BD Fined $2 Million for Trade Reporting Violations
FINRA fined a large broker-dealer $2 Million for trade reporting violations. FINRA cited the BD for a large number of erroneously reported non-bona fide transactions at the opening of a triple witching trading session, significant OATS and TRACE reporting omissions, and failures to monitor operational controls for its trading systems.
OUR TAKE: FINRA has been stepping up its emphasis on price reporting systems to enhance transparency. This large fine signals FINRA’s seriousness.
Citigroup’s $2 million fine is modest, I believe, for the massive systemic failure of their reporting systems. Either the firm ignored the problems, or their internal systems were not properly set up to monitor trade reporting. In either case, the fine translates into 30 cents per trade violation. Pretty cheap, if you consider in some cases, small firms were fines $3,000 per TRACE trade violation.