERRING PREDATORY CONDUCT, AND INFORMATION ABOUT ATS OPERATIONS AND PIPELINE'S METHODS OF POLICING FOR PREDATORY BEHAVIOR THAT WERE NOT KNOWN TO OTHER CUSTOMERS. FROM AUGUST 2004 TO MARCH 2010, THE FIRM VIOLATED THE COMMISSION'S REGULATION ATS BY OMITTING TO DISCLOSE, IN REQUIRED FILINGS WITH THE COMMISSION, THE AFFILIATE AS AN ENTITY INVOLVED IN THE OPERATION OF THE ALTERNATIVE TRADING SYSTEM.

Order

Cease and Desist

Civil and Administrative Penalty(ies)/Fine(s)

$100,000.00