According to the SEC's order, from at least October 2008 to March 2010, the Chicago-based firm repeatedly engaging in a series of sham "reset" transactions designed to give the illusion that it was complying with short selling rules.

As well as Feldman and the company itself, former CFO Thomas Stern and customer Jonathan Feldman have been charged by the SEC over the scheme.

Head of trading and customer service Peter Bottini and compliance officers Phillip Hoeh and Kevin Strine were named in a separate administrative proceeding and settled the charges against them for their roles.

Robert Khuzami, director, division of enforcement, SEC, says: "Feldman and optionsXpress used sham reset transactions to avoid, sometimes for months, compliance with Reg. SHO's stock delivery requirements. In effect, they 'kited' shares of stock, thus depriving buyers of the benefit of their bargain - prompt delivery of their shares."

OptionsXpress was acquired by Charles Schwab for around $1 billion in stock late last year.